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Women Owned Business Certification

Updated on December 20, 2012
Gaining a woman owned business certification could help with corporate purchasing and government procurement opportunities.
Gaining a woman owned business certification could help with corporate purchasing and government procurement opportunities.

There are advantages for a women-owned business when it comes to leveraging diversity programs. Those advantages are continually growing as more purchasing departments are looking to support diversity purchasing. Getting women owned business certifications is a good start and it is relatively easy compared to many other certifications.

Federal Contracts

Federal procurement and contracting is a hard nut to crack, but the rewards can be well worth it. The federal government is the largest purchaser of goods and services in the world. Fortunately, US federal procurement does what it can to purchase from small business. It even has a mandate to do a certain percentage of its purchasing with small businesses and another to do certain amounts with small disadvantaged business (SDB) including women-owned.

To get assistance in the purchasing system a business can apply for and receive certification for their small and disadvantaged business. Purchasing personnel can then seek vendors who hold these designations to meet quota. Fortunately, there is no official procedure for women-owned business certification, so such a business can self-certify as being woman-owned for the purposes of federal procurement.

However, the good news does not stop there. One of the most sought after designations is 8(a) status. SBA 8(a) certifies a business as being economically and socially disadvantaged. The economic disadvantaged is proven by the annual sales of a business and the net worth of the owner(s). The socially disadvantaged portion can be pre-qualified if the owner(s) is a member of a pre-determined set of ethnic minorities. But if one is not a member of a listed ethnic minority that does not preclude them from getting 8(a) certification. Simply, the owners need to prove that they are "socially disadvantaged." Many have used gender as a basis for getting 8(a) status. Proving socially disadvantaged status should be easy if the business is in a traditionally male dominate industry say construction or trucking. May be harder if it is in a female-centric business. However, pointing out the disadvantages from supporting industries (like lack of capital from banks) could help one's case.

Looking at other certifications that a business may be qualified for like HubZone would help on the procurement front. This would mean a woman's business would start with at least women owned business certification and ultimately SBA 8(a) certification. In between the two extremes a business can add on other designations that would help a business achieve federal contracts like HUBZone.

State and Local Governments

Purchasing can also be acquired from state, county, and local governments. Many larger government-purchasing departments have diversity purchasing efforts. Meaning that a business can qualify as a small and minority owned business. This is where the term MWDBE comes into play. MWDBE stands for minority women disadvantaged business enterprise. Having women owned business certification makes a business a MWDBE. Working local governments are a hodge podge of business certification, but if a business will work potential government customers one by one it should be easy to untangle. Some governments will accept certain certifications, have reciprocal agreements, or have their own certifications. Most will somehow accept federal status, another reason to become an 8(a) company.

It becomes a matter of seeing what purchasing departments buy what a person's business is selling.

Corporate Purchasing

Large corporations have corporate diversity departments. They typically serve two functions- to increase the diversity of the corporation's workforce and to increase the vendor base for the purchasing department. The latter is good for community relations. The opportunity for a woman-owned business is that the diversity department is a point of contact for the purchasing department. This helps a business have a head start in approaching what could be a cold, large business. Also, many diversity departments have personnel that attend tradeshows and business networking events making it easier to get an "inside man".

Rarely, will a corporation have its own certification process. It will usually rely on outside certifications or accept self-certifications. It will be important to tout women owned business certification so that the buyers will know a business is woman owned. Otherwise, a buyer would simply consider a business one among many and not give a woman owned business the leverage it deserves.

WBENC

Although women owned business certification is quite disorganized, there is an independent body that certifies businesses. The Women's Business Enterprise National Council (WBENC) will process a business and certify that it is women's owned. This is could be quite good should any self-certification be called into question concerning women owned business certification. Also, it would be a good source of leads. A member business would know which organizations formally recognize WBENC certification and could use WBENC for quality networking

Women owned businesses should also look locally for professional women's network groups and women business owners groups.

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