SCORE

If you’re a woman small business owner who wants to do business with corporate or government clients, you know there’s a lot of competition. But you can get an edge by getting your company certified as a woman-owned business.

Certification makes your business more visible to potential clients, increases your networking opportunities and can expose you to new possibilities.

Whether you’ve never thought about getting certified, have considered it, or are already certified you should know the Small Business Administration (SBA) has proposed to amend its certification process. New regulations are expected to be published this summer.

Here’s what you need to know.

There are two types of woman-owned business certifications. The Women’s Business Enterprise (WBE) certification is for businesses wanting to do business with the private sector, nonprofits, state governments or local governments.

For those wanting to work with the federal government, your goal is certification from Women-Owned Small Business (WOSB) or Economically Disadvantaged Women-Owned Small Business (EDWOSB).

To be eligible for the women’s contracting program, your business must:

  • Be a small business
  • Be at least 51% owned and controlled by women who are U.S. citizens
  • Have women manage day-to-day operations and also make long-term decisions

To qualify as an economically disadvantaged business within the women’s contracting program, your business must:

  • Meet all the requirements of the women’s contracting program
  • Be owned and controlled by one or more women, each with a personal net worth less than $750,000
  • Be owned and controlled by one or more women, each with $350,000 or less in adjusted gross income averaged over the previous three years
  • Be owned and controlled by one or more women, each with $6 million or less in personal assets

The eligibility requirements to qualify as a WOSB or an EDWOSB are fully defined in Title 13 Part 127 Subpart B of the Code of Federal Regulations (CFR). You can also get a preliminary assessment of whether you qualify at the SBA’s Certify website.

According to SBA, the new requirements currently are scheduled to be published on June 30, 2020, and take effect 30 days later.

Per the Office of Advocacy, the proposed rule would:

  • Provide that SBA will establish a free electronic application process for all firms seeking to be certified as WOSBs or EDWOSBs. In the pursuit of speed, efficiency, and ease of administrative burden, applicants would apply online through an electronic application process.
  • Allow participation from an expanded list of federal and state entities with existing certification programs and confirm the continued participation of approved third-party certifiers.
  • Require approved third-party certifiers to notify applicants of their fees and the option to use SBA’s free online certification process.
  • Eliminate the self-certification option for SBA 8(m) program participants.
  • Adopt a $750,000 net worth standard when assessing economic disadvantage for eligibility for both the 8(m) EDWOSB Program and the 8(a) Business Development Program.

Perhaps the biggest change to affect participation is the elimination of self-certification. Businesses will need to certify through an approved third-party entity or go through the SBA’s free online certification at certify.sba.gov.

Already certified? Here’s what to know

If you’re already certified through a third-party or the SBA, you’ll need to get re-certified: “Third-party certified firms must re-certify three years after the date of their most recent re-certification as a third-party certified firm.”

For self-certified WOSBs or EDWOSBs with active WOSB or EDWOSB set-aside contracts, your business is still certified throughout the life of the contract. If the contract is more than five years, however, the business must get re-certified by SBA or an approved third-party certifier before the end of the fifth year of the contract.

If your business is self-certified and has no active contracts, you must re-certify with the SBA or approved third-party at a date dependent on the last time your business was examined by the SBA.

What can certification do for you?

Being certified as a woman-owned business doesn’t guarantee anything, but it can help you gain an advantage with potential clients.

  • Federal government agencies are required by law to meet goals for giving a certain percentage of their contracts to WOSBs or EDWOSBs. In industries where women have historically been underrepresented, some federal agencies even set aside a certain percentage of their contracts for WOSBs or EDWOSBs.
  • State and local governments, nonprofit and private sector businesses may have similar quotas to meet. In these situations, being certified can help your small business get in the door to compete with larger companies for contracts.
  • Certification organizations may also offer member benefits such as educational programs, conferences, networking events and matchmaking opportunities.
  • Do you already work with corporate or government clients? Certification as a woman-owned business could open up even more opportunities with those companies.

You can stay updated on the upcoming certification changes on the SBA contracting website or check with a SCORE mentor.

About the Author(s)

 Rieva  Lesonsky

Rieva is CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship and SmallBizDaily.com.

CEO, GrowBiz Media
Upcoming Certification Changes for Women-Owned Businesses