What Is the Value of a Diversity Designation?May 18, 2023 10:16 am
The North Shore Alliance for Economic Development (Alliance) has introduced its new Diversity Directory in an effort to improve equity and diversity in both the public and private sectors. This Diversity Directory is both an online and a printable directory and a marketing tool for businesses that would like to offer their services or products to other businesses and institutions within the North Shore region. It will additionally help private businesses and municipalities identify diverse businesses so they can proactively increase equity in their procurement opportunities.
To participate in the directory, a business must be located within 30 specific North Shore Region communities that the Alliance serves and have at least 51% of the ownership team in at least one of the following categories: Immigrant, Lesbian, Gay, Bisexual, and Transgender persons/people (LGBTQIA), Black/African American, Hispanic or Latino (Central/South American or Caribbean), American Indian/Alaskan Native, Asian, Native Hawaiian/Other Pacific Islander, person/people with a (dis)ability, Service-Disabled Veteran, Veteran, and/or Woman/Women.
The goal is to be a marketing tool for the Diversity Directory businesses and a resource for those seeking to proactively increase equity in their procurement opportunities. Certification is not required to be in the Diversity Directory. However, for business owners that seek federal or state certification, there are several additional benefits to those gaining designations.
Let’s look a little closer at what those diversity designation benefits may include.
For this article, we will be using interchangeably diversity-owned, minority-owned, and minority-owned business enterprises as various organizations use different terms to express similar findings.
Access To Government Grants and Contracts
Diversity-owned and minority-owned businesses often face challenges when it comes to accessing financing and being awarded contracts that can greatly impact their success.
According to ZenBusiness Online, “Minority businesses are much less likely to get loans than non-minority business owners, especially for ventures with less than $500,000 in gross receipts.” Additionally, non-minority businesses often have access to fully financed contracts from the public sector.
To help level the playing field, a specialized certification is offered to minority small business owners through the United States Small Business Administration (SBA) 8(a) Business Development Program. This program is designed to help businesses owned and controlled by socially and economically disadvantaged individuals. Under this program, diversity-owned companies can compete for what federal agencies call set-aside and sole-source contracts.
In addition to the North Shore Alliance Diversity Directory, the Commonwealth of Massachusetts also offers a Diversity Designation where designees are able to learn more about the types of contracts granted and opportunities such as COMMBUYS (the Commonwealth’s procurement platform where bidding opportunities occur), the Small Business Purchasing Program, and the Supplier Diversity Program. (Source: Mass Diversity Certification)
Increased Access to Training & Guidance
Certification as a minority-owned business enterprise (MBE) can also open up access to training opportunities, mentoring options, and guidance from outside corporations. For instance, MBEs can access SBA’s “mentor-protege” programs, technical assistance programs, training, financing guidance, and many other programs that can accelerate learning and the development of the business.
Partnership & Networking Opportunities
Having access to network with experts in a specific industry or the ability to partner with a large corporation can be a major benefit of having a diversity designation.
Learning about the “ins and outs” of an industry from professionals who have been through it can be a huge benefit to minority-owned businesses, especially those just starting out and looking for a more experienced mentor in the industry. These networking opportunities can connect people in similar industries who can share valuable experience and guidance. Professionals who have already experienced the challenges of finding financing or the other issues often facing diversity-owned businesses can lend an ear and hand to those who are starting out or growing their already established businesses.
According to NowCorp Online, “Earning your certification as a minority-owned business opens up a whole new world.” The networking opportunities lend themselves to many chances to meet with and learn from many other successful business entrepreneurs, some of whom are also minority-owned and some who are not.
Similarly, partnerships with larger well-known companies can help small businesses thrive. Many larger corporations make it a policy to help disadvantaged businesses. For example, “AT&T and its suppliers have spent over $173 billion with minority, women, service-disabled veterans, and LGBTQ+ businesses in the past 50 years through the Supplier Diversity Program.” (Source – ZenBusiness)
The designation as a diversity-owned or minority-owned business can open doors for many who need access to financing, contract awards, partnerships, mentors, networking opportunities, and exposure to their targeted market. Consider joining the North Shore Alliance’s Diversity Directory by filling out the registration form today and seeking federal and/or state certification.