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Minority Business Ownership Requirements

Minority businesses are those with at least 51 percent ownership by members of historically disadvantaged minority groups. Their numbers are substantial and growing, according to Business News Daily and Oklahoma Small Business Development Centers. Their over 4 million firms conduct over $700 billion annually businesses, and the number of minority businesses increased by 46 percent from 2002 to 2006, compared to 18 percent for other businesses in the same time period.

Minority businesses still lag behind, generating less revenue than other businesses. If you are a minority business owner and your business meets the requirements, you can take advantage of government support to improve your outlook.

The Need to Protect Minority Businesses

Despite their growing numbers, minority businesses are still at a disadvantage compared to non-minority firms. According to David A. Hinson, as quoted in Business News Daily, minority-owned businesses “are still smaller in size and scale compared to non-minority-owned firms.” In 2007, the gross revenues of minority businesses averaged $179,000, while those of non-minority-owned businesses had average revenues of $490,000.

Aid for Your Business: 8(a) Business Development Program

For minority-owned firms, lack of capital is a major barrier to achieving the same success as other firms. This can come from discrimination and societal barriers. The federal government recognizes these inequalities and has put in place certification programs to reduce them.

The 8(a) business development program allows you to receive federal support if you are the owner of a qualifying minority business. Support comes in the form of technical assistance, counseling on business practices, and opportunities to attend workshops. Sponsored by the U.S. Small Business Administration (SBA), the 8(a) business development program can also improve your chances of receiving federal contracts that might otherwise go to larger businesses.

Minority Business Eligibility Requirements

To be eligible to register as a minority business and qualify for the 8(a) business development program, at least 51 percent of your business must be owned by members of certain minority groups.

  • Hispanic Americans
  • Black Americans
  • Native Americans
  • Subcontinent Asian Americans
  • Asian Pacific Americans

Owners who are from other minority groups must demonstrate social disadvantage and harmful effects of this disadvantage, such as discrimination when applying for loans. Businesses owned by American Indians, Native Alaskans, Native Hawaiians or Certified Development Companies, may also qualify under separate requirements.

These are additional eligibility requirements for the 8(a) business development program for minority businesses.

  • Owners must be in control of the business.
  • The business must have documented potential for success.
  • All principals, such as owners, officers, directors, and partners, must meet good character standards, such as lacking business integrity as demonstrated through guilty decisions or settlements out of court.
  • Only small businesses are eligible. Factors affecting size include not only number of employees, but also relationships to other parties and family members.

How to Apply for the 8(a) Business Development Program

Before you begin your application, take some time for preparation. Double-check to make sure that you meet all of the requirements for the program. Remember that you need supporting documents to prove that you meet the requirements.

You can apply online or mail in a hard copy of an application form, which is available on the SBA’s website. The Small Business Adminstration also provides an application checklist and step-by-step guidance for the application process. You can also contact your local district office to get individual help via telephone. These are the steps to applying.

  • Watch the SBA’s online course to determine whether you should apply.
  • Gather your documentation.
  • Get a D-U-N-S identification number online or over the phone.
  • Get an EIN or TIN (employee or tax ID number) from the IRS.
  • Create a business profile with the federal government.
  • Create an account with the 8(a) application program.
  • Fill out and submit your application form.

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Miller & Law P.C. Attorneys at Law
1900 West Littleton Blvd. Littleton, Colorado 80120
Phone: 303-722-6500 Fax: 303-722-9270
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