You may have heard the term ‘supplier diversity’ and the benefits it can bring to your small business or corporation. If you’re interested in what supplier diversity is, where its headed and how it can grow your business, here is what you should know:
What is supplier diversity?
Supplier diversity refers to the use of veteran and minority-owned businesses as suppliers. A supplier diversity program is a proactive business program that encourages use within an organization’s supply chain. Supplier diversity most often refers to the partnership between larger scale businesses and businesses owned by underrepresented minority-, women-, veteran-, disability- and LGBTQ+-owned businesses.
How does this partnership benefit the supplier?
As a small business owner, teaming up with a larger scale business not only guarantees a dependable client, but also gives you access to the experience and insight of a corporate company. A supplier diversity partnership can provide networking and mentorship opportunities, access to a wider clientele and even increase your opportunities to bid and receive larger business contracts. In short, suppliers are able to scale their knowledge, outreach and funds while in a supplier diversity partnership.
How does this partnership benefit the supplied?
Companies who put veterans and diversity and inclusion at the forefront of their plans have proven to be more successful than those that don’t. Supporting a diverse workplace not only increases morale, but allows for a wider flow of ideas and access to a larger and more diverse client base. In turn, these factors often increase a company’s revenue.
Inviting a supplier team to your business will support your company’s veteran and diversity initiatives, widen your business lens, increase opportunities for new products and further audience reach. This will, in turn, bring in more revenue for the supplied business. Utilizing small businesses can also foster new jobs and a higher tax revenue.
How can I become a diverse supplier?
The best way to enter a supplier diversity partnership as a supplier is through a certification agency. You can be officially certified as a veteran or minority business owner and once you are given the official status, you will gain access to partnership opportunities for your business. Certifications can also help grow your business by providing scholarship and funding opportunities, media coverage, mentorship and networking opportunities, educational resources and more.
Do I need to become certified to be a diverse supplier?
Not necessarily, however most companies require or even prefer to work with small businesses that have been officially certified through a third-party agency, such as SBA/Veterans website the National Minority Supplier Diversity Council (NMSDC), Disability:IN, the Women’s Business Enterprise National Council (WBENC) or other applicable organizations. This certification announces to potential partners that your business has been vetted and deemed legitimate and reliable by a trusted, professional certifying agency.
How do I become certified?
Every organization will have different qualifications for certification, but many of them will have some of the same requirements. For example, Disability:IN, which works to certify disability-owned businesses, requires the following:
- Documentation supporting at least a 51% ownership and management of a business by a person or group with a disability.
- Proof of citizenship or permanent resident status.
- Disability status documentation.
- Your business license or permit.
- Tax forms and return documents.
- Resume of business owners.
- A history of your business and business plan.
The Future of Supplier Diversity
According to Forbes, supplier diversity programs “close disparities for diverse-owned businesses and grow the economy.” In a recent article, they explored PwC’s findings that “83% of consumers and 86% of employees believe that companies should actively shape [environmental, social and governance] best practices and prefer to support or work with those who share their values.” Supplier diversity programs spur wider participation in the procurement process, an improvement in the quality of products and keep costs competitive.
Supplier diversity partnerships not only encourage inclusion in the business world, but support small businesses, provide a boost to the economy and extend business opportunities for everyone involved. Whether you’re a big corporation or a small business, a supplier diversity partnership may be the perfect solution to help your business thrive.
Read more articles for the veteran community here.
