Supplier diversity is a critical component of an organization’s success. It’s a way for companies to promote innovation, cultivate networking, boost hiring and perhaps most important of all, a way for companies to reap the many benefits of diversity while taking measures to close the racial equity gap. It’s no secret that the past year saw a crucial wave of racial justice and social awareness. Now more than ever, consumers and businesses are prioritizing companies that actively tackle diversity, equity and inclusion.
They seek out diverse suppliers – defined as businesses that are at least 51% owned and operated by under-represented groups – with the aim of tackling racial injustice and supporting minority entrepreneurs.
According to the Billion Dollar Roundtable, 28 Fortune 500 companies spend at least $ 1 billion annually with various vendors. These are some of the top US companies actively looking to spend money with businesses in various groups. What does that mean? Being certified as a diverse supplier is more important than ever.
Certification not only creates new business opportunities with large companies, it also increases access to resources and support. It proves that your business is diverse, stable, and ready to seize new growth opportunities – and it’s a milestone for diverse small business owners looking to grow their business.
To learn more about the opportunities exclusively available to various owned businesses and how the process works, we spoke with Brian Grossman, Wisconsin Segment Manager for Mid-Market Banking and Specialty Industries at JPMorgan Chase Commercial Banking, who provided this useful information about exhibiting and promoting your business.
Why should companies belonging to diverse groups be certified?
Every business is in the realm of relationships. With the right connections, diverse small business owners can develop new ideas, avoid common (and costly) mistakes, and uncover emerging opportunities. Obtaining certification as a company belonging to various groups creates links with other like-minded companies, as well as with hundreds of American companies, representing billions of dollars of supply.
Additionally, diversity certifications serve as proof that your business meets the inclusion program requirements and may be considered for supplier contracts with large companies, such as JPMorgan Chase, which go through formal procurement processes, as well as the federal government. Getting certified is the best way to be considered for these opportunities.
Many private companies devote a percentage of their annual expenses to diversified certified companies, so non-certified companies miss out on potentially lucrative contracts and growth opportunities. For example, over $ 83 billion is spent annually with various providers of the Billion Dollar Roundtable. The federal government has also allocated 16% of its annual budget of $ 400 billion in products and services to various small businesses.
In short: certification opens doors to places where companies belonging to diverse groups have often been excluded in the past.
What are the benefits for minority-owned businesses to obtain certification?
Many opportunities are available exclusively for certified companies belonging to diverse groups. Certification of your business is an investment in your business, like when you apply for a loan. The time spent now collecting documents and meeting people can pay off for years to come.
Some of the most important benefits include:
• Professional opportunities. The best business buying agents look for diverse businesses. By obtaining the certification, companies are entered into a national database where customers regularly go to find companies that can meet their business needs and advance their diversity goals.
• Access to capital. Certification provides companies with additional funding opportunities through banks and venture capital firms. Additionally, many networks have dedicated capital pools for various businesses.
• Significant support. Certification bodies invest in the success of their member companies. They often offer educational sessions, trainings, networking events, and matchmaking programs that can enhance business opportunities for connections and growth.
• Access to supplier diversity programs. Companies are now making a conscious effort to work with vendors that are owned by various owners. Some have created special supplier diversity programs that maintain relationships with other companies belonging to diverse groups, offer information sessions on how the company approaches purchasing, and conduct training sessions.
• Referral opportunities. Networks are powerful because they allow business owners to access hundreds of people they don’t yet know. By entering one of the certification networks, business owners belonging to various owners open up new opportunities through direct relationships, but also through referrals.
As a certified supplier belonging to various groups, you are not only on their list, but potential customers are on yours as well. Business owners can contact the company’s supplier diversity teams directly to ask questions and explore opportunities, and they can reach out to other companies in various groups to explore opportunities for collaboration.
What is the official accreditation process?
There are many ways for your business to become certified as a business belonging to various groups. Each certification is designed for a specific historically under-represented group, so each type of diversity certification has its own requirements.
Typically, supplier diversity certifications are available for businesses that are at least 51% owned and operated by members of historically under-represented groups including ethnic minorities, women, veterans, community members. LGBTQ + and people with disabilities. Supplier diversity certifications are available from many organizations including the National Minority Supplier Development Council, Women’s Business Enterprise National Council, National LGBT Chamber of Commerce, Disability: IN, and National Veteran Business Development Council.
Why do you think minority business owners are reluctant to get certified?
The certification process can take a long time, so some minority business owners delay getting certified. The thoroughness of the process ensures high standards and trust – and ultimately results in businesses belonging to deserving minorities being eligible for significant growth opportunities.
The time invested is well spent. Across all sectors, many companies are making significant investments to meet the needs of Black and Latin communities. For example, as part of JPMorgan Chase’s $ 30 billion pledge to advance racial equity, the company is increasing lending and technical assistance and spending an additional $ 750 million with businesses in black communities and Latin.
What resources does JPMorgan Chase provide to help various companies achieve certification?
JPMorgan Chase Commercial Banking has designated resources to help educate business owners on the revolutionary effect of becoming a certified business owned by various owners.
From general facts about the certification itself to sourcing opportunities, business owners can learn more by accessing this how-to guide or visiting https://www.jpmorgan.com/commercial-banking/insights/benefit-from-diverse-owned-certification.
Sponsored content from JPMorgan Chase & Co.