The MWBE Certificate: An Intro to the What, Why, and How

Posted July 24, 2020 by Sasha Butkovich in Running a Business 101
State programs exist to help minority- and women-owned businesses compete against others in their industry. Read about the benefits of the MWBE certification process.

Running a small business is a challenging endeavor. Developing the products or services, gaining more customers and contracts, and competing in the marketplace are all part of the daily grind.

For minority and women-owned businesses, there are programs in most states that actually focus on promoting equity by helping to level the playing field. If you haven’t heard of the MWBE certificate, it’s about time you dive in.

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What is an MWBE certification?

MWBE stands for Minority/Women-owned Business Enterprises. In some states, the two may be treated separately, and you may see MBE or WBE instead. In either case, it’s a certification issued by the state that provides developmental benefits to these businesses. At least 47 states, plus Washington D.C. and Puerto Rico, have state-level MWBE development programs. There are also a number of existing certification programs that are run by federal and local government agencies, and private organizations.

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The Benefits of Getting Certified

There are many benefits to obtaining the MWBE certification. Firstly, it gives a leg up to businesses that otherwise might not have the ability to compete with bigger players. By giving these businesses access to development assistance, they’ll have more opportunities and resources at their disposal.

This can help your business get government contracts that may not have been accessible before. If you have a catering company, for example, you might have the opportunity to cater a treasury lunch. If your company makes soap, you might be in the running to supply soap to a state office facility.

The benefits vary by state, but overall, MWBE certification gives businesses the ability to reach a broader network of customers, contracts, and resources.

Certified businesses are also added to the state’s list of MWBEs. This list is publicly accessible, so you get greater visibility and exposure to other companies, too. If someone needs a graphic design agency for their website and they want to work with an MWBE, they can find you on the list.

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Small business owners may also participate in conferences and networking events through the MWBE program. Additionally, some states offer development workshops, training, and courses to those businesses. The benefits vary by state, but overall, MWBE certification gives businesses the ability to reach a broader network of customers, contracts, and resources.

Blog - Image - MWBE US Map V2 United States map depicting states in green that offer free certification applications

Why Businesses Work with MWBEs

Why might other companies seek out MWBEs to work with? Many larger companies actually have supplier diversity programs to promote opportunities for diverse suppliers (e.g. MWBEs). Not only does this help diversify and strengthen the supply chains for those companies, but it can also lead to innovation across the board.

How to Get the MWBE Certificate

As mentioned above, many states offer MWBE programs, and the certification process differs from state to state. That said, many states align with federal statutes related to business that define “minority” as people who are African-American, Alaskan Native, American Indian, Asian-American, or Hispanic. MWBEs are companies with minorities or women controlling 51% of the firm's operations. Publicly owned businesses may also qualify, but minorities or women must control more than 50 percent of the stock offerings.

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In addition, there may be other qualifications required by the state. This could include things like a personal net worth restriction for the owners, a restriction on the number of employees at the company, or a length of time the business must have been in operation. You will also have to provide supporting documents to back it all up.

You’ll want to carefully check the specific eligibility requirements in the state where your business is based to make sure you qualify — we’ve included a list of state- and region-specific programs to reference at the end of this article.

Applying and becoming certified can be a bit of a lengthy process. And to top it off, you may need to get re-certified each year (make sure to verify the specifics with the program that initially certified your business). But depending on your business, it can be well worth it to reap all the benefits.

State Programs Available

This list will be updated as new information becomes available.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.