Excerpt from "Obtaining Minority Status: Benefits and How to Get Started"
- November 17, 2015
- by Kimberly Faber
- Business Tips
- Marketing
Every government contract is required to work with a certain percentage of minority business vendors. In Maryland, for example, state agencies were required to award 29% of their contracts to certified MBE firms in 2014 and 2015.
But who qualifies as a minority contractor and what does it take to get certified?
In Torri Schaffer's presentation at ServeCon 2015, we learned about what it takes to attain minority status, what it can mean for your business, and what qualifies a company as a minority. Torri's Legal Services is a woman-owned company and is a classified as a Federal Disadvantage Business Enterprise, a Minority Business Enterprise in Maryland and a Small, Woman-owned, and Minority-owned business in Virginia. For more on this topic, read Obtaining Disadvantaged Business Enterprise/Minority Status for Your Process Serving Firm.
Extended Clip from Obtaining Minority Status: Benefits and How to Get Started"
Torri’s Legal Services recently attained minority status for being a woman-owned company, making the company eligible for the percentage of state contracts that must go to minority businesses. In her presentation, Torri will walk you through the steps her company took to achieve this certification and the benefits. Learn about what qualifies as a minority business, what documentation had to be provided, what visits and interviews are necessary, and how to apply.
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This is a condensed version of Torri's "Obtaining Minority Status: Benefits and How to Get Started" presentation at ServeCon 2015. You can rent the full presentation or purchase all videos from ServeCon by clicking the button below.
Learn about what qualifies as a minority business, what documentation had to be provided, what visits and interviews are necessary, and how to apply.
Torri's Legal Services as a Minority Contractor
Torri's Legal Services has been in business for 25 years, and owner Torri Schaffer was a founding member of the Mid Atlantic Association of Professional Process Servers (MAAPPS), a former president, and the current vice president of the association. She has also served as a board member for the National Association of Professional Process Servers.
As a woman-owned business meeting the additional criteria, Torri was able to get certified as a minority business in Maryland and Virginia.
- DBE: Disadvantaged Business Enterprise
- MBE: Minority Business Enterprise (Maryland)
- SWaM: Small, Woman-Owned, and Minority-Owned Business (Virginia)
What is a Minority Status?
Minority status is a status assigned to groups of people or organizations that are presumed to be socially disadvantaged, such as:
- Women
- African Americans
- Hispanic Americans
- American Indians/Native Americans
- Disabled Individuals
- Non-profit organizations serving the physically or mentally disabled
What are the Advantages of Being a Minority Status?
The Small Business Administration's Office of Government Contracting works with federal agencies to award at least 23% of all government contract dollars to small businesses and helps federal agencies meet specific statutory goals for:
- Small, disadvantaged businesses
- Women-owned small businesses (WOSB)
- Service-disabled, veteran-owned small businesses (SDVOSB)
- Small businesses that are located in historically underutilized business zones (HUBZone)
- Socially and economically disadvantaged individuals (8(a) program) such as Black, Hispanic or Native Americans
How Do You Become Certified?
Certification is a four-step process:
- Application
- Investigation
- Evaluation
- Determination
The application must be filled out and submitted with the required documentation. Then, an investigator will visit the office to observe and put together a report on the business. That report, along with the application and documentation, is evaluated to determine whether or not the company truly a minority business.
Eligibility Requirements
There are several requirements a company must meet in order to become minority certified. These requirements surround:
Ownership
You must own at least 50% of your business and be a socially and economically disadvantaged individual.
Minority Status
You must be a woman, African American, Native American, veteran, or disabled person to qualify as a minority.
Control
The investigator sat in Torri's office for 45 minutes to make sure she knew what she was doing and was in control of the company.
Personal Net Worth
You will need to submit documentation on your personal net worth and your company's annual revenue.
Size
Your company must meet the size requirements to qualify as a small business.
What Qualifies as a Small Business?
To qualify as a small business, your annual revenue must be less than $2.5 million, your company must be independently owned and operated, and you cannot be a sole provider in your market.
How to Obtain SBE, MBE, and DBE Certifications
Different states have different levels of certification requirements, so you will need to check with your state to determine which agency provides minority certifications.
In some cases, you can certify through an agency that specializes in getting small businesses minority certification.
In Maryland, the Department of Transportation (MDOT) Office of Minority Business Enterprise (OMBE) is Maryland's official certification agency for the MBE, DBE, and SBE programs. MDOT provides help to applicants detailed instructions and monthly workshops.
The process takes several months to complete.
Codes for Government Contracts
There are two main codes the government uses to classify government contracts when posting RFPs:
1. NAICS Code
The North American Industry Classification System (NAICS Code) identifies companies based on size and activities.
The NAICS Code Torri's Legal Services uses is #541199: All Other Legal Services.
2. DUNS Number
The Data Universal Numbering System (DUNS) serves as a business credit report similar to a personal credit report that is tied to your social security card.