Women and Minority Owned Businesses

Women and Minority Owned Businesses

In case you didn’t know – it’s already March, which means it’s Women’s History Month! As our firm gears up for and attends various events centered on female leadership and empowerment, it got us thinking about women-owned (“WBE”) and minority-owned business (“MBE”) certifications. So, what is an MBE/WBE certification anyway? Some states or municipalities have different applications, others call it M/WBE and group it into one application, but however you describe it, it’s a special certification granted to certain businesses. Despite headwinds on the issue of diversity, MBE/WBE certifications are still alive and well in various states and municipalities, and to the extent that you believe your business qualifies, it’s still worth looking into!

Benefits of MBE or WBE Certification

One of the main benefits of obtaining an MBE/WBE certification is increased visibility and access to contracts that you otherwise would not have access to, including high-value government contracts. We want to note though that you still have to be a qualified bidder to begin with, but having this credential helps open doors that otherwise wouldn’t be as easily available. Having your MBE/WBE certification also makes you eligible for certain government-sponsored loans, grants, and other funding opportunities. Further, you may have access to certain databases, educational opportunities, and networking opportunities. Lastly, having this certification gives you increased credibility, as it shows that you went through the certification process and are properly credentialed.

Are You Actually a Minority or Women Owned Business?

Now that you know the perks, how do you prove that you’re a MBE/WBE business eligible for certification? This is a question that seems obvious to a lot of folks, but actually isn’t so obvious. Some businessowners mistakenly assume that they would automatically qualify for MBE/WBE certification by having a minority or woman owner (whether it’s a majority shareholder or member). Not so fast! Every state and municipality is different (i.e., NYC’s certification requirements differ very slightly from NY state), but the main requirements are largely consistent. While we can go through every single detail and information that you need to provide, let’s focus on the big-ticket items: to qualify as an MBE/WBE-owned business, your business must be majority-owned (at least 51%), operated, and controlled by a minority and/or a woman. The “operated” and “controlled” part is what gets people in trouble. Those “unanimous” decision provisions in your operating agreement will get flagged and jeopardize your application. In sum, if you are a woman (or minority), and own 51% of your business, but there is a man or non-minority owner who gets to veto your decisions, you’re out.

How to Submit an Effective MBE or WBE Application

Even if you know your operations comply with the above requirements, you need to be careful to make sure that your application doesn’t somehow trigger the reviewer into thinking that you’re actually not a minority or women-owned business. For example, let’s say you’re majority owned, but your male or non-minority counterpart wants to have the right to certain minor and inconsequential day-to-day decisions. While you are majority owner, and technically do control and operate the important aspects of your operations, the fact that there are any decisions that you can’t make without a man or non-minority will likely trigger a question by the applicable government authority, or worse, trigger a denial altogether.

We hope this helped inspire you to understand the MBE/WBE process! It is a great tool that can unlock business opportunities. And as always, if you’ve got questions, you know we’ve got answers!

~ The W + K Team