Members of minority communities have been coming to America for centuries, and many are the inspiration for the original American Dream—come here, build a life and a business, and support your family along the way. Minority-owned businesses have been privy to several perks and benefits over the years as the government and private sector alike encourage the small business community and its diversity. These are parts of American culture, after all. Why shouldn’t they be encouraged to continue to thrive?
If you’re running a minority-owned business in the U.S., you may be able to get a lot more perks than you realize.
Right now, as many as 29% of all businesses are classified as minority-owned, and this is a sector that’s growing at twice the speed of non-minority businesses. Part of this is because of the changing demographic in the U.S., but the bigger part is because of the funds, special programs, and initiatives available to minorities who want to start a business in the U.S.
Starting a business is no easy feat, but it’s also not something that you have to do alone. When you embrace the benefits below, you’ll find your path to success is much smoother. Now, let’s look at how to qualify and then we’ll dive into the available benefits.
The process of becoming an official minority-owned business is not difficult, but it does take some time. You will want to check with the U.S. Small Business Administration to see what kind of tools and resources they have to assist you in your endeavors. There are criteria that must be met in order to get federal funds for your business, and each state may also have its own requirements to consider. Typically, you’ll see things like:
The idea here is that the business needs to be very minority-centric. You can’t start a company and have only the owner as the minority and expect to qualify for all the extra funding and special perks that are available today. The SBA and various grant programs may have their own list of requirements to consider, as well, so keep that in mind.
The Minority Development Business Agency (MBDA) is an organization that is responsible for helping small businesses within the minority community that are still in development or just starting out. This program offers plenty of contracts and grants and can help you grow a business in several ways. The MBDA also has its own selection of grants and loans for minority-owned businesses, with over $500 billion in annual awards. You'll just need to register your business and follow the application guidelines, which aren’t difficult. The evaluation process will determine which companies meet the criteria and are awarded the funds.
As a minority-owned business, you are privy to contracts and grants that are not offered to other small businesses. These are reserved especially for minority companies and others who don’t fit the “typical” business mold. These grants and funds come in all sizes and amounts, and each program will have its own guidelines. You simply get first dibs on these contracts because minorities are the only ones who can bid on them. Almost all contracts from the government that are less than $150,000 end up in this category.
AT&T takes pride in helping minorities and small businesses find their footing, and especially when they are of a diverse background. The company has spent more than $173 billion on partnerships and assistance for minority-owned, women-owned, and other nontraditional businesses. They have several programs and funds in place, and they have made a serious commitment to continuing to support diversity in the future.
UPS also has a Supplier Diversity Program that they use to promote diversity in small business. The program started back in 1992 and to date, it has funded billions of dollars in business endeavors. Annually, UPS spends about $2.6 billion on doing business with their 6,000 or so diverse small business suppliers. Not only will this help you fund your operations, but it could establish a shipping partnership that will benefit your organization, as well.
The 8(a) Mentor-Protégé program is a resource that is designed to help minority businesses through mentorship. This includes development assistance, educational resources, technical and management assistance, and more. You can find financing insight and guidance, trade education, seminars and opportunity fairs, and so much more. There is also access to advanced management training, specialized working capital and financing options, and networking opportunities based on business or purchase category.
This workshop series is offered around the United States to minority businesses that are operated by millennials, as well as entrepreneurships that millennials endeavor to build. The program helps people learn how to launch their business idea, succeed in building and growing a business, and more. The workshop program includes assistance in finding and obtaining funds for the business, as well as a live workshop where you can practice your investment pitch with real investors.
For minority-owned businesses run by Native Americans, the FNDI offers a unique grant program that provides funding for all types of projects and needs. This program is only available for businesses that are owned by Native Americans, however, so other minorities will not be able to apply here. The SBA also offers its own support programs for Native Americans, too. This organization is a great resource for all Native-owned businesses and the people who are a part of them. It can also be a good starting point for anyone considering opening a business.
In addition to the specific programs listed above, there are plenty of other Fortune 500 companies and private sector organizations that are helping minority-owned businesses thrive today. You can register as a minority-owned business and find opportunities all over the place. Some brands may even come to you once you’re registered, saving you the hassle of having to apply for or even look for assistance. IBM, Microsoft, Marriott, and others give minority-owned businesses preferential treatment, and that’s something that you should take advantage of when building your business.
Although there are no specific tax breaks or incentives for minority-owned businesses, there are a lot of tax benefits that come from working with a minority-owned business. Therefore, you’ll want to take the time to check out how your business can empower others in this way. Not only is it helping you, but you can tell your partners that they will also get tax breaks along the way simply by choosing to do business with your company as opposed to one ran by someone who is not a minority. Plans, programs, and savings vary, but it’s a great selling point for you and for the partnerships that you create.
As a minority-owned business, you will also gain access to niche markets and specialty areas that traditional businesses might not find. The promotion of minority-owned businesses is big right now, so many organizations and groups will be trying to persuade you to capitalize on their perks and their markets by using your SMB status as a minority business owner. Although the exact programs and markets vary from one industry to another, you’re certainly setting yourself up for success here.
Today, minority-owned businesses are a critical part of the economy. They have become a bigger part of the business world than most traditional businesses, offering a total of 4.7 million jobs created over the past decade. Not only that, but during that decade, minority-owned companies made up as much as 50% of the growth.
As the “minority” continues to outpace the majority, people from all walks of life will be able to find better ways to get into business and profit as a minority business owner. At the federal level, there are seven groups of minorities recognized and most government programs, grants, and guidelines follow these groupings:
If you fall into any of these groups, you could be eligible for several perks as a minority-owned business, including those perks listed above. You’ll also enjoy programs like:
The Empowerment Zone tax break is set up by HUD (The Department of Housing and Urban Development) and the Department of Agriculture. The latter manages rural applications for tax breaks while the former manages all urban areas. You can qualify for a number of tax breaks here, including the special capital gains exclusion, the empowerment zone employment credit, and any first-year write-offs for expenses.
If you have a solid business idea but you haven’t begun yet, that’s okay. The process of starting a minority-owned business is the same as any other business. You have to follow the steps, starting with making a business plan and choosing a business idea. Then, you can register and certify your business and you will be able to start working sooner than you think. Before you get in over your head, consider:
While you’re busy setting up shop and getting your funding organized, your audience still needs attention. Fortunately, you're not in this alone. With the dedicated live chat agents and virtual receptionists at Smith.ai, you can trust that every message and call will get fielded properly and promptly, even if you’re busy doing other things. Our team can even help you create the perfect strategy to grow your business and capitalize on all the perks for minority businesses that are available today.
At Smith.ai, we know how valuable your customers are and keeping them satisfied is paramount. With our 24/7 live website chat, after-hours phone answering, lead intake and scheduling, and other solutions, you’ll never have to worry about a thing. That means you can spend more time looking for and applying for various business grants and benefits extended to minorities that own businesses.
To learn more, schedule a consultation to discuss our 24/7 chat and phone answering solutions, along with payment collection and lead intake, SMS messaging, and so much more. While you’re tending to your business, we’ll take care of your customers. You can also reach us at firstname.lastname@example.org or (650) 727-6484.