According to the 2017 State of Women-Owned Businesses Report, there are an estimated 11.6 million women-owned businesses in the U.S., which accounts for 39 percent of all U.S. firms. The Minority Business Development Agency reported eight million minority-owned businesses in the U.S. as of 2016. And the number of both women and minority-owned businesses continues to grow!
If you’re a business owner who happens to be a woman or member of a minority group, the right business certification can help give your company a boost.
Getting certified as a Women Business Enterprise (WBE) or Minority Business Executive (MBE) has major advantages. Most state and federal agencies, as well as many corporations, allocate a certain percentage of projects and contracts to officially recognized minority and women-owned businesses. By certifying yourself as one of these types of businesses, you may have a greater chance of attracting and securing business projects. It also allows you take advantage of programs that offer business funding, counseling, and networking opportunities.
Ready to get certified? Here’s what you need to know about the process.
To qualify as a WBE, your business must be for-profit and at least 51 percent women-owned and controlled. That means a woman can’t just have majority ownership — she also has to be responsible for the day-to-day decision-making and long-term direction of the company. Individuals who apply also need to be U.S. citizens, and have been in business for about a year before applying.
There are several ways to apply for WBE certification, including through the Small Business Administration (SBA), National Women Business Owners Corporation, or the Women’s Business Enterprise National Council (WBENC), all of which grant you national certification. If your work is mostly in the private sector, these third-party certifications are your best bet since they cover all your bases.
You can also go through a state or local agency to get certified (check your city’s official website to see if it has certification programs), which is a good option if your business does a lot of government work, or if you want to focus on landing more government contracts.
The application process can be tedious, so it’s a good idea to start gathering the required documents as early as possible. Not only will you need to provide evidence of majority ownership and control, but you’ll also need to submit relevant business licenses, profit and loss statements, federal income tax returns, payroll information, personnel details, resumes of everyone on your management team, and a statement that describes the history of the business. The WBENC has a comprehensive list of everything you’ll need. The application fee is anywhere from $350 to $1,250 depending on your company’s annual revenue. Once you submit your application, be prepared for an on-site visit and interview. From there, processing time is around 90 days.
The qualifications and process for getting an MBE certification are similar to those for women-owned businesses. According to the most common national certifier, the National Minority Supplier Development Council (NMSDC), your business must be a for-profit enterprise located in the U.S. or its territories, and must be at least 51 percent owned, operated, and controlled by a minority group member with U.S. citizenship. The NMSDC defines a minority group member as someone who’s at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American.
NMSCD has a list of documents necessary for certification, including the certificate of incorporation, history of the business, and proof of insurance, to name a few. You can also apply through the SBA or a local government agency. If you go through the NMSCD, application cost is usually between $350 and $1,200, depending on your region. Once you complete the application and in-person interview, the review process can take up to 90 days.
Getting approved for certification doesn’t automatically guarantee you additional business. For that to happen, you need to be proactive. Start by updating your website and marketing materials to reflect your new certification, or send out a newsletter to your clients or customers to let them know about the change. You should also consider contacting local agencies, like your city’s planning or economic development departments, to inform them of your new status and ask if they have email updates that share information about upcoming business projects.
Plus, depending on which certifier you use, you can take advantage of community boards and networking events to connect with corporations or seek out new business opportunities.
Finally, make sure you maintain your certification by applying for renewal each year. If you let your certification expire, you’ll have to start the application process from scratch, potentially losing business in the process. Most organizations advise that you start the renewal process at least 90 days before your certification expires, since approval for recertification takes about three months. To re-apply, you may need to answer basic questions about your business, fill out a new application, re-submit certain documents, and pay another processing fee.