Minority business enterprises are the businesses where at least 51 per cent of the business is managed and controlled by a minority group daily. Here, a minority is implied to the people who have a different race, different culture or different religion to that of most people in that country.
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Minority business enterprise are those businesses where at least 51 per cent of the organization is managed and controlled by a minority group on a daily basis where in the minority groups are the ones who have different race, culture and religion and/or religion (for example women owned) to most of the people in the country. Minority Business Enterprise can be abbreviated as MBE.
It is a United States based designation that is given to all those businesses. It promotes the ethnicity, culture, religions, races and genders. It is mostly seen in the United States with their diverse population in the sector having,
- African American
- Asian American or Pacific Islander (includes West Asian Americans (Iran, etc.) and East Asian Americans (Japan, Korea, etc.))
- Hispanic American (A U.S. citizen of true born Hispanic heritage)
- Native American, including Aleuts
Although these businesses are self-identified, they need a certification to be official. This certification is provided by the National Minority Supplier Development Council (NMSDC) and given through city, state or federal agency.
Benefits of Minority Business Enterprise Certification
To welcome different races, cultures and religions with open arms and promote them, Minority Business Enterprise Certification acts as an advantage to give them access to various perks. Some of them are,
- Increased business partnership opportunities: US government and other corporations often keep a budget percentage for the minority owned businesses in order to support them and establish a partnership.
- Networking: The MBEs can build a network with greater businesses through the access they are granted with leading to business opportunity exchange, MBDA’s contract opportunities for Minority Business owners, contact with top CEOs of public and private companies.
- Training workshops, management and technical guidance: The NMSDC hosts various events for the Minority Business owners such as workshops, mentorship programs, management events for guiding the owners to keep their company sound in the market.
- Access to client databases: Being a certified Minority Business Enterprise, the organization will have access to a large database ranging from the potential customer that may benefit the business on a large scale to the diverse suppliers of the market.
Challenges of a Minority Business Enterprise
Although, Minority Owned Businesses are the fastest growing sector in the United States as of now but still it faces a lot of resentment in the industry.
- MBEs are undervalued: Minority Business Enterprises are often undervalued just because they are not as valuable as the other white-owned valuable counterparts. They are not visible to the world at a higher level and thus other big companies repress their presence out there.
- Lack of awareness and education: The Minority Business Enterprises are not considered legitimate because the owners of such organizations lack either awareness or education or access to capital. These situations lead to this state of MBEs today.
- Discrimination: MBEs often faces a lot of racism and discrimination with respect to the differences in their culture, heritage, race, religion, gender from that to most of the people. This leads to lowering their morale and discouraging them from moving forward.
- Lack of market recognition: These businesses suffer hard times to stand the recognition in the market that is already with other big companies. They face this issue very often since the market is already full of the big champs.
- Lack of resources: Although there are policies that support Minority Business Enterprise, the resources available are not enough to support them throughout. They might face issues like funding, marketing, visibility, etc. to be present in the industry.
The perks associated with Minority Business Enterprises look very lucrative at times, but they face a huge tornado in situations like that happened at the time of pandemic. They have zero support from any source in like situations.
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Frequently Asked Questions (FAQs)
1. How to get certified as a Minority Business Enterprise?
In order to get certified as a Minority Business Enterprise, the business/company needs to be owned, managed and controlled for at least 51 per cent by a minority group on a daily basis. Here, minority is termed for the group of people that has different culture, race, religion and/or gender, especially for women. A business will be considered for certification according to the guidelines by National Minority Supplier Development Council (NMSDC), through which the certificate is granted to the organizations.
2. How to apply for an MBE certificate?
To apply for a Minority owned business, there is a series of steps that are to be followed necessarily by the owner who wants to apply for the certificate. These steps are,
- Visit www.nmsdc.org/certifications
- The first and foremost step is to review the certification criteria and check which category of minority suits best and align with the interest of your business.
- Select the link on the page to fill up the questionnaire about the business to verify if it meets the certification guidelines.
- If the business is pre-qualified only then you will get access to the certification application system where you can preview and print the certification questions and documentation required.
- Gather the required documents.
- Complete the application online and upload all the necessary documents.
- The fee is paid online via credit card on the website itself.
- Once the application is complete the certification team will audit the application to check the accuracy and completeness.
- You can always check the progress of the application through the “application status” tab.