Is minority certification of value to women-owned small businesses?

In the past five years women-owned small businesses (WOSBs) and economically-disadvantaged women-owned small businesses (EDWOSBs) have been pushed to become certified. Main reason for the push? It is said it can help women entrepreneurs achieve government contracts and build a better business.

women-owned small businesses

Women opening businesses are no longer news in the United States. Today, at least 30 percent of businesses are owned by females. According to the 2015 State of Women-Owned Businesses report, the number of U.S. women-owned firms continues to climb, and is now estimated to have surpassed 9.4 million enterprises and generate revenues estimated to stand at nearly $1.5 trillion –an increase of 79 percent since 1997.

To support these women entrepreneurs in their endeavours, government agencies have been asked to provide a certain percentage of their contracts to women-owned and minority businesses who have obtained an EDWOSBs certification. However, women-owners claim that certification is of little value as in the end government contracts are often awarded to the lowest bidder.

The process of getting certified, they say, is not easy. There is a lot of documentation required, the process is arduous, time consuming and expensive.

The other complaint often mentioned is that no certificate is uniformly accepted nationwide. In most cases certification requires extensive documentation including having old financial statements and even on-site visits.

There is no question that certification might have helped some women advance their businesses but this is not a universal observation. In fact, some women business owners claim the exact opposite –that certification is essentially a waste of time and money as contracts are rarely awarded to them.

So should women-owned small businesses get certified?

Sandra Eberhard, Executive Director, WPEO-DC women-owned small businesses

Sandra Eberhard, Executive Director, WPEO-DC

Most organizations offering certification and third party agencies assisting with the certification process consistently claim that certification has helped women-owned small businesses get federal grants and this has allowed business expansion.

“The WBENC certification is a growth network for businesses owned, operated, managed and controlled by women in the world of commerce.  We connect businesses that contribute to our members’ competitive supply chains, deliver products and services that promote innovation, open new channels of revenue and creates partnerships which provide opportunities that fuel the economy,” said Sandra Eberhard, Executive Director, WPEO-DC, a dynamic community of certified women-owned businesses based in Washington DC. “Companies in growth mode looking for development, connections, access and like-minded entrepreneurs will benefit from this network and certification,” she affirmed.

Women-owned small businesses in Supplier Diversity Programs

There is no doubt that certification is a smart move by women business owners as it may provide a competitive edge when they are looking to advance or grow their businesses in certain industries related to federal contracting or competing to become a vendor/supplier for a major corporation –many of them with corporate social responsibility programs establish a suppliers’ quota for minority and women-owned small businesses.

“One of the main constituents in our network is the corporate member. These are the Fortune 1000 companies who have Supplier Diversity Programs dedicated to ensure diversity in the company’s supply chain,” Eberhard said. “When surveyed and asked about the value of certification, they tell WPEO that our biggest value is connecting them with diverse women owned enterprises capable of doing business with their supply chains. They have also asked for increased diversity in the network so their supply chains mirror their customer base. The WPEO network is 39.6 percentage minority, which includes Latina owned businesses,” she shared.

Some business owners who have succeeded in gaining government contracts insist that women owners should look at the bigger picture than just going after a government contract. The government has many types of contracts/grants but getting them depends on the type, size and industry of business applying for the contract.

So here’s the scope:

WPEO-DC area of reach for women=owned small businesses

WPEO-DC area of reach

  • If a woman owned business is selling services or products directly to the consumer, certification is definitely not worth it.
  • Be aware that bidding for federal or state contracts is very competitive and you need to be certified by different agencies –federal or state by state- if you decide to compete.
  • Aiming only at government contracts often leads to huge missed opportunities in the private sector, which also has supplier diversity goals.
  • Competing to become a vendor/supplier for a major corporation might require certification to be included in their minority and women-owned small businesses suppliers’ directory.
  • Once you get your certification, register with a local or regional organization that will help you steer in the right direction

In the end, women-owned small businesses need to do their homework prior to getting certified. For those who have something to offer to the government or the corporate sector, certification opens up many doors and it usually helps expand their business.

For the business owner who deals directly with the public and has little time or money to waste, perhaps obtaining certification may not be a worthwhile venture. The onus is always on the owner to determine if certification will pay off in the long run. Do you homework. In the end the key feature of any business is to be good at whatever you do; certification is a bonus that may or may not attract new business opportunities.

 

About Susana G Baumann

Award-winning journalist, author, multicultural expert, public speaker, small business advocate and the Editor-in-Chief of LatinasinBusiness.us. Susana is an Argentinean immigrant who started her own small business over 20 years ago. Now, through her new digital platform and social media channels, she advocates for the economic empowerment of Latinas in the United States.
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  1. […] recently debated whether minority certification is beneficial for women. Certifications for economically-disadvantaged women-owned small businesses (EDWOSBs) may be one […]

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