Supplier diversity is a crucial part of the success of an organization. For companies, it is a way to promote innovation, develop networks, drive hiring and, perhaps most important of all, it is a way for companies to enjoy the many benefits of diversity while taking steps to close. the economic equality gap. It’s no secret that the past year witnessed a crucial wave of racial justice and social awareness. Now more than ever, both consumers and companies are prioritizing businesses that actively address diversity, equity and inclusion. They are looking for diverse vendors – that is, businesses that are owned and operated by at least 51% from underrepresented groups – in an effort to address racial injustice and support minority entrepreneurs.
According to the * Billion Dollar Roundtable, 28 Fortune 500 companies spend at least $ 1 billion each year on diverse vendors. Here are some of America’s leading corporations actively looking to spend money on diverse-owned businesses. So what does this mean? Being certified as a diverse supplier is more important than ever. Certification not only creates new business opportunities with larger corporations, it also increases access to resources and support. It serves as proof that your business is diverse, stable, and ready to take on new growth opportunities, and is an important step for diverse small business owners looking to grow their business.
To learn more about the opportunities available exclusively to diversely owned businesses and how the process works, we caught up with Thelma Ferguson, Head of Northeast Middle Market Banking and Specialty Industries at JPMorgan Chase Commercial Banking, who provided these valuable insights on how to expose and promote your business.
Why Should Business Ownership Be Certified?
All businesses are in the relationship business. With the right connections, diverse small business owners can develop new ideas, avoid common (and costly) mistakes, and discover emerging opportunities. Getting certified as a diverse-owned business creates connections with other like-minded businesses, as well as hundreds of US companies, accounting for billions of dollars in hiring.
In addition, diversity certifications serve as proof that your company meets the requirements of the inclusion program and can be considered for supplier contracts with large companies, such as JPMorgan Chase, that go through formal procurement processes, as well as with the government. federal. Getting certified is the best way to be considered for these opportunities. Many private companies dedicate a percentage of their annual spending to diverse certified companies, so non-certified businesses are losing potentially lucrative contracts and growth opportunities. For example, more than $ 83 billion is spent each year with various Billion Dollar Roundtable vendors. The federal government also * allocated 16% of its $ 400 billion annual budget for products and services to diverse small businesses.
Bottom line: Certification opens doors to places where diversely owned businesses have often been excluded in the past.
What are the benefits for minority-owned businesses to get certified?
Many opportunities are exclusively available to certified diverse ownership businesses. Certifying your business is an investment in your business, like when you apply for a loan. The time spent now gathering documents and meeting with people can pay off for years to come.
Some of the most important benefits include:
- Business opportunities. The main corporate purchasing agents are looking for diverse businesses. Upon obtaining certification, businesses are entered into a national database that clients regularly turn to to find companies that can meet their business needs and advance their diversity goals.
- Access to capital. The certification provides companies with additional financing opportunities through banks and venture capital firms. Additionally, many networks have dedicated capital funds for various businesses.
- Significant support. Certification organizations invest in the success of their members’ businesses. They often offer educational sessions, training, networking events, and business link programs that can enhance business opportunities for connections and growth.
- Access to supplier diversity programs. Companies are now making a conscious effort to work with diverse property providers. Some have created special supplier diversity programs that cultivate relationships with other diverse-owned businesses, provide information sessions on how the company is approaching procurement, and host educational sessions.
- Referral opportunities. Networks are powerful because they allow business owners to access hundreds of people they don’t yet know. By entering one of the certification networks, diversely owned business owners open up new opportunities through direct relationships and also through referrals.
As a certified diverse property vendor, not only are you on their list, potential customers are on yours too. Business owners can communicate directly with diversity teams at corporate vendors to ask questions and explore opportunities, and they can reach out to other diverse-owned businesses to explore collaboration opportunities.
What does the official accreditation process entail?
There are many ways your business can be certified as a diversely owned business. Each certification is designed for a specific historically underrepresented group, so each type of diversity certification has its own requirements.
Typically, vendor diversity certifications are available to businesses that have at least 51% owners and operators that come from members of historically underrepresented groups, including ethnic minorities, women, veterans, members of the LGBTQ + community, and people with disabilities. . Supplier diversity certifications are available through many organizations, including the National Minority Supplier Development Council, the National Business Council of Women’s Enterprises, the National LGBT Chamber of Commerce, Disability: IN, and the National Development Council. Veterans Business.
Why do you think minority business owners are reluctant to get certified?
The certification process can be time consuming, which is why some minority-owned business owners refrain from getting certified. The rigor of the process ensures high standards and trust and ultimately results in eligibility for significant growth opportunities for deserving minority-owned businesses.
Busy time is well spent. Across all industries, many companies are making significant investments to meet the needs of the Latino and African American communities. For example, as part of JPMorgan Chase’s * pledge to promote racial equity of $ 30 billion, the company is increasing loans and technical assistance, as well as investing an additional $ 750 million in businesses in Latino and African-American communities.
What resources does JPMorgan Chase provide to help diverse businesses become certified?
JPMorgan Chase Commercial Banking has designated resources to help educate business owners on the innovative effect of becoming a certified diversely owned business. From general facts about the certification itself to opportunity acquisition opportunities, business owners can learn more by accessing this * how-to guide or by visiting https://www.jpmorgan.com/commercial-banking/insights/benefit -from-diverse-owned-certification.