According to the Center for Women’s Business Research, in McLean, VA, there are more than 10,000 companies owned by women in the U.S. Fox Business.com reports that never before in history have women been so successful in launching and growing their own companies. The Guardian Small Business Research Institute says women-owned businesses employ more than 13 million people and will generate 5 million new jobs by 2018. Together, women-owned businesses are successfully generating trillions of dollars in sales each year.

Women’s Work

Could Certifying as a Women-Owned Business Help Your Company?

Donna M. Gray, CRM
Total Awards and Promotions/awardsmall.com

According to the Center for Women’s Business Research, in McLean, VA, there are more than 10,000 companies owned by women in the U.S. Fox Business.com reports that never before in history have women been so successful in launching and growing their own companies. The Guardian Small Business Research Institute says women-owned businesses employ more than 13 million people and will generate 5 million new jobs by 2018. Together, women-owned businesses are successfully generating trillions of dollars in sales each year.

How can small, women-owned companies in our industry join this successful group? Step into my office and join me in exploring whether your business is eligible and ready to enter the ranks.

My first introduction to Woman Business Enterprise (WBE) status came some 15 years ago when an important customer told me that I could earn more of their company’s business if our company was certified as a woman-owned business. We started our business in 1977, and our company went “on the books” as a woman-owned company when we incorporated back in 1986. Our company was owned by a woman—me—so what did the customer mean? I did some homework and learned that some major corporations were beginning to mandate that the majority percentage of their business (purchases) should go to certified women-owned and minority-owned companies. After hearing about business we were losing to certified companies, I decided to take the plunge into what seemed like an abyss of required paperwork. A word of advice learned the hard way: This process requires a major time investment so it’s not a good thing to attempt during a busy season.

When I got past the feeling of “overwhelm,” I realized that I just might need some help wading through the materials needed for my application. I found the National Women Business Owners Council and the Women’s Business Enterprise National Council (WBENC). Learn more at www.nwboc.org and www.wbenc.org/certification. They didn’t hold my hand but offered good information. I did get some help from our local Wisconsin Women’s Business Initiative Corporation; you may have a similar local body. Today, there are many organizations that can help, including WeConnect International (www.weconnectinternational.org), which connects women-owned businesses with major U.S. companies they can supply. To make things clear, applying for and being admitted into this group does not guarantee business will come without effort. Acquiring new business after certification may still mean having the lowest bid. Because of this, some may not wish to go through the certification process.

"It might be tempting for businesses owned by men to shift some stock to qualify for this certification. Don’t try it."

To qualify, a woman or women must have majority ownership (at least 51%) of the business regardless of the form of the entity (such as C corp, S corp, limited liability corporation, or sole proprietorship). You must prove, through articles of organization, operating agreements, stock ledgers, and stock certificates that a woman or women own at least 51% of voting stocks and 51% of each class of membership interest in the company. Additionally, a woman or women must control at least 51% of the long-term decision making and day-to-day management and administration of the business operations. The company must have been in business for at least 6 months, and the woman or women who have majority ownership must be U.S. citizens or legal resident aliens.

Collecting the information to prove all of this was eye-opening. Providing everything—from my birth certificate to copies of our stock certificates and information on every stockholder, including their percentage of stock—really gave me a feeling of being on top of things.

It might be tempting for businesses owned by men to shift some stock to qualify for this certification. Don’t try it. Small Business Administration (SBA) auditors have seen owner’s wives or other women suddenly become owner of 51% of the stock as a business seeks WBE certification. That exact percentage—51%—is a “red flag.” Whichever authority is certifying your business may visit your business while looking for the signs that a woman is really the one in charge.

This certification does bring benefits that make it worth going through the qualification process. These benefits include, but are not limited to, business opportunities with major corporations and government agencies that represent more than $700 billion in annual purchasing power. While certification gives a WBE a definite edge, these businesses still pursue, cultivate, bid on, and work to seal the deal on signing the business.

I remember the day I finished putting together all the forms, back-up proof, and incidental information for our company’s certification. I took my husband, Dave, out for dinner to celebrate. I was excited to hear the news that my company had been approved. I didn’t realize there could be glitches that needed to be taken care of (really, just a few details here and there). The waiting period seemed like forever even though it was pretty quick.

Then I received it—the certificate testifying that our company was indeed now a certified woman-owned business. After quickly framing it, I hung it proudly on our showroom wall for the world to see, so they could beat a path to our front door.

Only, that’s not the way it happens, is it? Getting certification is only the beginning. Business won’t just drop in your lap. It still takes work getting the word out and developing and cultivating business relationships.

But the work is worth it. Being certified as a woman-owned business is good public relations for the company and allows the business to be registered in multiple resources that can lead contractors to you.

Certification leads to better access to capital and funding opportunities. There are lending institutions that work only with certified business owners; the SBA backs financing for WBEs through these institutions. A number of local, state, and federal grant programs are available to WBEs, and there are other incentives such as training and support for WBEs.

There is still a downside. In 2013, WBEs had a lower approval rating (31%) for small-business loans than male-owned businesses (39%). This is an example of the reason certain federal contracts are set aside specifically for women-owned small businesses; the playing field is not yet level. But 2015 numbers show that things are improving.

There has never been a better time for women business owners to seek certification whether at a state or federal level so that they can bid on state and federal government contracts. The National Association of Women Business Owners (NAWBO) holds summits that provide training and networking opportunities. Visit www.nawbo.org.

The certification process isn’t a one-time thing that guarantees your status for the life of your business. You have to recertify. The frequency depends on the certifying body. For instance, some states require recertification on a yearly basis. I’ve learned to keep my certification file up to date and handy so it’s easy.

Not all women choose to pursue WBE status, but certifying one’s business can help to open doors. Certification does not guarantee success, but a good company that is certified will gain advantages and exposure to opportunities that might otherwise have been out of reach.

Donna M. Gray, CRM, and her husband, David L. Gray, CRM, are owners of AwardsMall/Total Awards, Promotions and Gifts, a full-service awards and personalization business in Madison, WI. Donna oversees all facets of the organization and directs sales and marketing for all company products, such as awards, donor walls, custom pins and medallions, and promotional products.

Not Just for Women

Opportunities are available for businesses owned by women, minorities, veterans, and socially and economically disadvantaged individuals. Federal contracts or services may be made available to very specific business types within each category, such as Native American microenterprises or service-disabled veteran-owned businesses. Determining your eligibility for some certifications or contracts may be easy, but how do you know if you are socially or economically disadvantaged?

According to the SBA, “socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identification as members of groups without regard to their individual qualities.” Groups presumed to be socially disadvantaged include black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and subcontinent Asian Americans. Those who are not among those categories still can move to prove social disadvantage due to “race, ethnic origin, gender, physical handicap, or long-term residence in an environment isolated from the mainstream of American society.” Similarly, “economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities,” according to the SBA.

Learn more at www.sba.gov/content/disadvantaged-businesses.

Donna M. Gray, CRM, and her husband, David L. Gray, CRM, are owners of AwardsMall/Total Awards, Promotions and Gifts, a full-service awards and personalization business in Madison, WI. Donna oversees all facets of the organization and directs sales and marketing for all company products, such as awards, donor walls, custom pins and medallions, and promotional products.