Business Credit
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Women-owned businesses represent 42% of all U.S. businesses (about 13 million), have 9.4 million employees, and $1.9 trillion in revenue, according to the 2020 report from National Women's Business Council (NWB). In addition, the US Senate Committee on Small Business & Entrepreneurship states that there are now more than four million minority-owned companies in the United States, with annual sales totaling close to $700 billion.
If you're a business owner who happens to be a woman or a 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 or women-owned businesses.
By certifying yourself as a woman-owned or a minority-owned small business, you may have a greater chance of attracting and securing business projects. It also allows you to take advantage of programs that offer business funding, counseling, and networking opportunities.
Ready to become a certified minority-owned business? Here's what you need to know about the certification process and the eligibility requirements.
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, this third-party certification is your best bet since it covers all of 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 federal contracts.
To qualify as a woman-owned business (WBE), you must be for-profit and at least 51 percent women-owned and controlled. In addition to having majority ownership, female owners must also be responsible for the day-to-day decision-making and long-term direction of the company. Individuals who apply to be a women-owned small business also need to be U.S. citizens and have been in business for about a year before applying.
The certification 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 enterprise must be a for-profit 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, the 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 minority or women-owned 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 a business development program.
Finally, make sure you maintain your active registration 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. 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.
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