As a minority who owns a business, you may have heard that you will have advantages if you become a certified minority-owned business.
There are some requirements that need to be met, but there can be some pretty big reasons to get certified!
At CSI Accounting & Payroll, we’ve worked with small business operations for nearly 60 years. That means we’ve heard plenty of questions about minority-owned businesses, including:
- What constitutes a minority-owned business? What qualifications do I need to have?
- What advantages are there? Tax benefits, funding, government programs?
- How do I apply for minority-owned business certification?
What Qualifies as a Minority-Owned Business
If you’re a minority and own a business, is that enough to be a minority-owned business? Somewhat – but there are specific requirements.
“Minority-owned small business” is a federal government designation, and you’re eligible if:
- You are a member of a recognized minority group. (e.g., African American, Hispanic, Native American, Asian American, etc.). Women are no longer considered a recognized minority group, but there are other advantages to becoming a certified woman-owned business!
- You are a United States citizen.
- Your business is for-profit.
- You have at least 51 percent ownership of the business.
- You are involved in the business on an owner level.
- You meet the SBA’s size standards for being a small business.
You may have set up your business with a minority owner because you know there are benefits – but what are they? Let’s talk about them!
Benefits for Minority-Owned Businesses
Most people want to know about financial benefits, like tax credits – so we’ll start by pointing out that there are no tax benefits for minority-owned businesses, even if you get certified.
The only benefit you can claim without needing a certification is to position yourself as a minority-owned business. This may personally incentivize people to work with you.
However, there are still some advantages to getting that certification:
- More opportunities for government contracts
- More opportunities to work with businesses
- More grant opportunities
Government Contracts
The federal government sets aside contracts specifically for minority-owned businesses to promote diversity and inclusion in government procurement.
Certified minority-owned businesses can also compete for contracts set aside for them under other qualifying programs, such as the Minority Business Development Agency (MBDA), plus 8(a) and HUBZone contracts.
Business Diversity Programs
Many businesses of all sizes have supplier diversity programs. Being a certified minority-owned business can help you gain access to these programs.
They may pledge that a certain percentage of the vendors they work with must be diverse businesses, which of course includes minority-owned businesses.
Grant Opportunities
If you don’t work with the government or large companies, you’ll be happy to hear about this benefit.
It can be difficult to secure funding, but becoming certified can unlock quite a few minority-specific grants from local and state governments, plus certain loan programs and private funding opportunities.
Examples include Minority Business Development Agency (MBDA) grants, First Nations Development Institute grants for Native Americans, and the Wish Local Empowerment Program grant for black Americans.
How to Get Certified as a Minority-Owned Business
Becoming certified as a minority-owned business provides some pretty big benefits. Plus, if the application process gets too overwhelming, you can find professional assistance for a reasonable fee – right here at CSI!
Jo Rawald, our partner in this area, offers a one-year DiversifyBIZ program to guide you through the certification process and help you leverage your minority-owned status for business growth.
While many other advisors charge upwards of $5,000 just to get certified, Jo charges a lower fee for a more in-depth, ongoing service. The DiversifyBIZ program includes:
- Assisting with the application. This includes finding loopholes and answering unique questions.
- Submitting the application to the certifying agency. This can take the agency between two weeks and six months to approve. They need to validate the paperwork and visit your business.
- Ongoing 1-1 sessions for finding opportunities. This includes searching for grants, government contracts, and partnership diversity programs once you’re certified. These one-on-one coaching sessions and resources are invaluable for getting more sales!
Interested in learning more? Check out her minority-owned business certifying services here!
Get Certified & Still Get Tax Benefits!
While there are no tax benefits for being a certified minority-owned business, a monthly accountant can help you by working on your tax strategy year-round.
Now that you know about the requirements to be a minority-owned business, what advantages there are, and how you can register, are you ready to check out monthly accounting services?
If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about what it’s like to work with CSI by clicking the image below:
