Minority-owned business enterprises are crucial to supplier diversity initiatives as well as the overall corporate landscape and the American economy. The opinions of key stakeholders at MBEs are of great interest, so we set out to learn out more about them. And what we learned was truly insightful.
Earlier this year, we surveyed 277 diverse suppliers, a little more than half of whom were MBEs. We accumulated an impressive amount of data, pored through the results, and compiled our findings in our comprehensive 2017 State of Supplier Diversity Report—Diverse Suppliers. Here is just a sampling of our findings:
1. 90 percent of responding MBEs are certified as such.
An impressive 90 percent of the minority-owned business enterprises that responded to our survey said they were officially certified as an MBE by an organization such as the National Minority Supplier Development Council. This trend wasn’t exclusive to MBEs: Across all the diversity categories we surveyed, certification numbers were high. We can arrive at two takeaways from this data. First, certified minority-owned businesses are inherently active in advancing supplier diversity and, therefore, may be more likely to participate in an important survey such as ours. Second, successful MBEs recognize the value of certification to find partners, to network, and to be advocates for supplier diversity.
2. Larger suppliers in our survey tended to be MBEs.
Most of the diverse suppliers—84 percent—who answered our survey fit the classic definition of a small business with fewer than 100 employees (however, not every one of these respondents necessarily identified themselves as a certified small business). Minority-owned businesses comprised a majority of our larger respondents: 8 of the 10 companies with 501-2,000 employees and 3 of the 5 companies with more than 2,001. Interestingly, 44 percent of responding MBEs employed fewer than 10 employees, proving that thriving minority-owned suppliers come in all shapes and sizes.
3. Responding MBEs are well established.
When asked how long they had been in businesses, 81 percent of MBEs said more than four years. Although this was slightly less than the overall percentage (84 percent) and that of WBEs (85 percent), it’s still a significant result, showing that successful minority-owned businesses aren’t flash-in-the-pan organizations but stable, continually growing organizations primed to keep growing.
4. MBEs work with Fortune 1000 companies.
MBEs came in a bit below the overall numbers when we asked respondents what percentage of their business was with Fortune 1000 companies; 46 percent of minority-owned suppliers reported more than a quarter of their business was with this top tier of organizations, compared with 52 percent for all respondents. Just looking at the 51 percent-or-more range, MBEs also came in slightly lower than the overall numbers: 29 percent worked with Fortune 1000 companies compared with the survey average 34 percent. Whether this result is because MBEs aren’t seeking larger partners or that Fortune 1000 companies are less inclined to find MBEs remains to be seen, but it does represent an opportunity for improvement.
5. Two-thirds of responding MBEs go after government projects.
MBEs outperformed the overall results (66 percent to 59 percent) when asked if they actively pursue government entities as clients. The opportunity for government work is there, and minority-owned businesses are driven in trying to secure it.
6. Registration sites are important for finding partners.
We asked respondents to list the top three ways they find corporations to partner with. MBEs mostly followed the overall trends, with one notable exception—57 percent cited registration sites, as opposed to 45 percent for non-MBE respondents. Networking events were the most popular method for MBEs to find partners at 67 percent (and keep in mind, respondents could choose more than one answer), followed by registration sites, RFPs at 48 percent, and emails at 34 percent—which was a noticeable 10 percent less than other, non minority-owned, diverse suppliers.
7. Supplier diversity is important for MBE decision makers—as consumers.
We included this unique question in our survey: “As a consumer, does an organization with a supplier diversity program influence whether or not you will buy from them?” Overall, 84 percent of respondents said they are at least slightly influenced, including 48 percent saying they are strongly influenced. MBEs also came in at 84 percent with one significant difference: 52 percent report being strongly influenced, compared to 43 percent of non-MBEs. Obviously, supplier diversity means much to all diverse suppliers, but perhaps even more to minority-owned businesses.
These findings are only a sampling of what we learned in this report and its companion survey, 2017 State of Supplier Diversity Report—Supplier Diversity Programs. Both reports can be downloaded together h