Can Certification Help Grow Your Business?
With the federal government spending over $200 billion annually on contracts for goods and services and corporations outsourcing work to smaller companies, many micro-businesses want to tap into this market as a supplier. If bidding on corporate or government contracts is part of your strategy to grow your business, the key to getting the contract as a female entrepreneur could be to certify your business as woman-owned. Below are some tips on knowing if certification can help your business, and where to go for help during the process.
Why Certify?
Why Not Certify?
Resources to Help
Why Certify?
In 1994, the Federal Acquisition Streamlining Act (FASA) was established, setting a goal for Federal agencies to award at least 5% of all prime and subcontract dollars to women-owned small businesses. Despite continued growth in the number and economic impact of women-owned firms, the 5 percent goal has never been achieved on a government-wide basis.
Likewise, most Fortune 500 companies have supplier diversity programs for women, minorities, veteran, or other “disadvantaged” businesses. These programs are either mandated by a local government entity or corporate headquarters, or are done for “good neighbor” reasons to diversify their contractors. If companies have a supplier program, generally 2-5 percent of purchasing is earmarked to go to women-owned businesses.
If a business is “certified” as a women owned business, then government agencies and corporations can claim that contract towards the awards quota. The government does not require certification, although it can help in the contract bidding process, and most private corporations do require it. In addition, business certification often opens avenues to databases of procurement opportunities that a non-certified business would not know about.
Why Not Certify?
Two main issues that stop women businesses from either becoming certified as a women business owner or bidding on contracts are the complexity of the process and cost. Receiving government certification as a women business owner does not have a fee, but the cost to the small business in time away from running the business, as well as finding all of the paperwork needed, is great. It generally takes two or three months at a minimum to apply as a woman business owner. In addition, not all certification programs are transferable. While someone may get certified as a woman owned business with their city government, that certification may not be accepted by the state or federal governments, who have their own program.
Likewise, corporations usually require a different certification process from the federal government. Only a few major organizations help women with corporate certification, and their fees for doing so range in the hundreds, plus yearly membership dues.
It is important before starting the certification process to consider whether your business is the right fit to bid for contracts to the federal government or corporations. Do you have a service or product that they would be interested in, and can your business handle the demand if your bid is accepted?
Resources to Help
Government Certification
Two of the most popular federal government certification programs are the U.S. Small Business Administration’s 8(a) Program, or the Small Business Administration’s Small Disadvantaged Business Program. 8(a) is the best known contracting certification program, and includes set-aside contracts reserved solely for 8(a) applicants. The SDB program has an easier certification process, but there are no set-aside contracts or development programs like with 8(a).
The government Web site http://www.womenbiz.gov/ offers an array of information about selling to the federal government, including help in determining if your business would be a good match. Information about the Small Business Administration certification programs can be found at http://www.sba.gov/8abd/.
Corporate Certification
Women’s Business Enterprise National Council
The Women’s Business Enterprise National Council (WBENC) is one organization that helps women become certified for corporate contracts, and offers networking and workshop opportunities across the country.
NASE Member Kate Chrisman is also the executive director of the Gulf Coast WBENC affiliate office, helping women businesses from Louisiana, Mississippi and the Panhandle of Florida. She considers certification a “marketing tool to have under your belt,” and “a way to get your name out there” when dealing with larger corporations. Certification from an organization like WBENC gives a woman-owned business clout, a highlight on your name, and credibility, Kate says.
WBENC certification requires 51% ownership in a business by a woman, taking into account operation, control, governance, and maintenance. Kate says they look for an affirmative answer to the question “if the male partner – if there is one – is taken away tomorrow, can you still run the business by yourself?” The application fee ranges from approximately $300 - $350, then approximately $200 - $250 annually to renew the certification, maintain a presence in the WBENC database and have access to local programs.
National Women’s Business Owners Corporation
The National Women’s Business Owners Corporation offers a similar service to WBENC, and has an affiliation with the National Association of Women Business Owners. Over 100 corporations accept NWBOC, as well as some state and local public agencies.
NWBOC also requires 51% ownership for certification, with a $300 application fee.
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