The number of female entrepreneurs is growing. There are 12.3 million women entrepreneurs in the US, according to the National Association of Women Business Owners (NAWBO), who employ nearly 9.4 million people and generate $1.8 trillion in annual revenue. And women of color launch 64% of female-owned startups.
However, most of these women have not had their businesses certified as a women-owned business. In fact, less than 1% are certified as owners of women-owned businesses.
Official certification provides opportunities for female entrepreneurs to partner and compete with larger companies for contracts. To create more opportunities, federal government agencies (plus numerous state and local governments) offer “set-aside” programs that stipulate that a certain percentage of contracts are for small businesses, including those owned by women.
Types of Business Certificates for Women
There are two categories of certifications for women owned by companies: Women’s Business Enterprise (WBE) and Women-Owned Small Business (WOSB).
1 — Women’s Business Enterprise (WBE) is a designation used by many companies and private sector organizations, and some state and local governments have committed to offering employment contracts to women-owned companies. In the past, women could self-certify their business; however, now you need to go through one of the SBA approved third-party organizations:
WBE certification is also available through any of the state offices for Minority and Women Businesses or local government agencies. Be sure to ask where the certification applies, as some state offices are only certified to conduct business in their own state.
Each organization has its own procedures, requirements and suitability standards. In general, to obtain WBE certification, applicants must:Based in the United StatesA for-profit companyU.S. citizens or legal residents
In addition, the company must be 51% owned by a woman (or a group of women), have a female-controlled board of directors and be led by women, meaning a woman must be responsible for day-to-day operations.
2 – Women Owned Small Businesses (WOSB) is a designation used by federal government agencies committed to offering a percentage of contracts to women-owned companies. The federal government has set its target of allocating 5% of federal contracts specifically to female entrepreneurs and at least 25% to small businesses. Qualified entrepreneurs can also apply for a Economically disadvantaged small businesses owned by women (EDWOSB) designation, a subcategory of the WOSB.
Eligibility for the WOSB Federal Contracting program requires:The company must be small by SBA standards The company must be at least 51% owned and controlled by women who are US citizens Day-to-day operations and long-term decisions are managed by a woman or women
To qualify as an EDWOSB, a company must:Meet all requirements of the WOSB Federal Contracting program Owned and controlled by one or more women (each woman must have personal assets of less than $750,000) Owned and controlled by one or more women (each with $350,000 or less in adjusted gross income averaged over the past three years) owned and controlled by one or more women (each with $6 million or less in personal assets)
The SBA has approved the same four organizations mentioned above to provide third-party certification for WOSB. Each has a different process and cost.
Apply for certification
All companies that want to do business directly with the federal government are now required to register their business on SAM.gov. (SAM stands for System Award Management.)
If your goal is to become a subcontractor, you may not need to register with SAM, but you should get a Unique Entity Identifier (UEI) number (which is free) there. The Unique Entity ID number replaces the old DUNS numbers, which have been removed from SAM.gov.
Registration on SAM is the first step in the certification process. After you register, you can specify which contract program your small business is eligible to compete for.
When you register your small business on SAM.gov, the SBA uses that information to populate the Dynamic Small Business Search (DSBS) database it maintains. Government agencies use the DSBS to find small business contractors. And small businesses use the DSBS to find other small businesses to work with.
Government agencies are required to use SAM to advertise all contracts over $25,000.
Make sure your SAM account is active before proceeding to the next step.
Expect the application to require some or all of the following information and documents:Company name and fictitious company name (“Doing Business As” DBA) Owner’s names, addresses and company website The legal structure of the company Formation date A list of each owner, partner, shareholder or member within the 12 months prior to the date of application All affiliatesContact information for regular customersCorporate and personal loansEmployee informationBirth certificate, current passport or naturalization papersDriving licenses of all ownersEIN (Federal Tax ID)CVs of all owners, directors, partners, officers and key personnelCurrent bank statements for all deposit accounts and loan statementsFinancial institution signature cardsCapitalization of the CompanyThree year financial statements, including balance sheet, profit and loss accountTax returns for the past three yearsAssumed/fictitious name certificateAuthority to do business in the state and certificate of good repute issued by the Secretary of State Articles of Incorporation and Articles of Association of Amendments filed with the Secretary of State Articles and Amendments Statement of Information filed with the Secretary of State indicating officers, directors, managers, members or general partners For LLCs, Articles of Incorporation and Operating Agreements Copies of all Company Share Certificates Minutes of shareholders and directors of companies’ meetingsShareholder agreementsPartnership agreementsProfessional, industry and business licensesCopy of lease or deed of domicile
Companies must update their information annually through the Dynamic Small Business Search database and beta.certify.sba.gov.
The application process for WBE certification is similar, although each agency may have its own specific guidelines.
Getting certified as a woman-owned business can open up a whole new world of potential profits, but only if you make the most of the designation. Include the certification logo in all your marketing materials and on your website. Stay active on government contract websites and attend as many contract/networking events as possible so that government agencies and businesses know about your business. While procurement opportunities involve a lot of hard work, getting a contract is a huge win and can lead to more contracts and a boost to sales in your growing business.
This post How to Get Certified as a Female Owned Small Business was original published at “https://smallbiztrends.com/2022/06/geting-certified-as-a-woman-owned-small-business.html”