Evaluating Certification As a Business Growth Strategy

You Should Get Certified! 

These are words many businesses owned by women hear at some point or another. But is it true?  

The answer is, maybe. Getting certified as a Women Business Enterprise (WBE) or Woman-Owned Small Business (WOSB) takes time and concentrated effort and can result in substantial growth for your company. But it will not, on its own, result in contracts.  

Think of getting certified as a “license to hunt”. The success of that hunt, and deciding whether it is right for you and your company depends on a number of factors:  

• Are you eligible?  
• What does your company sell? 
• Which certification program(s) should you choose? 
• Approximately what percentage of small companies in your industry are woman- or minority-owned? 
• Who are your current customers? Are they from private industry or government? 
• Can you demonstrate successful past performance, either in the public or private sector? 
• Do your target corporate clients have an active supplier diversity program? 
• Are you equipped (in terms of capacity and financial strength) to take on larger contracts?  
• Do you have adequate staff and support with the skills to research opportunities and write proposals? 
• Are you prepared for the fact that it is likely to take 90 days or more to get certified and another 6-8 months before landing a contract?  

You will need to develop a proactive strategy to go after the work. This takes time, effort, dedication, and commitment. That said, the decision to become certified can open large and potentially lucrative opportunities that could enable your company to grow rapidly. 

The Basics: Eligibility 

Certification is a complex topic and you’ll find it uses a lot of acronyms. At a glance: 

Other certifications are also available for companies owned and controlled by veterans and minorities. Your company may qualify for more than one. 

Understanding Supplier Diversity 

Supplier diversity is an industry approach that has grown in prominence over the past decade or so. Many large corporations and government entities proactively seek to procure goods and services from underserved small businesses, including those owned by women, people of color, veterans, those with disabilities, or any other underserved population.  

Many corporations have quotas to ensure a percentage of their contracts go to diverse companies and may even designate a certain percentage of contracts be “set aside” for women- or minority-owned small businesses. Getting certified as a WBE and/or WOSB can increase your chances of landing that business.  

Explore Your Options 

There are several certifications available. Depending on your company’s target audience and business development goals, you may need to get more than one.  

Federal government WOSB certification is handled through the U.S. Small Business Administration (SBA), which offers a wealth of information on its website: SBA.gov/WOSB. Businesses can apply for certification at no charge at wosb.certify.sba.gov. However, this process is time-consuming, there is no live support, and applications are often rejected for technicalities.   

The SBA will accept reciprocal certifications, some of which are also used by private industry. They include: 

• WBENC (Women’s Business Enterprise National Council, pronounced “we-bank”) not only offers a certification widely accepted by private corporations and the SBA, but it also offers regional and national events where certified businesses can meet with buyers and attend educational sessions on growing their business. There is an annual fee to be certified, based on business annual revenue. You will have the option to obtain a WOSB certification from the federal government at the same time you apply for the WBE certification.  
•  NWBOC (National Women Business Owners Corporation) offers third-party certification for women, veterans, and minorities for an annual fee. All application information and documents needed are listed in the NWBOC’s application form, which is available on its website. The NWBOC also offer the option for potential WOSBs and EDWOSBs to purchase a tailored application kit to guide applicants through the process of applying. The fee to apply for certification is $400 at a minimum, and an applicant may be charged more if requests for more information are not met in a timely fashion.  
• USWCC (U.S. Women’s Chamber of Commerce) offers an online-only application process for WOSB and EDWOSB third-party certification to both its members and non-members. Certification takes between 15-30 days and costs $275 for Business and Supplier members and $350 for non-members. The entire application and document submission is completed online, so it is virtually impossible to get a live person to assist. The USWCC requires the application be completed in one sitting—it cannot be completed partially and saved to be completed later. This means that the applicant should be completely ready to apply prior to starting, or risk getting almost done, being interrupted, and then having to restart from the beginning. 

While some of the certifications outlined above are accepted by some states, some states and city governments have their own certification requirements.  

Where to Begin? 

Determine your target market and competitive landscape. 

• If you’ve never worked on a government contract before, it may make sense to expand your corporate business first. If you’ve only performed work for federal, state, or local government, consider expanding your reach in that sector with existing clients before breaking into private sector work.  
• Are you in a field where women do not traditionally own businesses? For example, many marketing communications companies are women-owned. While certification can still be a good business growth strategy, keep in mind you’ll be competing with a large number of competitors who may have more extensive past experience with large corporations and government entities.  

On the other hand, few construction companies, IT firms, and software development companies are women-owned. Corporations, federal and state governments have a hard time finding qualified WBEs and WOSBs with the necessary experience and capacity to meet their needs in these areas. That creates an opportunity to quickly win contracts with these customers. 

Even if you’re in an industry where women predominate, do not be discouraged from becoming certified. While it may be more challenging to land a contract quickly, you can certainly do so with a well-considered outreach and marketing strategy. 

Determine whether you have the capacity and financial resources to handle large contracts. 

Many corporate and government contracts require vendors to hire a qualified team and begin work immediately while waiting several months before invoices are paid. Large corporations often have extended payment terms, such as 45, 60, or even 90 days. Do you have the resources, either in cash or access to a line of credit, to carry your operating expenses during that time? 

Do you have adequate staff, or access to skilled contractors willing to commit to the duration of a contract, to complete the work if you win a large contract? 

Also evaluate your back-office operations. Do you have the resources (staff and software) to properly run a project, including required updates, invoicing, time tracking, and the many details required by corporations and government?  

Who are your current customers?

If you are already doing business with a large corporation or government entity due to past employment or through your personal network, becoming certified is an ideal opportunity to extend that relationship. Contact the company or government entity’s procurement or supply diversity office to discuss. 

Consider subcontracting opportunities. 

If you realize your company is not yet ready to handle a large contract on your own, subcontracting your services to a larger business is an ideal way to gain new business, learn more about working on larger contracts, and expand your reach. Many large government contractors have supplier diversity goals, purchasing agents focused on those goals, and are actively looking for certified vendors.  

What Exactly Will Be Evaluated? 

Remember that the purpose of certification is to confirm that women are the majority owner(s) and are actively involved in running the company. Certifying entities are not evaluating the financial health of your business. For many of them, there are no requirements to demonstrate profitability or even that your company has a current list of customers. Their sole purpose is to establish that your company has been properly set up, is paying taxes, has a process to track basic accounting documents (such as income statements and balance sheets), and that there are not non-qualifying people controlling the company in the background.  

A few examples: 

A construction company that has been in business for 20 years, with one owner who runs the company as President. He decides to appoint his wife, a retired schoolteacher, as CEO so he can be certified as a woman-owned business to win more government contracts. The wife has no industry expertise in construction and according to the company’s bylaws, the position of CEO does not have the authority to overrule the President. This company would not meet the standards of being a woman-owned business. 

A woman with 10 years’ experience purchases 100% ownership from an established company, owned for the past 20 years by one man. Once the sale is completed, the previous owner retires with no ownership stake or involvement in the company. The new owner owns 90% of the company and runs the company with a male Chief Operating Officer who owns 10%. As outlined in the company bylaws, key decisions are decided by most shareholders. Since the woman owns 90% of the company, this company does meet the standards. 

A husband and wife start a new business where the wife owns 51% and the husband owns 49%. Both have industry experience and expertise. The company has been in business for a year but is not showing a profit. The wife is the CEO, determining company strategy and business development. The husband is President and runs the day-to-day operations. Because the company bylaws stipulate that the CEO has the power to overrule and remove the President, this company meets the standards. (If the bylaws did not include this stipulation the company would not likely qualify.) 

The Importance of Organization 

Certification is built on proof that your company is properly set up, with adherence to corporate governance standards, and that women own and control the day-to-day operations of the business. This proof can be found in your corporate or LLC documents, bylaws, tax returns, and financial statements, to name a few.  

Every certification process requires similar documentation. Organization makes the process of application and renewal much easier, and in the process, you’ll have established a habit of keeping important company information updated and organized. 

Download the required documentation and create a checklist. Required documentation for: 

WOSB/EDWOSB (from the SBA) 

WBENC 

NWBOC 

USWCC 

Secure Your Files 

Establish a password-protected digital folder on a cloud drive. This information includes private personal information, so be sure it is secure and available to the primary business owner and a second trusted person as backup. Review the required documentation and save it into this folder. Use subfolders to make it easier to find, such as Corporate Documents, Owner Information, Financial Documents, and any other file structure that makes sense to you.  

Keep Up with Documentation 

If your company is a corporation or LLC, minutes from annual meetings of the shareholders and directors are often required. Templates for these documents can be found online and customized for your business.  

But what if you are the sole owner of your company and you don’t have a board of directors? Minutes are still required, even if you are documenting a meeting with yourself. Having the discipline to keep these records will ensure the liability protection afforded by having a separate legal business entity cannot be challenged if your company were to be sued.  

Realize that certifications need to be renewed annually, meaning you’ll need updated financials, tax returns, meeting minutes, and any other documents that may be new. Keep these files organized and up to date to make renewals less time-consuming. 

Time to Hunt! 

Once you’ve completed the application process, be sure you’re monitoring email to catch any correspondence from the certifying organization. If they are seeking more information or clarification, there is usually a limited time frame to respond. 

Begin working on your company’s outreach and marketing strategy to put in place once you are awarded certification. Third-party certification organizations such as WBENC and NWBOC host annual national conferences and regional events where you’ll have opportunities to meet with buyers from many organizations, and to network with other women businesses.  

Focus your efforts by making a list of corporations or government agencies where your products and services would be a good fit and choose a few of these events to attend. It’s a great way to meet buyers face-to-face. Be sure to have a process in place to follow up on opportunities. 

Publicize your certification to potential customers by including approved icons that identify you as certified on your company website, social media pages, on your email and business card.  

SBA WOSB/EDWOSB logos 

WBENC certified logos  

Capitalize on Certification Benefits 

Be sure to utilize all the benefits of being a certified woman-owned business. For example, many corporate supplier diversity departments have a budget to assist women-owned businesses to grow and may offer scholarships to executive education programs through major universities.  

WBENC offers a number of programs, including a partnership with Dartmouth College’s Tuck School of Business Executive Education program where women business owners can learn more about running a business from the college’s faculty. Many other prestigious business schools offer these programs and the cost to attend can be covered with a scholarship from your current or potential clients. 

Seek Help When Needed 

Finally, consider working with one of the many companies that offer help getting certified, identifying contract opportunities and marketing assistance. The quality varies widely, as does the cost. If you decide to utilize these services, be sure to do your research. Ask for referrals from other business owners and references from any company you are considering using.  

Drive Business with Your Certification 

While becoming certified as a woman-owned business can be complicated and will require an investment of time and self-education, it is also an opportunity to expand your company into new markets and larger contracts. Do your homework, consider whether your company is a good candidate, organize your records, and plan how to best leverage the certification through business development, networking, and executive education opportunities.  

Additional Resources

• WOSB.Certify.sba.gov The Women-Owned Small Business Federal Contract Program (WOSB Program) is to help provide a level playing field for women business owners. The federal government limits competition for certain contracts to businesses that participate in the WOSB Program. These contracts are specific industries where WOSBs are underrepresented. 
• WOSB and EDWOSB Certification Options This table details certification options available to Women-Owned Small Businesses and Economically Disadvantaged Women-Owned Small Businesses 
• How to Get Certified as a Woman-Owned Business (U.S. Chamber of Commerce) 
• Sole Source Contracts for certified WOSB  
• Benefits of SBA Certifications for Women-Owned Businesses  
• Business Certifications Explained: The Basics  
• How Women-Owned Businesses Can Win Federal Contracts 
• WBENC (Women’s Business Enterprise National Council)  
• NWBOC (National Women Business Owners Corporation)  
• USWCC (U.S. Women’s Chamber of Commerce)