What does it mean to be a diverse-owned, certified business and what are the benefits that come with the designation?
We spoke to Steve Garibell, Vice President of Community Business Development at TD Bank, to find out exactly what being certified does for a diverse-owned business and how it can help a young company grow.
"You can be invited to the party, but being a certified business gets you the seat at the table," Steve explained.
Steve says that everyone, even businesses not certified, are invited to apply for lucrative contracts, but having this designation levels the playing field.
"It doesn't give you any preferential treatment, but it helps you get in the door," he added. "There are federal contracts, state contracts, municipal contracts, Fortune 500 contracts and much more to consider."
A certification helps put you on a list of diverse suppliers and gets your business into a supplier pool.
Also, and possibly just as important as the contracts, a certification gives you a group of business owners that you can count on, collaborate with and ask advice from.
"I look at the Women's Business Enterprise National Council (WBENC), which is the organization that certifies women-owned businesses, and they support each other in so many ways," Steve said. "It helps you also identify people to do contracts with that may be too large for your small business alone. Essentially, you can go in on a contract together. I'd rather have 50% of a million dollars than 0% of a billion dollars."
Opening new doors to success
If you can possess one of the many certifications, whether it's for companies led by women, members of the LGBTQ+ community, veterans, or people with diverse abilities, it just opens so many doors and possibilities.
For example, if you want to be an LGBTBE certified business (LGBT Business Enterprise), you'd apply through The National LGBT Chamber of Commerce (NGLCC).
You can apply through the organization's website and the NGLCC is very upfront about the numerous benefits.
"Certified LGBTBE® companies have access to hundreds of corporate representative and supplier diversity professional contacts," the website states. "Through these contacts, companies can begin building strategic relationships and making preparations to meet face-to-face with them at NGLCC matchmaking and networking events, which are held across the country throughout the year."
It's those networking events that foster real business relationships, Steve said.
"It's amazing to connect like-minded small business owners and see them help each other grow together," he said.
How to become certified and what to know
Now, it's different for different certifications, but there are usually some common requirements.
You have to show that you are 51% owned and operated. The operated piece is important. You can't just be a figurehead.
You need an approved and thorough operating agreement, making sure you have the outright ability to make decisions and do the day-to-day operating for your company.
You'll want to have an attorney on hand to guide you and your business on creating bylaws to compliment the operating agreement. All of those are things that come into play as you're getting certified.
Steve notes that a huge thing to keep in mind that all contracts are not created equal.
"Not every contract is profitable," he said. "Sometimes if you're dealing with municipalities, they're going to the lowest bidder. That doesn't always mean it's a contract you need. If the contract isn't going to be profitable, it's okay to pass."
Money isn't the only thing to consider.
"A lot of these organizations that certify businesses have classes on how to negotiate a contract, how to make sure your contract's profitable, how to fund a contract, and how to write your capability statement, which is like a resume for your business on how you can execute the contract," he says.
There's also tiers to contracts.
"Depending on the size of the contract, tier one contracts can go to billion-dollar companies like Dell and IBM," Steve explained. "Some tier one contracts have performance metrics written in that require the tier one supplier to use a certain percentage of Diverse tier two suppliers as sub contractors to complete the work."
Tier two contracts are where small businesses can really make their mark, Steve says. Tier two contracts also include tier one companies that subcontract work to include diverse suppliers.
"For example, at TD, the smaller marketing companies really can't handle campaigns our size regularly," Steve explained. "But when we do a Pride campaign or a Black History Month campaign, there's no reason why our main agency can't hire one of these smaller, diverse-led organizations that are thought leaders in that area to help build out those campaigns."
Applying to contracts once certified and getting multiple certifications
A top tip from Steve is to make sure you have all your documents in a folder on your computer, so that when you bid on a contract, all the operating documents are there.
"Everything I would need to send out to bid on a contract is in one folder, it's good to go," Steve says. "It can be a full-time job. These contracts don't just fall in your lap."
Steve compares it to personally applying for a job, given the time it can take to get a contract, the effort that goes into it and how many contracts you simply won't hear back on.
In addition to his work at TD, Steve is also a business owner certified through the NGLCC and as a Small Business Enterprise (SBE) for the state of New Jersey, where he has worked alongside and collaborated with the organizations for years, adding value to its members with his expert advice, but also seeing the value the Chamber gives its members.
And being certified through the Chamber, Steve was able to connect and work with immense resources that help him get his businesses off the ground.
Steve closed with another story about a small business owner he knows who was already certified as a female-led business for years, but eventually decided to get multi-certified.
After being a certified female supplier in one organization's supplier pool, that company pared down their supplier pool and she was no longer on their Diverse Supplier list.
Steve helped her obtain her LGBTBE certification, so that she was able to reconnect with her community and collaborate with talented, driven small business owners like herself.
"The supplier list eventually took her back because she was now an LGBTBE certified business along with being a female-owned business," Steve explained.