Are you a women-owned small business? If your answer was yes, then you may find some comfort in knowing that you’re not alone. There are nearly 6.5 million women-owned businesses generating more than $940 billion in revenue, up 15% from 1997, according to a U.S. Census 2009 report. Making the decision to undergo a women-owned certification process and compete for larger contracts can be a business altering choice that has its pluses and minuses.
Certifying a business as women- or minority-owned can provide many opportunities for a small business. While gaining certification can open doors to national suppliers and government procurement agents, it can also unlock large U.S. corporate contracts that would otherwise not have been available to smaller companies. Additionally, certification allows the business to join a network and limited pool of qualified organizations that are competing for larger contracts and non-commercial prospects.
The opportunities abound. Many government contracts are written to include a partial allocation of the contract to women or minority-owned companies or businesses and the competition for these segments is far less than on the open market. However, the myriad of paperwork and administrative hoop-jumping can overwhelm small business owners leaving them frustrated and ready to walk away from the process. Is the process worth the headaches? Check out the outline below and see if certification may be in your organization’s future.
Know that the process to apply for and obtain certification is not an easy one. A quick outline of the requirements includes:
- Being woman owned and led. The business owner must be female and hold at least a 51% interest in the company.
- The woman owner must be active in the daily running of the business. This area is critical to passing certification. Demonstrate active involvement by providing documentation on hiring, firing, and daily operational duties. You’ll want to show your impact on all aspects of the business’ operation.
- To qualify for certification, a woman-owner must be a U.S. citizen and in business for a minimum of six months, although several years is far more attractive for the application.
Once your business has comfortably met these first three requirements, you’re in a good position to begin the certification process. Bear in mind that this is a process that can take several months to a year to complete and qualify. If you think you will be heading toward certification in the future, it is good practice to begin collecting the necessary documentation as you go. Store all of the documents in a central location and keep a checklist to keep track of the documentation you have already obtained and the steps you have already taken. The checklist will also give you a good picture of the remaining requirements to be completed for certification. As a back-up, make a duplicate set of documents and store one set off site.
If you’re still questioning if certification is right for your small business, the Women’s Business Enterprise National Council (WBENC) offers articles, checklists and even an ‘Is Certification Right for Me?’ quiz that business owners can complete for additional guidance.
The SBA has an established goal of awarding government contracts to 5% of women-owned businesses and 23% overall for small businesses,” says Janet Christy, President of Leverage & Development, LLC, an organization that works with women- and minority-owned businesses to help them prepare for landing and working government contracts. Because that number is so small and qualifying can be a lengthy and difficult process, many government contracts trickle down through the winning bidder to their tier-one and two suppliers, who are more likely to be women or minority owned. The winning bidder is often required to ‘make a good faith effort’ to seek out non-certified, 8(a) classified vendors as part of their contracted work.
Just as there are many ways to gain business, there are numerous outlets for gaining certification and stepping into government and large-scale corporation contracts. Below are just a few of the primary routes your small business can take.
Women Business Enterprise Certification (WBE) – This is a national certification presented by the Women’s Business Enterprise National Council (WBENC). The application process is very involved - asking for all records on the business including proof that the women owner’s share of the business’s ownership and control is 51% or greater. There is a $300 application fee and must include financial statements, copies of all equipment rental or purchase agreements, real estate leases, bank signature authorization card, payroll and other additional documentation. A full listing of required documentation can also be found on the WBENC web site.
HUB-Zone-Historically Underutilized Business 8(a) program, affectionately called the HUBZone program because of the geographic location where the businesses are primarily located. This program serves disadvantaged and economically challenged communities and can vary from state to state. Check with your state’s department of Minority Business Development or the Small Business Administration for more specific details. Qualification under this category can often lead to a pipeline of contracting opportunities. Interested businesses must apply via the SBA web site.
Additionally, businesses owners can obtain certification through state and local agencies. Consider the type and level of certification that the business needs to reach its goals before beginning the process. If you are only looking to expand your business to local health care organizations, then obtaining national certification may be more costly and involved for the business’ immediate needs.
There are plenty more resources available if certification and potential government contracts are an attractive option for your business.
WomenBiz.gov – This is the hub for navigating government contracts and federal procurement. The site can assist women-business owners with steps required in order to compete in the government contract process including how to start the business, what forms and certifications are necessary and even bidding on a contract.
Registration of the business is an in-depth process requiring several steps:
- Obtain the Federal Supply Class or Service code or the North American Industry Classification System (NAICS) codes for your business’ specific product or services. Once you have done this, you’ll need to apply for a DUNS number from Dun and Bradstreet.
- Next, register the business with the Central Contractor Registration. This is the primary registrant database for the U.S. Federal Government. Note that you can also apply for a DUNS number via this site as well. Once registered, you can input your business’ information including capabilities, background information and product or services available. Contractors, government agencies and the general public can then search for your business using this database.
Business On-line Representations and Certifications (ORCA) – if you are planning on selling or contracting with a Department of Defense agency, you must also register with a new online registry called ORCA. Previously, vendors had to submit to the older Representations and Certifications process in order to participate in large purchase contracts and awards. Now, using ORCA, a contractor can enter their information one time for use on all federal contracts.
- Gather the required legal and financial documentation. This is also dependent on the business entity. Lists for these requirements are available on the certifying agency’s web sites.
Federal Business Opportunities (FBO) (www.fbo.gov) – is a web site where contractors can research historical opportunities. Also check the Department of Defense’s Defense Logistics Agency called the Procurement Technical Assistance Program. According to the program’s web page, “PTA centers are a local resource available at no or nominal cost that can provide assistance to business firms in marketing products and services to the federal, state and local governments.”
SBA Office of Women’s Business Ownership Entrepreneurial Development – If certification isn’t in your immediate future, don’t feel that your business is missing an opportunity. Often times, government contractors are required to include women- and minority-owned subcontractors as part of their contract requirements. By networking with these contractors, you may find subcontract work. The fruit of this tree is sweet because as a subcontractor, the women- or minority-owned business is NOT required to obtain certification. Going this route, you may be able to gain valuable contacts, government work experience and the time necessary to meet the stringent qualifications of full certification.
The success of your women- or minority-owned business depends on more than just certification. Keeping accurate financial records and organized documentation will help streamline and expedite the process. To learn more about opportunities and certifications for your women - or minority-owned business, talk with a Fiducial Advisor by calling 866-Fiducial or visit the web site at www.Fiducial.com.