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.
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.
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.