Diverse suppliers are often encouraged to pursue certification, and there’s a perception that obtaining certification may guarantee access to contracts with corporations. However, while some government supplier-diversity programs assign additional points to certified diverse businesses when evaluating bids, that’s not generally the case for private-sector contracts.

In fact, a recent study found that many certified diverse suppliers surveyed in the Minneapolis–Saint Paul market didn’t believe that being a certified diverse supplier resulted in new corporate contracts. Rather, they identified a key benefit of certification as the diverse business network itself. Some suppliers also noted as a benefit of certification access to programs for skills building.

Given this, and the multiple diverse certifications recognized by different buyer entities, if you meet the definition of a diverse supplier and are considering pursuing certification, it makes sense to carefully assess:

· How diverse certification aligns with your sales strategy,

· Which specific certifications may give you a competitive advantage and

· What benefits accrue with each certification type.

This guide provides an overview of why corporations value diverse supplier certifications, the types and benefits of diverse supplier certifications and the certifications most commonly recognized by private-sector corporations.

Definition of a diverse supplier

Most diverse business certification programs define a diverse supplier as a business that is at least 51% owned, operated and controlled by an individual or group that is part of a traditionally underrepresented group. Common classifications are minority-owned enterprises (MBEs), women-owned enterprises (WBEs), Veteran-owned business enterprises (VOBs), Disabled-owned business enterprises (DoBEs) and LGBTQ+-owned business enterprises (LGBTBEs).

Why corporations value diverse suppliers

Many corporations value diverse suppliers for the following reasons:

• Stronger and more resilient supply chain: By ensuring that they have strong relationships with a variety of suppliers that can provide any given product or solution, corporate buyers increase the resiliency of their supply chain.

• Accelerating economic growth and social equity: By integrating diverse suppliers, corporations can support businesses facing historical challenges, thereby fostering a spirit of innovation and broadening their business community.

• Increasing market share and flexibility: Corporations with robust supplier-diversity programs often see increased market share and flexibility, as well as enhanced competition among suppliers. This not only boosts the company’s performance but also aids in the growth of the economy by supporting small and diverse businesses.

• Insights into a growing customer base: This approach also allows companies to tap into rapidly growing markets, particularly those represented by minority demographics.

Types of diverse supplier certifications

The criteria for diverse supplier certifications vary based on who owns a business and their background. There are diverse supplier certifications available for businesses owned and managed by women, ethnic minorities, veterans, people who identify as LGBTQ+ and people who are disabled, as well as some government certifications for business owners from disadvantaged economic backgrounds.

Please note that there is a difference between certifications provided by government agencies like the Small Business Administration (SBA) and those offered by third-party certifying agencies. Government-issued diverse certifications are used by local, state and federal government agencies, whereas most private-sector corporations predominantly recognize third-party diverse certifications. Common government-issued certifications in the MSP region include CERT, MNUCP, TBG and DBE. This article focuses on these third-party certifications recognized by most corporations.

Benefits of diverse supplier certifications

The five key benefits of acquiring and maintaining diverse supplier certifications include:

• Networking and partnership opportunities: Certification opens doors to many exclusive networking events and trade shows.

• Support, resources and advocacy: Third-party certifying agencies often provide resources, training and guidance on navigating procurement processes, helping suppliers better position themselves for contracts.

• Building trust and credibility: Having certifications adds credibility and shows due diligence.

• Development programs and loans: Some diverse certifications offer unique opportunities to access education, self-development programs and loans at participating corporations.

• Access to supplier-diversity programs and access to RFPs: Many corporations have supplier-diversity programs that prioritize certified diverse-owned businesses for certain types of contracts.

Third-party diverse supplier certifications most widely accepted by corporations

For the most part, the criteria to certify are relatively simple. Most certifying organizations require that an organization be 51% owned, operated and controlled by members of the demographic group for which you’re pursuing certification. Depending on the certification, this 51% could be comprised of members of multiple different demographic groups or solely to one group. Certifying organizations have an application and review process and most require annual renewal. Eligibility criteria and application processes and fees vary by organization.