Ins and Outs of the Minority Businesses Enterprise Certification

This article originally appeared on FreshWater Cleveland (freshwatercleveland.com) on November 15, 2022, and is written by Raland Hatchett of RH Professional Services. Since originally written for a Cleveland-area audience, we have removed Cleveland-specific mentions from the article to reduce confusion. The full original article can be viewed here: https://www.freshwatercleveland.com/features/MBECertification111522.aspx

Obtaining city, state, or federal minority business certification isn’t easy, but it can unlock some profitable business opportunities. To obtain the certification, the new or existing owner has to be patient, organized, and willing to fill out loads of complicated forms to document their status.

However, gaining minority business certification can also be lucrative. It gives these business owners great rewards—including access to corporate buyers looking for minority-owned businesses, networking events, and posting on a special database open only to minority-certified businesses.

Here is how to overcome the hurdles to becoming a Minority Business Enterprise.

What is a Minority Business Enterprise certification?

A Minority Business Enterprise certification (MBE) is a certification for businesses owned and operated by a U.S. citizen whose ethnicity is African American, Hispanic American, AsianIndian, Asian Pacific, or Native American. The owner must have 51% ownership and control of the business and be in business for at least one year.

What is the origin of the MBE?

The Minority Business Enterprise program and the designated certification dates back to 1969 with the establishment of the Office of Minority Business Enterprise—today the Minority Business Development Agency—a federal agency exclusively dedicated to minority business enterprises. In 1973, the Office of Minority Business Enterprise established a national business service network and provided seed funding to numerous minority advocacy organizations.

These organizations included the National Minority Purchasing Council (now known as the National Minority Supplier Development Council), the Hispanic Chamber of Commerce, the National Economic Development Association (NEDA), the Chicago Economic Corporation, and the National Council of LaRaza.

The State of Ohio’s mandate in 1980 to work with minorityowned businesses was established through advocacy and legislative efforts.

Why should a minority business owner obtain an MBE certification?

One important point to stress is for business owners to think first about who would want to buy their product. Once you’ve decided who your ideal customer is, then apply for the minority business enterprise certification from the State of Ohio or the National Minority Supplier Development Council, a national organization that offers access to corporate purchasing agents and supply chains.

A certification (MBE, Woman Business Enterprise (WBE), or other) is not required to operate your business, but it helps by providing businesses with a chance to access new resources and opportunities that are profitable.

What are the benefits of MBE Certification?

Certification gives MBEs exclusive access to top corporate purchasing agents, premium networking events, searchable supplier databases, affordable consulting services, technology programs, and vital introductions to nationally known corporations.

Some examples of the benefits include:

Contract assistance—Work one-on-one with a business advisor to search for contract opportunities for your business.

Receive invitations or notifications about purchasing opportunities. For instance, the state of Ohio has a program because of a mandate that the agency spends 15% of its spending budget on minority firms certified by the State of Ohio.

Each MBE company’s certified profile is listed in a directory used by purchasing agents searching for goods or services provided by minority-owned businesses.

Financial and bonding assistance—Work one-onone with a business advisor to prepare a business plan and submit a request for a loan from a bank or request bonding from an insurance company. Management and technical assistance—Work with a business advisor to create a marketing and sales plan to grow the business or attend workshops learning how to train your current workforce on best practices used for great customer service.

What are the requirements to apply for an MBE?

The State of Ohio offers four types of certification. Each certification requires the completion of the application process. Certification as an MBE, WBE, Encouraging Diversity Growth and Equity Program (EDGE), and Veteran-Friendly Business Enterprise Procurement Program (VBE) requires the completion of a certification application and the submission of required documents.

The documents needed are:

Birth Certificate or passport

Last tax year State of Ohio tax return

Bank signature card or letter showing who has signature authority for the company’s bank account

Personal tax return for the past three years for the majority owner

W-2s and/or 1099 for majority owner and spouse

Business taxes S form

IRS Scheduled K-1 or schedule C for the past three years

Most recent balance sheet, cash flow statement, profit, and loss statement

Facility lease and ownership documentation

Loans and security agreement

Equipment list

List of subcontractors or suppliers used

Two of your largest signed contracts

Application Process

Many business owners report that the application process is not intuitive, so I recommend you dedicate at least a few hours to completing the process.

It is important that you've prepared and collected all documents on the checklist before you begin the application. The Unified Application for the State of Ohio MBE certification is designed to collect information in the following categories:

Company Information-address, email, and business phone number.

Employee Information-the number of full-time or part-time, minority or female employees.

Business Information-date business began operations.

Owner Information-standard personal information, % of ownership, etc.

Owner’s information on assets & liabilities, cash, IRA or retirement, personal property, real estate, auto/other assets. If there are several owners, each must complete this section.

Property Details-type of property, date of purchase, cost, market value. Board of Directors- list of board members.

Independent decision-making functions-list of those who make company decisions.

Company Officer Information- names of corporate officers.

Business Gross Receipts- revenue earned in previous years of operating the business.

Contribution/Assets Details—an investment made to start a business like cash and/or equipment.

Business Information questionnaire.

Personal eligibility statement.

Name of the person completing the application.

As you go through each section on your computer, please understand that the system will not move forward to the next section until all required information has been completed. If you run into any issues with the application system, first save what you’ve entered into the system and then request to speak with someone from support.

Follow up

Once your application is submitted and under review by the certification team at the agency granting certification, the process could potentially take up to 90 days. Be prepared to talk to the agency if questions arise about your application.

Certification processes

The Minority Business Development Division and Minority Business Assistance Centers can help businesses become state-certified in four different programs.

Recertification is for businesses whose certificates have expired after one year. Cross certification is for firms certified with one State agency that is recognized by another State agency or Joint Ventures.

In addition to the technical assistance, the federal, state, and local government, and corporations (not-for-profit and for-profit) have created programs specially designed to help develop minority-owned businesses to level the playing field and help these businesses grow.

An MBE application process is complex and labor intensive, but qualifying for the certification opens the door to corporate buyers, networking events, and a special database. That access can help these businesses expand and grow.

So don’t be discouraged by the process. For many companies aiming to be bigger and better, it is well worth it.

Simple Social Media Tips to Begin 2023

Honest talk: It’s the first half of January as I work on this article. My dry-erase calendar still says ‘December’. My day-at-a-time calendar is buried and probably stuck in November. I’m planning events in March and April and I’ve relied a little too much on my phone telling me what day it is lately.

All that is to say… a lot of us are probably still figuring out our 2023 time management even as you read this in February. If I dropped some time-consuming social media tips on you right now, I’d even laugh at myself. Instead, here are some basics to tidy up your pages in the new year that you can probably accomplish while waiting for your coffee to brew or during a commercial break (though as someone in marketing I should probably encourage you to watch those commercials…).

Your Contact Information

New shop phone number? Email address change? Or, here’s a biggie—do you have a new address? Pull up your social media pages and make these quick changes so everyone can find you. On a roll with the updates? Don’t forget your Google page, and I love a good up-to-date GCACC Member Directory page (no, seriously, those are so helpful to me and lots of others!)

Hours of Operation

If you’ve looked up a business’s hours online, only to discover it was incorrect, then you get this one. Some are very on top of this element of their social pages or even their Google page, but if it’s been a while or you forgot to change from summer to winter hours, here’s your friendly reminder to take care of that.

Visuals

Ok depending on your collection of photos, this could take longer than waiting for coffee. Freshen up Facebook with a new cover photo, and at the very least consider if your current account/profile images are the best representations of your business. Still using the old logo? Time to change!

One last way to make your business voice heard in 2023 and it doesn’t involve your social pages. We’d love to include you in a 2023 issue of Chamber Business Connection. We’d love expert columns sharing first-hand knowledge of your field, we’d love to chat about your business owner journey, and we’d love to learn about your business and its beginnings. Drop me an email at: shann@katbroconsulting.com