The Advantages of Certifying Your Business
As supplier diversity programs continue to grow in number and scope, certification programs for vendors and potential partners continue to diversify. Socially responsible corporate and government leaders strive to level the playing field when it comes to business opportunities, supporting companies whose owners belong to certain underrepresented groups — women, veterans, minorities, LGBTQ entrepreneurs, etc. — as they compete for business.
Business certifications help organizations quickly identify diverse suppliers, defined as businesses that are at least 51% owned and operated by an individual or a group that is part of a traditionally underrepresented or underserved community. That can be a real advantage for diverse companies, which may benefit from certifications in a number of ways:
- Gaining access to government contracts and private-sector opportunities that have been set aside for businesses with required certifications
- Becoming part of exclusive networks that may lead to new business relationships, partnerships and mentorship opportunities
- Qualifying to tap into resources and participate in support programs provided by the certifying organization — programs providing management and technical assistance, for example
Women-Owned Business CertificationsIf your business is majority-owned and operated by a woman or women who are U.S. citizens, then you may pursue these certification options: WOSB or EDWOSB. The U.S. Small Business Administration (SBA) Women-Owned Small Business (WOSB) certification allows certified businesses to compete for federal contracts set aside for WOSB companies (the government aims to award at least 5% of federal contract money to WOSBs). SBA’s Economically Disadvantaged Women-Owned Small Business (EDWOSB) Certification, which adds personal financial qualifications related to the business owner(s), may qualify the certified business for additional opportunities.
You may apply for this certification directly through SBA or through one of its approved third-party certifiers: El Paso Hispanic Chamber of Commerce, National Women Business Owners Corporation (NWBOC), U.S. Women’s Chamber of Commerce or Women's Business Enterprise National Council (WBENC).
WBEWBENC and NWBOC also offer companies the opportunity to apply for Women’s Business Enterprise (WBE) certification. This private certification is designed to help women-owned businesses grow through private-sector opportunities. Minority-Owned Business Certification The National Minority Supplier Development Council (NMSDC) grants Minority Business Enterprise (MBE) certifications to firms that qualify. This certification connects businesses to more than 1,400 large corporate members of NMSDC (potential buyers) as well as the other 12,000+ businesses currently certified through this program. To qualify, a small business must be at least 51% minority-owned and operated, with “minority” defined as a person who is at least one-quarter Black, Hispanic, Native American or Asian.
8(a) Small Business CertificationFirms that are majority-owned and controlled by an individual or individuals who qualify as socially and economically disadvantaged under SBA guidelines may apply for 8(a) Small Business Certification. The federal government sets aside at least 5% of federal contract money for 8(a) businesses. You may apply for certification at certify.sba.gov.
Veteran-Owned Business CertificationVeterans of the U.S. Armed Forces can apply for certification through the government-sponsored Vets First Verification Program, which grants majority-veteran-owned/operated companies access to certain federal contracts set aside for veterans. Two certifications are available: Veteran-Owned Small Business (VOSB) and Service-Disabled Veteran-Owned Small Businesses (SDVOSB).
Vets can also be certified for private-sector opportunities, by the National Veteran-Owned Business Association. The association’s Veteran’s Business EnterpriseTM (VBE) and Service-Disabled Veteran’s Business EnterpriseTM (SDVBE) certifications enable corporations to proactively source businesses that are at least 51% owned, operated and controlled by U.S. military veterans.
This private certification program of the National LGBT Chamber of Commerce (NGLCC) supports businesses whose owners are members of the LGBTQ community. Becoming a Certified LGBTBE allows U.S. companies that are at least 51% LGBTQ-owned, operated, managed and controlled to compete for sourcing contracts with NGLCC corporate and government partners, who have targeted amounts for spending with diverse business enterprises.
LGBT Business Enterprise® Certification
HUBZone Business CertificationIf your small business’ principal office is located in a historically underutilized business zone (HUBZone) and at least 35% of your employees live in that area, you may qualify for HUBZone certification. The HUBZone program, administered by SBA, sets aside at least 3% of federal contracts for companies in these areas. Certifying your business under any of these or other certification programs may help you position your company for growth. Each program has its own criteria, processes and fees for application, so consult with the certifying organization for complete information.
This article is for general information purposes only and is not intended to provide legal, tax, accounting or financial advice. Any reliance on the information herein is solely and exclusively at your own risk and you are urged to do your own independent research. To the extent information herein references an outside resource or Internet site, Dollar Bank is not responsible for information, products or services obtained from outside sources and Dollar Bank will not be liable for any damages that may result from your access to outside resources. As always, please consult your own counsel, accountant, or other advisor regarding your specific situation.
Posted: October 20, 2022