Q: What is a small or minority-owned business?

A: A minority-owned business is 51% (or more) owned by one or more women or ethnic-minority owners. This owner, or these owners, have the skills to run the business and are engaged, full-time, in running the business.

A small business is defined as a business that is “independently owned and operated and which is not dominant in its field of operation”. The actual size, in employees and revenue, varies from industry to industry, but it is possible to have 500 employees and still be a small business. Check the requirements for your business on the SBA website:
www.sba.gov/services/contractingopportunities/sizestandardstopics/size/index.html

Q: Why should I register my small or minority-owned business with Government Agencies?

A:  The Federal Government awards contracts to private and public companies to the value of approximately $1 billion a day. 23% of this amount is set aside for contracts awarded to small businesses, especially minority-owned small businesses.

In addition to the Federal Government, State and County agencies set aside a significant percentage of their outsourced contracts exclusively for small and minority-owned businesses.

Q: Once I register my business, and obtain my certification, does this guarantee that my company will get Country, City, State or Federal contracts?

A: No. Certification and registration is the first step in obtaining Government contracts.

It is necessary to follow up daily or weekly by checking for suitable work opportunities on the web sites that your certification accesses. We will walk you through the process, and make sure that you are comfortable and competent in using the follow up tools.

Q: Is registration suitable for my business?

A: Not necessarily. It depends on the type of business you own and operate. If you have a nail and waxing salon, for instance, you are unlikely to benefit from registration. However, the Government sector is by far the largest purchaser of goods and services in the USA. They purchase a huge range of goods and services.

Q: What are the requirements for registration?

A: Most Government bodies require that the business owner is a US citizen who owns at least 51% of the business. They also confirm that this owner has the skills to run the business, and that he or she is involved full-time in the day-to-day operation of the business.

There are some variations. For example, some counties will accept permanent residence (‘green card’) instead of citizenship.

Q: When would authorities reject an application for registration?

A: A common situation is where a husband puts a business in his wife’s name, and applies for MBE minority-owned status. The wife might work in the business, but the husband has the core skills. For example, it is an IT business, and he is the programmer, or it is a contracting business, and he is a building specialist. In such cases, the minority-owned registration would be rejected. It would, however, be fine to register the company as a small business.

Q: Whom should I register with?

A: It is generally recommended that companies register with the Federal government, their State government and the Counties and Cities in the area where they want to conduct business.

Many large companies have small business and minority supplier programs, and you can register with them as a vendor. These companies also usually reserve a significant percentage of their contracts for minority-owned and small businesses. They usually employ a dedicated small-business advocate to help you to do business with them.

Q: What will registration and certification cost me?

A: Registration and certification with Government bodies is free.

If you employ a private company to prepare the documentation on your behalf, they will obviously charge a fee for work done on your behalf.

Different types of registration require varying amounts of work. The fees charged (and promises made) vary considerably from company to company.

Q: Can you explain more about the work and costs involved, and why people pay for help if registration is free?

A: Registrations are not easy. One government official explained “they are like an entrance exam – if they were simple, then anyone with a computer, or a truck and a box of tools, would be on our database applying t0 become a government contractor. We would not know who is organized and reliable, and who had simply signed up for fun.”

Many small business owners start registering. They take the (free) classes and begin putting their documents together, but then they realize that Local government, State and Federal certifiers pay very close attention to detail. They find that there are many computer-based tasks involved, and that these are not always user-friendly. When they hit a problem, they do not have time to go, repeatedly, for the (free) counseling offered by SBA. They also see that there is a lot they need to know about using the certifications after these are obtained in order to actually obtain contracts.

They either give up, or find a specialist who can fix the problem, and get them up and running. Sometimes, however, they pay for a specialist who gets the certification, but does not show them how to use it properly. They then become discouraged and let their certifications lapse.