Minority Certification Contract Arbitrage

A business model leveraging minority business certification status to win contracts, particularly with Fortune 500 companies and government organizations that have diversity quotas to meet.

Key Components:

• Get Certified:

  • Obtain MBE (Minority Business Enterprise) certification
  • Requires documentation like birth certificates to prove minority status
  • Available to minorities in America (including Indian-Americans)

• Contract Opportunities:

  • Fortune 500 companies have diversity quotas to fill
  • Government agencies prioritize minority-owned businesses
  • Companies specifically seek out certified minority-owned businesses for RFPs

• Revenue Model (as described by Magic Johnson example):

  • Win contracts through minority certification status
  • Partner with or outsource work to larger firms (like Deloitte or KPMG)
  • Take approximately 15% of revenue while larger firm handles execution
  • Act as a certified minority-owned front while white-labeling services

• Target Categories for Contracts:

  • Minority-owned businesses
  • LGBTQ-owned businesses
  • Women-owned businesses
  • Veteran-owned businesses

This model essentially creates a business that serves as an intermediary, leveraging certification status to win contracts and then partnering with established firms to fulfill the work.