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Minority Business Enterprise

A Minority Business Enterprise (MBE) is a for-profit enterprise owned by minorities. A minority is a female or male who is African American, Hispanic, Native American, Native Alaskan, Asian Pacific, or Subcontinent Asian American (East Indian). To be considered an MBE a business is required to have at least 51% ownership by minorities along with control of business operations, management, and experience or expertise related to the product or service offered.

MBE certification is required to validate a business’s status as a Minority Business Enterprise (MBE). Certification is offered through various agencies. In Southern California MBE certification can be acquired through the Southern California Minority Business Development Council (SCMBDC) and further information regarding Minority Business Enterprise and MBE certification can be found on the SCMBDC website.

Why was it created

The Federal government started programs to encourage minority owned businesses during the civil rights movement of the 1960s. The idea was to help Minority Business Enterprise (MBE) businesses with low working capital that targeted and served the minority communities. As a result of this effort, new minority owned enterprises started emerging. The aim is to aid minority business owners face the obstacles of low financial capital, limited access to business networks, low human capital, as well as limited access to other markets.

How it helps the economy and local businesses

Helping Minority Business Enterprise (MBE) businesses can encourage the development of a minority-purchasing program and increase the supplier base. The local economy benefits from increased minority consumption and purchasing as well as the growth of small companies and increased employment.

Useful Information

There are a number of associations that are relevant to Minority Business Enterprise (MBE) owners such as the National Minority Supplier Development Council (NMSDC) that is aimed at creating business opportunities for MBE owners, the Minority Business Enterprise Legal Defense and Education Fund which is a legal representative for MBE businesses and their owners, and various others.

In addition, it is useful to be familiar with some of the certifying agencies such as the NMSDC (mentioned above), the WBENC or Women’s Business Enterprise National Council, and the Southern California Minority Business Development Council (SCMBDC). There are also numerous government agencies to be kept in mind like the Small Business Administration (SBA) , the Minority Business Development Agency (MBDA), and many others.

Minority Business Entrepreneur magazine is a publication aimed at Minority Business Enterprise owners that can provide more useful information regarding the topics discussed above at http://www.mbemag.com/ResourceCenter/Acronyms/

Why should people use MBE businesses

Using Minority Business Enterprise (MBE) businesses not only helps small business owners overcome the disadvantages of lower human and working capital and promotes new business opportunities but can create stronger local economies through increased purchasing power and new employment opportunities.