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Diverse supplier certification and programs can have a huge impact on the success of women- and minority-owned businesses. Learn why and how you can benefit.
Diverse supplier certification and programs can have a huge impact on the success of women- and minority-owned businesses. Learn why and how you can benefit.If you identify as a diverse-owned small to mid-sized business, you likely recognize the importance of every new business opportunity and know firsthand that systemic barriers can pose challenges to growing your business. Fortunately, diverse supplier certification can help you overcome some of these challenges by giving you access to programs that provide professional connections, funding options and resources that can help strengthen your business.
In a recent survey of small business owners, 67% of respondents identified as a minority- or women-owned business, yet less than half (43%) had a diverse-owned business certification. Even if a business is already certified, it might not recognize the full benefit of its certification or understand how to leverage it to its best advantage. To reap the full value of your status as a diverse supplier, you’ll need to understand how to take action and tap into the wealth of opportunities for certified companies.
In this post, we’ll cover what a diverse supplier is, the benefits of certification and some of the programs that offer diverse supplier certification. Furthermore, we’ll explore some of the business and financial programs available to certified diverse suppliers and provide you with some diverse supplier success secrets.
A diverse supplier is a company that is more than 50% owned and operated by an individual or group that belongs to a traditionally underrepresented or underserved group. Within the United States, for example, there are roughly 16 categories to classify diverse enterprises. Common classifications include small business enterprises (SBEs), minority-owned business enterprises (MBEs) and woman’s business enterprises (WBEs). However, over time the definition of diversity has evolved to include businesses owned by other minority groups such as LGBTQ+, veterans and people with disabilities.
A diverse supplier is a company that is more than 50% owned and operated by an individual or group that belongs to a traditionally underrepresented or underserved group.
Diverse supplier certification programs provide a formal process to screen and verify that a business qualifies as diverse, and they are designed to ensure that only businesses that meet minimum eligibility criteria are awarded certification. Upon successful completion of the process, a business is awarded certification that serves as proof it is diversity-owned.
Diverse supplier certification can open the door to many opportunities for small and mid-sized businesses. Many organizations dedicate spending to certified diverse companies, so if your business is not certified, you might be missing out on lucrative contracts and growth opportunities. In fact, according to a study by The Hackett Group, companies globally expect to increase their diversity spending goals by 50% to an average of 13% of spend by 2025 — something to keep in mind if you are thinking of getting certified.
Certifying your business is an investment that offers benefits such as:
Several government agencies and third-party organizations offer diversity certification programs, so it’s important to do some research and choose one or more that are suitable for your business needs. Note that a single business can hold multiple certifications. Each type of diversity certification typically has its own set of eligibility standards, so it’s best to check with the issuing organization for full details.
Large corporations that offer supplier diversity initiatives often rely on the most widely known certifications to determine whether your business meets diverse supplier eligibility requirements. Below are some of the most common certifications and organizations that offer certifications:
Certification is just the first step. While obtaining diverse supplier certification opens up access to opportunities, it’s up to you to leverage those advantages. Here are some tips to help you succeed:
In most cases, the certifying organization offers member businesses a wealth of training and development programs, whether that’s an online course, a weekend workshop or an ongoing mentoring program. It’s essential to do your due diligence to determine which certification(s) will offer you the best access to corporate and government buyers, training programs and networking events.
Attend information sessions and speak to other certified members to learn more about the certification and its impact before pursuing accreditation. The better understanding you have of the opportunities available and how to access them, the more value you will get from your certification. Additionally, many corporate enterprises run their own diverse supplier programs that offer excellent development resources and mentorship, too.
These programs are typically designed to help you overcome the unique challenges you face as a diverse supplier. Taking advantage of the various resources available can help you build valuable connections and insights into how you can grow your business successfully.
Procurement professionals are like anybody else. They’re more likely to do business with people they know and remember. One of the most significant benefits of supplier development organizations is how they connect diverse businesses with people who can open the door to new business opportunities.
Networking events, such as annual conferences, are valuable because they enable you to schedule several face-to-face meetings with clients and prospects in a short time frame. Live networking events also create more opportunities for new, unexpected connections. The person sitting next to you at lunch might introduce you to your next big customer.
Virtual events can also offer you helpful business insights or opportunities to broaden your connections. You can find online events hosted by organizations such as:
Beyond these options, there are also many local and regional chambers, industry associations and networking groups hosting events where you can find support. Eventbrite can be a good first stop for locating those near you.
Not great at networking and socializing? Try volunteering. That might mean serving on a committee, but don’t overlook the value of helping at the next golf tournament or luncheon. It’s another way to get in the same room as the people who can help your business. More often than not, they’ll ask you about the products and services your company offers.
Supplier development associations are a powerful way to meet corporate buyers, but it’s just as important to engage with other diverse businesses, either in person or online. LinkedIn Groups are a great way to create relationships with like-minded entrepreneurs. Otherwise, you might consider joining the conversation on Twitter by following and engaging with relevant hashtags. Other suppliers can share essential information about new business opportunities or advice on the best way to solve the problems you’re facing. Or you might be in a position to help them with your own hard-earned experience.
Small to mid-sized businesses often face challenges when securing business loans and other forms of traditional financing. Yet, the barriers to accessing capital are even more significant for diverse-owned businesses.
To level the playing field for women- and minority-owned businesses, corporations are increasingly offering programs and initiatives as part of their environmental, social and governance (ESG) strategies. Here are a few to consider.
Addressing cash flow issues can be particularly challenging for diverse-owned businesses, which often struggle to qualify for affordable working capital financing. However, as part of increased efforts to support and diversify their supply chain, many corporations are offering diverse suppliers a better solution to cash flow issues — early payment programs.
Early payment programs enable you to accelerate payment on your invoices by offering your enterprise customers a small discount in exchange for early payment. This can increase your working capital without requiring you to take on additional debt. Furthermore, early payment programs can be quicker and more cost-effective than other financing options.
If you have large enterprise customers, they may already be using C2FO’s Early Payment platform. This means you can log in and request early payment on their outstanding invoices to increase your working capital immediately.
On C2FO’s platform, enterprises can create a dedicated opportunity marketplace where diverse suppliers can request early payment on invoices at competitive rates. The C2FO Diverse Supplier Community creates a space for diverse suppliers to build relationships with other companies, share resources, obtain alternative forms of funding and access new business opportunities. Some of the world’s leading companies are using opportunity marketplaces to support diversity and inclusion efforts.
For instance, Albertsons Companies launched its opportunity marketplace in 2021 to help diverse-owned businesses alleviate immediate capital challenges by making access to working capital more equitable with funding at significantly lower rates.
In today’s business climate, large enterprises are making significant investments in diversity, equity and inclusion initiatives and are eager to do business with diverse-owned businesses more than ever. In fact, many programs, resources and opportunities are available exclusively to women- and minority-owned companies. Ultimately, gaining diverse supplier certification is an investment in the success of your business. It comes with numerous benefits that can have a far-reaching impact on the growth trajectory of your business.
Learn more about the Schultz foundation and funding opportunities.
This article originally published January 2022, and was updated April 2023.
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