If you are a minority entrepreneur, you may have encountered obstacles that make it challenging to grow your business. The good news is that being certified as a Minority Business Enterprise (MBE) or Small Business Enterprise (SBE) can help you overcome some of these obstacles.
Becoming an MBE or an SBE can open the door to corporate and government business contracts. This article explains how these certifications can take your business to extraordinary levels.
What Are SBE/MBE Certificates and Why Do You Need One?
Being certified as an MBE or SBE allows you to access the large budgets of the state governments and major corporations.
To qualify for the MBE certification program, the company must be minority- or woman-owned.
The legal definition of a minority-owned business is one that is at least 51% owned and operated by a U.S. citizen who is at least 25% part of any of the following races: African American, Asian, Pacific Islander, Hispanic, or Native American. The applicant must also reside in the state to start the application process in Maryland.
The SBE Certification is an identifier given to companies with annual revenue of less than $750K and fewer than 100 employees. It’s possible to be both an MBE and an SBE, and many states’ certification process allows you to apply for both at once.
MBE and SBE accreditation is often more accessible than federal accreditation, making it an ideal place to start for smaller or newer organizations.
In most cases, the average company finds it challenging to get into the supply chains that would allow them to sell to corporations or nationally-known companies. These giants often need to offer supplier diversity programs. Programs such as Minority Business Enterprise ensure that a portion of the budget of these large companies purchases products/services from minority-owned (and MBE/SBE-certified) companies.
Eligibility for SBE in Maryland
- The 51%-business owner must be a citizen or lawful permanent resident of the United States.
- The company’s average gross receipts cannot be greater than $28.48 million averaged over the last 3 fiscal years or the portion of a year during which the business has been in operation. This is the U.S. Department of Transportation size standard for small businesses.
- Your company must have existed for at least 2 years before applying for certification. You must not have been convicted of any crimes or felonies during that period (excluding minor traffic violations).
- If you don’t own 51% of your company, you can apply only if all your employees are also minorities or women—and there have been no discrimination charges filed against the company since the application deadline for the previous year.
Eligibility for MBE in Maryland
The MBE program is open to both women-owned and minority-owned businesses. The program requires that the company be at least 51% owned and managed by women or minority group members.
The Maryland Procurement Code (MPD 4100) defines an MBE as a business that:
- Is at least 51% owned by one or more individuals who are members of a group identified as being socially disadvantaged;
- Has been in existence for 3 or more years before its application for certification;
- Has received one or more contracts from MDOT during the previous 12 months (excluding emergency contracts); or
- Has been issued any state license within 30 days of application for certification
What to Do to Get an SBE/MBE Certificate
If you qualify for an SBE or MBE certificate and feel it would benefit your business, here’s a quick and easy guide to applying:
- Download the Uniform Certification Application (UCA). You can print it out or fill out the PDF on your computer.
- Read the directions carefully before filling out the application.
- Fill out every field on the application. In places that do not apply, write “N/A.” Include a brief explanation of why the information is not applicable in the sections with the “N/A” marking.
- Download the necessary Personal Net Worth (PNW) Form, read the PNW Overview and PNW Guidelines, and then fill it out.
- Review the relevant Document Checklist before submitting applications.
- Submit and apply here to become certified.
- Hold onto a copy of the complete application details for your records.
Get Help
No need to figure all this out on your own! There are several places to go for support in filling out the UCA and making other certification applications. The Montgomery County Economic Development Corporation (MCEDC) hosts monthly webinars where applicants can ask questions and get specific guidance on the application process.
Many more answers are available in the MCEDC Resource Guide for Montgomery County, MD Businesses.
The State of Maryland also offers detailed guidance in its monthly virtual Certification Application Assistance Workshops.
Hopefully, this article has shed more light on Maryland’s certification programs for minority-owned and small businesses and how you can use them as an additional step in your career or business development.