Supplier diversity is a proactive business development program which encourages the use of historically underutilized businesses, such as minority-owned, women-owned, veteran-owned, LGBT-owned, and small businesses. It is when companies intentionally diversify their supply chain by purchasing from these businesses.
There are numerous benefits to collaborating with a certified diverse supplier. More than 350,000 U.S. companies have adopted a supplier diversity program. They actively seek to work with companies that support women-owned businesses.
Research shows that companies who embrace diversity are more profitable. According to the Hackett Group, companies with a diverse supplier program generate more than 130% greater return than companies that do not embrace diversity in its business suppliers. Along with these diverse supplier programs, many companies are mandating that as much as 25% of their purchases are allocated to Women’s Business Enterprises.
Why are so many corporations adopting policies that require partnership with diverse suppliers and women-owned businesses? The biggest benefit to doing business with a diverse supplier is the tax incentives. The federal government provides a tax incentive for companies that utilize minority and women-owned businesses as suppliers. There is also a second tax incentive that reduces tax liabilities for companies that use minority and women-owned businesses that supply labor or services to a project funded with federal or state grants or loans. In some states, a State tax incentive may also be available.
There are many other reasons a company might choose to implement a supplier diversity program. A few reasons include:
- New products, services and solutions not provided by larger corporations
- Provides multiple channels from which to procure goods and services
- Drives competition (on price and service levels) between the company’s existing and potential vendors
- Displays an organization’s commitment to doing business, beyond consumerism, in diverse markets
- Showcases the company’s interest in and commitment to economic growth in their community
Businesses generate more sales, have stronger partnerships and save money when they conduct business with a diverse supplier. As small businesses grow, so will our nation’s economy. Since most diverse businesses are small businesses, they aid in the economic recovery and sustainability of their communities. Women-owned businesses are one of the fastest growing sectors of the American economy and a key force behind job growth and job creation. 65% of new jobs in the last 20 years were created by small businesses that identify as diverse suppliers.
Safety Pros is a women-owned business enterprise federally certified by the Women’s Business Enterprise National Council (WBENC). The WBENC is one of the largest supporters of women-owned businesses and promote that American companies should consider using women-owned businesses as a supplier. WBENC provides certification to women-owned businesses all over the country.
We are honored to display our certificate and proudly state that women are at the forefront of our company.