06 Jan Economy presents opportunity for minority, women-owned start-ups
Madison, Wis. – It is no secret that the economy is weighing on the finances of many small and early-stage companies. Moreso than ever, small companies must pursue business opportunities wherever possible.
While there are many programs in place to assist small companies of all types, this column will shift gears a bit and focus on programs that are designed to assist minority-owned and women-owned businesses. These programs can be an incredible benefit if you anticipate that one of your company’s key markets will be state or federal governments or large companies that are making an effort to support minority-owned or women-owned businesses.
Although there are many such programs throughout the states, we will focus on the Wisconsin Minority Business Development Program and the Wisconsin Women-Owned Business Certification.
Wisconsin’s MBE program
The Wisconsin Minority Business Certification Program is a program set up to help the State’s minority business enterprises (MBEs) in selling their products and services to Wisconsin’s various governmental departments and agencies. To be considered for certification as an MBE, a business must satisfy two main criteria: (1) the business must be at least 51 percent owned, controlled and actively managed by “minorities” (for purposes of Wisconsin’s program, this means American Indian, Asian-Indian, Black, Hispanic, Asian-Pacific, Native Hawaiians and Polynesians, Eskimos and Aluets), and (2) the business must be performing a useful business function.
For example, in a corporation or LLC, minorities must own 51 percent of the voting shares or interests in the respective entity, and minorities must actually and actively control and manage the business. Many more details can be found on the Wisconsin Department of Commerce’s website along with the forms you need to file to become certified.
Women-Owned Business Enterprise program
According to the Wisconsin Department of Commerce, 40.2 percent of all privately-owned businesses in Wisconsin are owned by women, and the WBE program is designed to help those businesses. The requirements are very similar to the MBE program described above. Generally, a business must be 51 percent owned, controlled and actively managed by women.
As with the MBE program, you should note that the application process can be fairly time-consuming, and you must be willing to disclose fairly detailed and otherwise private business and personal information to support your application. The State takes these programs very seriously and conducts a rigorous examination of your business before it will issue a certification.
Program perks and other helpful resources
These programs are established in large measure to assist MBEs and WBEs in procuring state government contracts, but they can also be an advantage when competing for business from various private companies. For example, the State of Wisconsin targets at least 5 percent of its government contracts at certified minority-owned businesses.
In the private sector, many large companies have “supplier diversity” programs in place. These corporate initiatives are designed to ensure that a certain portion of the sponsoring company’s supplier contracts are awarded to minority-owned or women-owned businesses.
Johnson Controls, for example, was recently named “Corporation of the Year” by the NMSDC for its efforts in improving business opportunities for minorities. Johnson Controls spent over $1 billion last year in goods and services from diverse firms, which included minority-owned businesses. Clearly, there is tremendous opportunity for minority-owned and women-owned firms under these programs.
This column only scratches the surface of the available programs. There are similar programs in many other states (see, for example, details on the Illinois programs at
http://business.illinois.gov/women_assistance.cfm. At the federal level, the United States Department of Commerce runs the Minority Business Development Agency and the Small Business Administration runs the Office of Women’s Business Ownership.
Furthermore, there are private organizations that provide certifications for businesses owned by minorities (see, for example, the National Minority Supplier Development Council and the Women’s Business Enterprise National Council. All of these organizations have similar eligibility requirements for certification, but they do vary somewhat. If you are interested in the opportunities, check out the various requirements to see if your business will qualify.
If you are interested in learning more about the Wisconsin MBE or WBE programs, or the various other similar programs mentioned in this article, I strongly encourage you to visit the websites listed above.
Phil Koutnik, an attorney in the Milwaukee office of Whyte Hirschboeck Dudek, also contributed to this column. He practices as a member of the Corporate Transactions and Business Law Group, as well as the Emerging & Entrepreneurial Companies Team. Koutnik may be reached at firstname.lastname@example.org or 414-978-5310.
The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.