Who is eligible to become certified as a minority owned business?

Minority business certifications exist to right a wrong. South Carolina’s state procurement law created this certification to provide a means to establish that a small business is owned and operated by a person (or persons) who is socially and economically disadvantaged. Historically, some small businesses may have experienced difficulty in competing for state contracts simply because the owner was a minority (and/or female.)

In order to be certified in South Carolina as a minority (including woman) owned business, the ownership of the company must be controlled and operated by a socially and economically disadvantaged individual(s).

It is important to note that mere ownership does not necessarily qualify a business for certification; rather, the certification process requires that there be some evidence of economic disadvantage resulting from the business being owned by a minority and/or woman. This economic disadvantage must be clear and demonstrable.

For example,

• a company might have had difficulty getting information about business opportunities and notices of contracts,
• the company may have been made to accept unfair/unusual requirements such as excessive performance bonds or above average holdbacks;
• the company and/or its owner may have experienced unequal access to credit or capital, or received credit only on unfavorable terms not typical in the industry.
• the minority (including woman) owner might have been denied membership in professional and social organizations that would limit the development of contacts and business opportunities.

Companies interested in minority certification should consider what advantage it will provide. For example, have they lost new business to a competitor that is certified, have they lost existing contracts because they aren’t certified as minority owned, or are there opportunities that are only available to a certified company? If a company is simply seeking to be more competitive in bidding for contracts, the state minority certification is not going to be of help.

As the owner of a company thinking about seeking minority business certification, you should ask yourself whether your company is having difficulty getting and keeping contracts because you are a minority and/or woman. To be certified by the state, you will have to offer clear evidence and documentation that this is the case.