How Being A Certified Woman Owned Business Can Help Grow Your Company
If you’re a woman who owns a business -- congrats! It’s fantastic to hang your shingle and go off on your own. There is another advantage to being a Woman Owned Business: getting officially certified as one on federal and local levels. The government and large corporations are the largest buyers of goods and services and often award contracts specifically to women. These contracts can be constant, reliable sources of income.
In her recent Jam Session, Jean Kristensen of Jean Kristensen Associates explained what it takes to get certified and how to navigate securing government and corporate contracts. Kristensen has started three businesses that have been successful thanks in large part to being a Woman Owned Business and winning government contracts. She now advises women on how to understand the system.
A Little Background
During the 2014 fiscal year, the U.S. government awarded 267,168 contracts to Woman Owned Businesses for approximately two billion dollars. The top contacts were awarded for professional services, medical and surgical supplies and administrative support.
Some businesses also have a 5% goal for subcontracting work to Women Owned Businesses once they win a contract. This can be as high as 30% in some state and local jurisdictions. So even if a Woman Owned Business doesn’t directly win a government contract, they can still gain business through subcontracting. But you have to know how to find these opportunities in the first place.
What Is The Purpose of Certification?
Being a certified Woman Owned Business is a tool designed to increase opportunities for women. It’s not a charity program nor does it give women special treatment. It’s designed to increase visibility.
It’s also a way for government and corporations that have the aforementioned subcontracting goals worked into their contacts to meet directly with Women Owned Businesses.
What’s a WOSB Versus a WBE?
There are two kinds of certifications: Women Owned Small Business and Woman Business Enterprise.
A Woman Owned Small Business (WOSB) is a program that provides greater access to federal contracting opportunities for Woman Owned and Economically Disadvantaged Women Owned Small Business. (EDWOSB).
The program allows contracting officers to set aside specific contracts for WOSB and EDWOSB that will help federal agencies achieve the existing statutory goal of 5% of federal contracting dollars being awarded to WOSB.
An EDWOSB meets a certain financial criteria. The owner’s assets, excluding their business and their home, is under $250,000. That woman, and her business, in considered economically disadvantaged.
WOSB Eligibility Requirements
WOSB certification is overseen by the Small Business Association (SBA).
In order to be considered to be a WOSB the company must:
• Be 51% controlled by one or more women, and primarily managed by one or more women.
• The women must be U.S. citizens.
• The firm must be “small” in its primary industry in accordance with SBA’s guidelines for that industry.
The SBA will verify this information by collecting documents such as tax returns, bank statements, operating agreements, etc. They will also ask for birth certificates and passports to prove citizenship.
WOSB is unique to the Federal government. It is a program that a person can self-certify for. As long as you can prove that your company is owned by women you can start marketing your company, almost immediately, as a Woman Owned Small Business while the documents are being verified.
Women Business Enterprise
The second classification is Woman Business Enterprise. This certification is used by local, state, and other quasi-government agencies such as authorities, airlines and in the private sector.
The qualifications for a WBE are similar to those of a WOSB. The company must:
• Be at least 51% owned and controlled by women.
• Show fiscal responsibility via tax returns, bank statement and its business credit rating. A company should be current with their fiscal responsibilities and appropriate cash flow.
• Have the capacity to succeed. The company’s principles must have a certain level of experience in the market they are going into. If your field requires licenses, it may be necesessary that those licenses are held by the principles.
The Benefits of WBE Certification:
• Access to opportunities, such as large corporations and federal agencies.
• Training and educational programs exclusive to WOSB.
• Networking opportunities.
• Connect directly with buyers looking meet their 5% subcontracting federal goals.
• Access to leads for bids and proposals.
• Access to purchasing agents.
• Mentorship programs
It’s also important to know about:
Sole source and set aside: This is an opportunity for a Woman Owned Business to pitch business to government agencies who can make a decision on the spot, without going out to bid. This is great for smaller firms.
Discretionary spending: This is when a local government gives purchasing agents a certain amount of money to spend on women owned businesses. In New York state, that can be up to $200,000.
What Does It Take to Succeed As A Certified Woman Owned Business?
Just because you get certified doesn’t mean that government contracts will magically start appearing at your door. Kristensen said the key is to have a plan when it comes to winning bids.
• Start with researching about five agencies at a time and start locally. You’ll likely win a small, local contract before a large, federal one. A good place to start is www.wbenc.org.
• Find out what these agencies are buying and how they are buying it. Does it fit into what your company does? You can see what government contracts have been on awarded at www.aquisition.gov.
• What are the margins? Can you compete in this market? Otherwise having the certifications doesn't make sense.
• Competitive pricing: The larger the entity, the more they are looking for competitive pricing.
• Capital: Make sure you understand how and when are you going to get paid with a government contract, and make sure your company has enough capital to cover yourself in the interim.
• Differentiators: What makes you different. Make certain you can communicate why people should do business with you.
• Creativity: Agencies are looking for ways to increase their market share, save money, increase value to stakeholders. Know how you can do that for them.
The Ability To Do Business And The Power Of Teaming Up
It’s important to know what type of project could you take on. Contractors will likely ask about the last project that you worked on that is similar to what they are looking for.
Buyers often say that inexperienced companies are not going to cut their teeth with them. You need to have some level of experience in their space in order to be a contender. One way to get around this is to team up with someone who has experience for either a full contract or a subcontract.
Kristensen did this with a cleaning company whose contract with a large bank also needed to supply security. Kristensen ran a security company, and it was a great fit. She then went on to pitch her company’s security services to other banks and in turn won many more contracts.
Let Buyers Know Who You Are
Once you research what groups are buying in your area, make sure they know who you are. Research shows that it takes 18 months of continual effort before you score your first contract. That said, a commitment to marketing yourself is key to staying on buyers’ radars. Kristensen recommends consistent but meaningful communication with buyers.
Good public relations such as a professional website, social media, direct mail, email blasts, etc. are all tools to let people know about your services. Make sure your target audience sees you and knows you. Highlight your unique unique service offering and position yourself as thought leader.
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