As a female entrepreneur, you can benefit from registering as a woman-owned business. And getting certified as such can help you access government contracts, new clients, and even prospective employees.
Here’s what you should know:
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What is a woman-owned business?
The term “women-owned business” seems pretty straightforward. But when it comes to certifying or registering a business as “women-owned,” there’s a much more prescriptive definition.
There are two certifications for women-owned businesses: The Women’s Business Enterprise certification (WBE) and the Women-Owned Small Business certification (WOSB). For both the WBE and WOSB, women don’t have to be the sole proprietor of the business, but they do need to own, manage, and control at least 51 percent of the business. In addition, the woman owner must be a U.S. citizen. You can review all of the specifications here.
Benefits of registering as a woman-owned business
Certifying your business as woman-owned involves a fair amount of paperwork. So why do it? Well, taking the time to certify your business could open up new opportunities for growth. Some of those benefits include:
Appealing to new clients
Many businesses seek out women-owned businesses as partners, so registering as such can mean a whole new stream of revenue for your business. One reason that women-owned businesses are appealing as partners: the federal government has historically offered tax incentives to companies that work with women-owned businesses, and some states do, too.
In addition, smaller, more diverse companies also tend to be more innovative and agile, which can benefit their partners by taking them in new (and profitable) directions more quickly than their bigger-name competitors.
Accessing new markets
Not only does certification attract new clients, but it also opens up new sectors of work for small businesses. The U.S. Small Business Administration implemented the Women-Owned Small Business (WOSB) Federal Contracting Program in 2011 with the goal of expanding opportunities for women-owned businesses to compete for contracts, especially in industries where WOSBs are significantly underrepresented.
Finding new funding opportunities
Accessing capital can be a barrier for women-owned businesses for a variety of reasons, from loan denials or just not applying for financing in the first place. But what women entrepreneurs might not realize is that there are many funding options available, ranging from private grants and small loans to government loans and grants (this is where certification is a plus).
Attracting prospective employees
Attracting talented, dedicated employees can be challenging for every company, so gaining certification as a woman-owned business not only helps build credibility, but also it helps attract candidates who are interested in working for a female entrepreneur.
Accessing exclusive training and educational programs
Certification also gives you access to tools and resources like industry research, trainings, toolkits, networking opportunities, and more.
How to become a certified woman-owned business
Both the Women-Owned Small Business (WOSB) and Women’s Business Enterprise (WBE) certification require that a woman-owned business be led by a woman who is a U.S. citizen and owns at least 51 percent of the company. The process and fees for each certification differ.
The Women’s Business Enterprise National Council (WBENC) provides WBE certification through an application process in which candidates must submit legal and financial documentation and a fee. Certification is good for one year. You can review the WBENC website for more information.
Designation as a WOSB is a self-certification process through the U.S. Small Business Administration. Certification also lasts for one year. You can review the SBA website for more information.
There’s an additional certification for economically disadvantaged women-owned businesses (EDWOSB). To qualify, owners must demonstrate economic disadvantage defined as:
- A personal net worth of less than $750,000
- Adjusted gross yearly income averaged over the last three years that doesn’t exceed $350,000
- A fair market value of all assets that does not exceed $6 million
How to apply
In addition to WBENC, here are the three other SBC-approved third-party certifiers for WOSBs and EDWOSBs:
National Women’s Business Owners Corporation (NWBOC): Candidates must mail in an application form, a sworn affidavit, supporting documentation, and the $400 fee to the NWBOC.
U.S. Women’s Chamber of Commerce: The organization’s nonrefundable certification services fee is $275 for U.S. Women’s Chamber of Commerce Business and Suppliers members, and $350 for non-members. Candidates submit an online application and, if accepted, the application is approved by a primary and secondary examiner.
El Paso Hispanic Chamber of Commerce (EPHCC): To begin the application process, you must contact the MBDA Business Center-El Paso, and its business development specialists will assess your business, send you an application form, and review your documents.