Women business owners have traditionally faced unique challenges when seeking government financing and contracts. To balance those disadvantages, there are now certain programs and hiring dollars that are reserved only for women-owned businesses. However, owning a business as a woman is not enough; there are specific certification requirements that companies must meet to be eligible.
What is a Women-Owned Business Certification?
A women-owned small business certification is an official designation through the U.S. Small Business Administration. Businesses that achieve this certification process are eligible for programs and contracts reserved for women-owned small businesses.
Types of certification for women-owned businesses
There are two main types of women-owned small business certifications through the SBA: women-owned small businesses and economically disadvantaged women-owned small businesses. Here is a guide for each.
- Women-Owned Small Businesses: this is the basic women-owned certification through the SBA. Businesses must be at least 51 percent owned and led by women to qualify for this designation.
- Small Businesses Owned by Economically Disadvantaged Women: This designation goes one step further. In addition to being owned and operated by women, EDWOSBs must also have a 8(a) certification, which specified companies that are owned by economically disadvantaged people. These companies can qualify for contracts reserved for both women and economically disadvantaged companies.
Women-Owned Small Business Benefits
Wondering why you might want to designate your business as a women-owned small business? Here are some benefits to consider:
- Qualify for more government contracts: Certain government agencies are required to allocate a certain amount of their contracts to women business owners and those who have faced economic disadvantage. Decision makers can filter through contractors to find these providers of various products and services. Therefore, getting certified can increase your visibility and open up your company to more opportunities.
- Grow your customer base: Many large corporations also have diversity goals, which include supporting women entrepreneurs. Therefore, you may receive contracting or sales opportunities from more than just the federal government.
- Network with other women business owners: There are many events and networking opportunities specifically for women-owned businesses. So a certification can help you find and make the most of these contacts.
- Access educational resources: The SBA and third-party organizations also provide educational guides and resources for women-owned businesses. You can find valuable information on how to seek financing, marketing or expanding your operations. the Amazon SBA Program is such a resource.
- Find business mentors: You can also benefit from learning from other women who have been in similar situations. WOSB or EDWOSB certification can help you find and connect with potential mentors.
Women-Owned Business Certification Requirements
To qualify for the benefits listed above, you must meet the following criteria.
- Be a small business: The SBA has specific size standards that apply to a variety of contracting and incentive programs. The definition varies by industry, but most must have fewer than 1,500 employees.
- Have at least 51% ownership: Women must own and control at least half of the business. They must also be US citizens.
- Have women in management roles: Female business owners or managers should also be responsible for day-to-day operations and making long-term business decisions.
How to Get a Woman-Owned Business Certification from the SBA
If you are interested in obtaining a woman-owned business certification, you will first need to apply through the SBA or an affiliated group. Here’s a basic look at the certification process:
- Check eligibility: WOSB must have proof that the business is owned by at least 51 percent by a woman or women who are US citizens. And EDWOSBs must also be an economic disadvantage. The SBA offers a online question and answer tool to determine eligibility before beginning the application process.
- Gather essential documents: You will need business and personal documents to show that you meet the eligibility requirements. These may include proof of US citizenship, business trust agreements, articles of incorporation, partnership agreements, and stock ledgers.
- Apply online: The SBA offers an online application tool that asks questions and allows you to upload relevant documents.
- Connect with a third-party certification provider: Alternatively, there are four external organizations approved by the SBA to perform third-party certifications. Each has its own processes and associated costs. So contact them directly for information on how to apply. The four organizations are the El Paso Hispanic Chamber of Commerce, the National Corporation for Women in Business, the US Chamber of Commerce for Women, and the National Council of Women in Business.
How much does a women-owned small business certification cost?
The SBA certification process for a woman-owned small business is free. However, third party certification may have costs. These groups help you through the certification process, so you are essentially paying for their services. Certification is usually free for members of those groups, but can cost a few hundred for non-members.
What is the difference between WOSB and Edwosb?
WOSB stands for Women Owned Small Business, which simply requires that a small business be owned and operated by at least 51 percent women who are US citizens. EDWOSB stands for Economically Disadvantaged Women-Owned Small Businesses, which must meet the requirements for WOSB and also show that the owner comes from an economically disadvantaged background. This includes having a low personal net worth and other qualifications. EDWOSB certification can open a business to more government contracting opportunities, although both provide benefits. Whether you’re considering WOSB or EDWOSB certification, you’ll need to submit business ownership and management information to the SBA or third-party certification providers.
How long does a WOSB certification take?
The SBA grants WOSB or EDWOSB certification for a period of three years. There are recertification options at that time, which are generally simpler than applying for the initial certification.
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