Women Entrepreneurs and Woman Owned Business Certification
In the United States, more than 12.3 million businesses are owned by women, employing over 9 million people and generating $1.8 trillion in annual revenue. Women started new businesses at the rate of 1,821 per day between 2017 and 2018. With plenty of competition from other businesses, female business owners may want to consider certification as a woman-owned business. Certification can help a woman-owned business increase their visibility, provide networking opportunities and new create new business possibilities.
What is certification?
There are two types of woman-owned business certifications. The Women-Owned Small Business (WOSB) or Economically Disadvantaged Women-Owned Small Business (EDWOSB) certification is considered by federal government agencies when seeking to work with women-owned companies. In fact, the federal government has a statutory goal of awarding 5% of eligible prime contracting dollars to women-owned small businesses. If your business is pursuing private sector, nonprofit or state or local government work, you may consider the Women’s Business Enterprise (WBE) certification. In addition, several state and local agencies offer certification programs.
In general, women-owned businesses are required to be for-profit entities with at least 51% of the business controlled by women who are U.S. citizens. A woman must manage the day-to-day operations, must hold the highest officer position in the business and work at the business full-time. A woman and a man can own the company jointly, but the woman must be the majority owner and demonstrate her management and control of the company.
Benefits of certification
While certification doesn’t guarantee anything for a women-owned business, it can provide potential advantages when pursuing business opportunities and government contracts.
- Federal government agencies are required by law to meet goals for giving a certain percentage of their contracts to WOSBs or EDWOSBs. In industries where women have historically been underrepresented, some federal agencies even set aside a certain percentage of their contracts for WOSBs or EDWOSBs.
- State and local governments, nonprofit and private sector businesses often have similar quotas to meet. Certification can help your small business get in the door to compete with larger companies for contracts.
- Large companies and government agencies will send out a request for proposal to submit business proposals and contracts through the WBE. Certified companies then receive a notice about upcoming project opportunities. Many companies, such as Target and Starbucks, have specific initiatives to work with WBE-certified companies.
- If you already work with corporate or government clients, certification as a woman-owned business could open up even more opportunities within those companies.
It is possible to self-certify your business as a WOSB or EDWOSB through the SBA. Simply register with the System for Award Management (SAM.gov), visit Certify.SBA.gov and provide all requested documents. However, The National Defense Authorization Act for Fiscal Year 2016 eliminated the self-certification process and the Small Business Association (SBA) still has not yet decided how it will implement the change. So while you can still self-certify for now, eventually it will not be an option.
There are third-party organizations authorized to provide WOSB and EDWOSB certification, and all of them can also certify your company as a WBE.
- Women’s Business Enterprise National Council
- National Women Business Owners Corporation
- US Women’s Chamber of Commerce
Certification isn’t guaranteed, and can be an involved process, but one that can have significant payoff in the long run. Consider your type of business and potential customers as you investigate the type of certification that might make sense for your organization. Once certification is obtained, it can open new avenues of business and be an incredible marketing tool for a woman-owned business.