Workplace culture espouses the importance of employee diversity. The same lesson can be applied to supplier diversity. Minority businesses are defined as those operated by African-Americans, Alaskan Natives, American Indians, Asian-Americans, Hispanics or women. Minorities operate more than 8 million businesses in the U.S., and they are the fastest-growing group in the U.S. Demographics. Partnering with a diverse supplier base helps your company reflect and meet the needs of your increasingly diverse clients.
Here are FIVE reasons to establish a diverse supplier base:
1. Tax Incentives
The Minority Business Development Agency (MBDA), part of the U.S. Department of Commerce, provides federal tax incentives to businesses that partner with minority companies. Incentives include tax breaks for using minority companies to procure materials and supplies and reducing tax liabilities for partnering with minority companies that supply labor or services to projects funded with federal or state grants or loans. Many states also encourage the use of women and minority-owned businesses by offering state income tax credits.
2. Competitive Pricing
Most women and minority-owned businesses are small businesses, which means they have low overhead and can offer competitive and lower prices than large chain companies.
3. Client Insight
A diverse supplier base reflects your diverse clients and offers insight into their needs. Diverse suppliers provide a vast cultural knowledge base and unique perspectives to better appeal to new clients and meet their needs.
Supplier diversity sparks creativity and new ideas by leveraging a wide range of talent. It encourages the sharing of ideas, allowing your company to amalgamate their strengths and talents to offer your clients new products, services and solutions.
5. Corporate Responsibility
Promoting supplier diversity tells your clients that your organization believes in lifting up and developing minorities and women. In an age of corporate responsibility, embracing supplier diversity helps attract new clients and employees.
With the ever-changing culture in the workplace, establishing a diverse supplier base is a major key to success. The benefits do not stop at the five listed above. Start partnering with diverse suppliers today to see the full range of benefits it can bring to your company.