How Hispanic Small Businesses Are Taking Advantage of Supplier Diversity Programs to Land Contracts
Supplier diversity initiatives can open doors to the private sector as well as federal, state, and local governments if you’re a Hispanic small company owner looking to grow your clientele.
A company’s policy of obtaining a specified percentage of goods and services from firms owned by persons who have been socially and economically disadvantaged is referred to as supplier diversity. Women’s businesses, minorities’ businesses, veterans’ companies, handicapped people’s businesses, and the LGBT community’s enterprises are all included. Supplier diversity initiatives exist in many big enterprises, as well as federal, state, and municipal governments.
Learn how obtaining certification as a minority-owned business might allow Hispanic businesses to deal with these clients.
Supplier Diversity Is Now Accepted as a Positive Business Practice
During the American civil rights struggle, the notion of supplier diversity was developed.
President Richard Nixon established the Minority Business Development Agency in 1969 to help ethnic minority businesses, such as Asians, Blacks, Hispanics, and Native Americans, succeed. In another executive order issued in 1971, he said that the government would set aside monies to support minority-owned enterprises.
Many Fortune 500 firms, as well as federal, state, and municipal government agencies, now actively seek to spend a particular amount of their budgets with businesses owned by people from underrepresented groups. According to Adrienne Trimble, President and CEO of the National Minority Supplier Development Council, which certifies businesses as minority-owned and facilitates connections with the private sector, these supplier diversity programmes aim to give minority-owned businesses “the ability to provide goods, services, and business solutions on a level playing field.” “It’s basically about everyone’s economic inclusion.”
She also claims that it is excellent for business. Working with vendors from various communities gives businesses access to previously unexplored markets. Supplier diversity promotes new customers by funnelling cash into such areas. Trimble argues, “There is a solid commercial argument that encourages supplier diversity and economic inclusion.” “It’s about driving an economic engine throughout our communities,” says the company.
Supplier diversity has “developed so much in the last decade that it’s becoming a two-way street,” adds Carmen Castillo, chair of the US Hispanic Chamber of Commerce and President and CEO of SDI International, a procurement services firm that handles $3.5 billion in business globally. Businesses that have supplier diversity initiatives “want to do business with you as well,” she adds. “They want you to buy their products and services.” “I’m like, if you do business with me, I’ll do business with you.”
Supplier Diversity Programs Provide Access to Major Contracts
The NMSDC, for example, has over 430 business members, all of which have supplier diversity goals. Trimble adds, “If you’re wanting to develop your products or services, and you’re looking for more customers, we have that captive audience.” On a regional and national level, the NMSDC maintains a directory of suppliers and hosts networking events for suppliers and clients.
She explains, “We know that consumers conduct business with companies they know, like, and trust.” Small firms may learn about their clients’ requirements through networking events, “so that when they have the opportunity to market their goods and services… they’re ready.”
Castillo’s firm is accredited as a minority and woman-owned enterprise. She thinks that networking accounts for 80–85 percent of her business, with most of her clients trying to diversify their supply base. She meets her customers at supplier diversity trade exhibitions and conferences, and she advises phoning organisations’ supplier diversity coordinators ahead of time to schedule appointments.
“Without the supplier diversity initiative, I would not be as successful,” she adds. “It provides you with a plethora of opportunities.”
Obtaining Supplier Diversity Program Certification
The NMSDC, which has 23 regional offices around the country, is one option to obtain accredited. Businesses must go through a process of screenings, interviews, and site inspections to be considered if they are at least 51 percent minority-owned, managed, and controlled.
The Hispanic Owned Business certification procedure takes 60–90 days, and prices vary depending on the size of your firm, its location, and other criteria.
Businesses can seek for accreditation under the 8(a) Business Development Program if they wish to deal with the federal government. Supplier diversity is also a goal for many state and municipal governments. The Maryland Department of Transportation and the California Public Utilities Commission, for example, each have their own certification process. City administrations, such as the Los Angeles Department of Public Works or New York City, have similar initiatives.
If you’re a Hispanic company owner, though, you’re unlikely to have received certification. Only 12% of all Hispanic-owned firms were recognised as minority-owned, according to the Stanford Latino Entrepreneurship Initiative’s 2018 State of Latino Entrepreneurship report, which was based on a survey of Hispanic-owned businesses across the United States and Puerto Rico.
