Why Minority-Owned Businesses Should Consider Government Contracting Opportunities Sooner Rather Than Later A look into the opportunities available for minority-owned businesses to engage with state and local governments.
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There has never been a better time in recent history for minority-owned businesses to seek government contracting opportunities than now. To put this into its proper context, we must first understand that federal, state and local governments have laws and provisions in place that requires agencies and departments to allocate a portion of their budgets to minority-owned businesses.
But what defines a minority-owned business? According to the Small Business Administration, a minority-owned business is classified as a business that is owned by individuals that are a part of a "disadvantaged community".
Laws and provisions to provide better access to opportunities for minority-owned businesses have been on the books for decades. However, in practice, the access to opportunities were not always as readily available or apparent as they might seem, especially when it came to government contracting. High-cost barriers to entry (ex. hiring the right consultants and legal advisors to assist the business) made it difficult for most minority businesses to gain access to opportunities due to the lack of adequate capital resources available to them and the difficulty they have had in securing credit facilities from financial institutions at market rates.
Thankfully, the sociological dynamics has shifted dramatically since the times that these laws, policies and provisions were initially brought to fruition. In today's climate, governments from the federal level to the local level are more interested and motivated than ever to assist minority-owned businesses in successfully gaining access to contracting opportunities with them. Large, institutional shareholders across the board have been demanding better, more robust, actionable Diversity Equity and Inclusion (DEI) methodologies that produce tangible results. Companies who did not take these demands seriously paid the price by way of their share prices plummeting in the wake of large shareholder divestitures.
The demonstration of large shareholders to exit companies that were not implementing strong DEI methodologies forced companies to take notice, pivot and adapt to the change in investor sentiment. Not only do shareholders require the company to have a strong DEI methodology in place, but they require that the company hold its supply chain, major business association and affiliations to the same standards. In order for politicians to continue to enjoy the generous contributions of corporations, they had to develop even more robust programs and initiatives at the federal, state, and local levels to ensure that not only were the opportunities available, but that access was attainable for the average minority business.
Related: 3 Ways to Support Minority-Owned Businesses
Colorado: an example
A great example of how governments have rolled out the red carpet for minority businesses in the contracting space is Colorado. I spoke extensively with Wael Khalifa, who is currently a special aide to the mayor of Denver. In his capacities within the government of Colorado, he has worked extensively on Colorado's DEI framework and implementation.
Wael shared with me that Colorado's Minority Business Office (MBO) provides free one-on-one consulting services as well as an online learning platform to help minority business owners understand and attain the different types of certifications available to them. For minority contractors, the office even educates them on the process of selecting, writing and submitting bid proposals to the state. The MBO also has an advisory council which is designed to provide a forum for which the perspectives of minority business owners can be brought to the attention of the state. In addition, the MBO also maintains a comprehensive database of all minority businesses that are certified as such with the state.
Related: The Government Wants You to Become an Entrepreneur
The state of Colorado also hosts the Advance Colorado Procurement Expo, which is a day-long event designed for businesses to showcase their products and services to state and local governments, attend workshops and network. Finally, in 2020, the state legislature passed SB20B-001 - COVID-19 Relief Small And Minority Businesses Arts Organizations in which the Colorado legislature allocated an additional $4 million to the MBO to provide direct relief payments, grants, loans, technical assistance and consulting support to minority-owned business.
Colorado is just one example of how states are strongly encouraging engagement with minority-owned businesses through legislation, regulation, guidance and funding to provide measurable access to opportunity at an unprecedented level as a part of their deepening DEI initiatives. Because many states are currently doing similar things to support minority businesses, the possibilities and opportunities for minority-owned businesses are limitless.
Related: These City Programs Are Giving Minority- and Women-Owned Businesses Access to Capital
