Grow with Women-Owned Business Certification
Women comprise 51 percent of the US population and 47 percent of the total US labor force. And yet, even with legal protections against gender discrimination and equal opportunity employment, barriers remain. According to the US Labor Bureau’s most recent statistics from the 2010 Census, women earn $.81 cents for every $1 earned by their male counterparts. Some women are responding to this inequality by leaving behind these legacies and establishing themselves as their own boss in the one sector with new opportunities and resources for women: small business. Women-owned business certification is designed to help those bosses grow their businesses and narrow the gender gap in business ownership.
The most recent count by the US Small Business Association shows that women small business owners make up 36 percent of all small business owners. Although 36 percent isn’t quite the 51 percent of all Americans that women represent (or even 47 percent of women in the workforce), it’s evidence of the gains made by women entrepreneurs in a field traditionally dominated by men.
In light of these disparities around ownership, women, and their advocates, have worked to ensure that women-owned small businesses (WOSB) are getting the support they need to compete fairly and succeed. One of the most powerful tools for getting that support has come from a national program of women-owned business certification.
In 1994, despite more and more women becoming business owners, there was still a lack of dedicated funding or contracts for women-owned businesses. At the time, the government had set a goal of awarding five percent of all government contracts to WOSB. That doesn’t sound like much, but, given that the federal contracting budget is now around $400 billion, so five percent, even then, was a hefty chunk of change. To make this policy a reality, the government passed the Federal Acquisition Streamlining Act, which “led to the creation of the Women-Owned Small Business Federal Contract Program in the Equity in Contracting for Women Act of 2000.” For the program to work, there needed to be a process by which women could obtain national women-owned business certification. This would allow the federal government and large corporations the ability to ensure that any funds or contracts earmarked as such were going to actual WOSB. And so, the Small Business Administration’s official WOSB certification and the Women Business Enterprise (WBE) Certification Programs began.
As with anything bureaucratic, the acronyms identifying the different types of women-owned business certification and the granting organizations can get a little Kafka-esque. Essentially, WOSB and WBE represent the same population of businesses, but the WOSB certification is targeted to obtain government contracts. Believe it or not, last year was the first time, ever, that WOSB government contracts surpassed that five percent of federal contracting dollars mandated over 20 years ago. As Maria Contreras-Sweet, Administrator for the U.S. Small Business Administration, put it, “Meeting this goal means five percent is no longer our ceiling but our foundation upon which to build.”
The purpose of both the WOSB and WBE certifications is to validate that the business is at least 51 percent owned, controlled, operated, and managed by one woman or two or more women. Before deciding to apply for one women-owned business certification over the other, or for both, consider the basic requirements of each.
- WBE: Applicant’s owner must be a U.S. citizen (born in the U.S. or naturalized) or permanent resident.
- WOSB: Applicant’s owner must be a U.S. citizen only (born in the U.S. or naturalized).
- WBE: The woman owner must be active in the daily management of the business.
- WOSB: Daily business operations must be controlled by women. “Control” refers to both the long-term management and administration of the business operations. Women must have managerial experience to the extent and complexity needed to run the concern. If a man possesses the required licenses and has an equity interest in the concern, he may be found to control the concern.
- WBE: The woman owner must hold the highest office in the company.
- WOSB: The woman who holds the highest officer position must manage it on a full-time basis and devote all full-time normal working hours of business concerns in the same or similar line of business. She may not engage in outside employment that prevents her from devoting sufficient time and attention to the daily affairs of management and daily business operations.
WOSB Certification can be applied for directly—if somewhat painfully—on the US Small Business Administration site. However, both Women Business Enterprise Certification and WOSB Certification are offered by federally recognized third-party certifiers of women-owned business certification. Among these third-party certifiers, there are two organizations that have come to the forefront in the last two decades: The Women’s Business Enterprise National Council (WBENC) and The National Women Business Owners Corporation (NWBOC).
Although the WOSB certification can be extremely valuable, many women-owned businesses have opted for WBE Certification instead of, or in addition to, the WOSB, because WBE comes with corporate funding and contracts. (Any WOSB can hold both certifications.)
For the sake of clarity, and given that certification costs are lower through the WBENC, because there is no additional charge for the WOSB Certification, we’ll focus on the certification process of the WBENC.
The benefits of WBE certification through the WBENC are fairly standard and center around networking, sponsorship, and grants. But WBE certification’s greatest potential financial return is really in the organization’s broad list of over 1,000 corporate partners looking to work with holders of women-owned businesses certification. Member businesses have “access to a current list of supplier diversity and procurement executives at hundreds of major U.S. corporations and federal, state, and local government entities.” That’s a pretty great package in and of itself for a business willing to put in the time and energy to go after those corporate dollars.
What does it cost?
The NWBOC charges $400 each for both types of women-owned business certification, but $700 if you apply for both at the same. The WBENC charges a certification fee depending on regional area and previous year’s gross revenues (likely between $350 and $550), and subsequently offers the WOSB Certification at no additional cost. This is big plus for businesses looking to go after not just corporate funds and contracts, but Federal and State contracts as well.
How do I apply?
Applicants interested in pursuing their WBE and/or WOSB Certification through the WBENC can do so through a Regional Affiliate. Given that the certification process requires a site visit, much like LGBT Business Certification, WBENC partners with affiliates, which are also women- owned business organizations, to help applicants through the process. Because there are so many affiliates and each affiliate’s process will be slightly different, we’ll focus on one of the larger ones, Astra Women’s Business Alliance, which covers Northern California and the Pacific Northwest.
Astra makes the entire certification process clear and comprehensible with a terrific set of FAQs. Astra recommends that any woman-owned business review whether certification is appropriate for their business, but for those ready to take a deeper look at the process, Astra provides this basic guide on what to expect:
- A business entity submits an application, along with the necessary supporting documentation, notarized sworn affidavit, and non-refundable processing fee.
- The Astra staff does the intake and reviews all documents to make sure all of the pertinent, required documents have been received. After the staff has determined the file is complete, they return the application file to one of the Astra Certification Review Committees, which meet on a monthly basis. The Astra Certification Committees are made up of volunteers trained by WBENC and are Certified WBEs, Corporate and Agency, who care about the empowerment of more women-business owners.
- An on-site visit is conducted at a predetermined time with the majority woman business owner.
- At a subsequent Certification Review Committee meeting, a final determination is made regarding the applicant’s eligibility.
- If certification is granted, the company’s owner will receive an automated email notification that she has been certified and may now access her certificate online.
- A formal letter is mailed to the owner if certification is denied.
Though this guide is specific to Astra, it is similar to what any applicant in any region can expect.
Making the Most of Your Women-Owned Business Certification
Congratulations on your certification(s)! In order to truly benefit from these certifications, you’ll need to make sure folks know about them. Inc. Magazine offered some suggestions about publicizing your new status in the right places. Get in touch with “local, state, and national certification agencies and ask to get put on their mailing list,” because companies and government agencies often send email blasts of requests for proposals through organizations like NWBOC and WBENC.
Like any part of your business, success will come from diligence and follow-through. Certification is another stage in your company’s growth and in the growing success of women-owned businesses in the United States.