Should your small business get certified as a woman-owned business? Being certified as woman-owned can have many advantages. The federal government, many big corporations, and many state and local governments have diversity programs that require them to award a certain percentage of their contracts to companies owned by women. Getting certified opens you up to these opportunities.
However, getting certified as a woman-owned business isn’t a piece of cake—it’s a complex process that requires time, dedication and application fees. Here’s what you need to know:
If you want to go after federal contracts, you’ll need to get certified through the Small Business Administration (SBA). The SBA designates two categories: Women-Owned Small Businesses (WOSBs) or Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs). Learn more about the categories and certification process here.
The Women’s Business Enterprise National Council, the National Women Business Owners Corp. and the U.S. Women’s Chamber of Commerce are three nationwide organizations that the SBA has approved as third-party certifiers. Visit their websites to see which types of certifications they offer, the costs and other programs that may benefit you, such as listings in the organizations’ databases of women-owned businesses or access to matchmaking events or trade shows put on by the organizations to help women find contracting opportunities.
While the requirements of certification may vary slightly depending on what type of certification you’re seeking, typically you’ll be required to prove that a woman or women are the majority owner/s of the business (i.e., own 51 percent or more of the company). The woman or women must also be able to show direct involvement in daily operations of the business—in other words, a man can’t give his wife who’s not involved in daily operations 51 percent ownership of the business and then claim it’s women-owned.
If your business is less than a year old, you’ll probably want to wait a while to apply for women-owned business certification. Why? Because you’ll generally need to show a track record of success, including financial statements and prior years’ tax returns. It can be more difficult to get certified if your business is unproven.
Once you decide you’re ready to get certified, be prepared to provide reams of documents, typically including but not limited to:
- Business plans
- Corporate documents
- Business licenses and permits
- Tax returns (possibly including personal tax returns)
- References from key clients and customers
- Bank account information
- Financial statements
Depending on which organization is certifying your business, they may visit your place of business and/or conduct an in-person interview with you, too. After submitting your application, the certification process can take several months—assuming your application documentation are complete.
Once you’re certified, market your business with pride and be sure to emphasize your certification on your website and in your marketing materials—you earned it!
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Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at email@example.com, follow her on Google+ and Twitter.com/Rieva, and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.