Why Your Business Should Become MBE/WBE Certified
In the local and national business landscape, where small businesses and startups carve out their niche, there exists a need to level the playing field. Minority Business Enterprise (MBE) and Women Business Enterprise (WBE) certifications bolster this mission and offer a pathway for small and diverse businesses to access opportunities historically out of reach. The MBE/WBE certification is necessary for the economic vitality and inclusivity of Rhode Island's business landscape.
According to the most recent RI Secretary of State Annual Report Survey voluntary responses, 28% of RI For-Profit entities are women-owned, and only 8% are minority-owned. Meanwhile, according to the 2020 US Census, 50.9% of Rhode Islanders are female and 34.9% are non-white. There is a clear discrepancy in the proportion of MBE/WBE businesses to the general population in the state.
Economic Development and Access to Opportunities
Certified businesses are crucial in driving innovation, creating jobs, and stimulating economic growth in communities across Rhode Island. MBE/WBE certification also enhances the visibility and credibility of local businesses, attracting investment and driving partnerships. As the nation continues to evolve with an ever-changing economy, certified MBEs and WBEs stand at the forefront, driving progress and prosperity.
The financial landscape is evolving in favor of diversity, with lenders nationwide now offering more competitive loan terms for businesses founded by minorities. A growing number of venture funds and investors are prioritizing diversity, requiring a percentage of their portfolios to go to MBEs and WBEs. Recent legislation, like California's New Diversity Reporting Law, underscores this trend by compelling transparency regarding investment demographics.
NEMIC is proud to work closely with and recognize Venture Funds that invest in black, latine, and female-founded companies. Rogue Women’s Fund is local to Rhode Island and provides investing in women-led tech companies nationwide. Collide Capital, co-founded by Rhode Island native Aaron Samuels, focuses on investing in diverse companies where over 80% of companies they’ve invested in are minority-owned.
Corporations are also following suit, diversifying their supply chains and helping to build a business ecosystem that reflects the diversity of Rhode Island's population. AT&T for example, has its Supplier Diversity Program, which commits 21.5% of total procurement expenditures to MBEs and WBEs.
Government agencies and corporations play a significant role in driving economic activity. MBE/WBE certification opens doors to procurement opportunities with these entities, enabling certified businesses to compete for contracts and projects that were previously out of reach.
Locally, Rhode Island General Law 37-14.1-1 states that a minimum of 15% of the dollar value of an entire state procurement project must be awarded to certified minority and women-owned businesses. By partnering with certified businesses, government agencies, and corporations demonstrate their commitment to supporting local entrepreneurs and driving positive social impact in their communities.
The Certification Process
To become a certified MBE or WBE, you must meet the following requirements as outlined by the Rhode Island Division of Equity, Diversity & Inclusion:
The business must be a for-profit business
The Minority, Disadvantaged, or Women owners must own at least 51 percent of the business interest of the organization.
The majority owner must be a member of a definable minority group.
The majority owner’s personal net worth cannot exceed 1.32million
The majority owner must demonstrate that they have control over:
The day-to-day management of the business
The policy-making mechanism of the business.
Existing businesses whose ownership and control has been transferred to a member of the socially and economically disadvantaged groups below must be in that individual’s control for a minimum of six months before applying for WBE certification.
Must be in business for at least 6 months.
The majority owner must be a legal citizen or lawful permanent resident of the US.
The business must be a small business as defined by SBA.
The business must be in operation for a minimum of six (6) months before applying for certification.
Definable minority groups as seen by the Rhode Island Division of Equity, Diversity & Inclusion:
Black: All persons having origins in any of the Black racial groups of Africa.
Hispanic: All persons of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race.
American Indian/Alaskan Native: All persons having origins in any of the original peoples of North America.
Asian American: All persons having origins in any of the original peoples of the Far East, Southeast, Southeast Asia, the Indian Subcontinent, or the Pacific Islands.
Portuguese: All persons of Portuguese, Brazilian, or other Portuguese culture or origin, regardless of race.
Women: Any female qualifies as a class of minority.
Disadvantaged: Members of other groups or other individuals, found to be economically and socially disadvantaged by the Small Business Administration under Section 8 (a) of the Small Business Act, as amended (15 U.S.C. Chapter 637 (a)).
If you’re interested in becoming a certified MBE or WBE in the state of Rhode Island, or if you have any questions about the process, reach out to us at NEMIC. Through our EMPOWER Program, we’re working closely with RI Commerce and RI Division of Equity, Diversity & Inclusion to assist businesses in the application process.