Woman Owned Small Business Certification — What is it + do I need it?

It is certainly an exciting time to be a female entrepreneur. According to the National Association of Women Business Owners, there are more than 12.3 million women-owned businesses in the US, compared to 402,000 in 1972. Even more exciting—women are starting new businesses in droves. Pre-pandemic, women started a net total of 1,821 new businesses every day—EVERY DAY! And if you are or are aiming to be part of this incredible trend, we highly recommend that you certify your company as a woman-owned business. Certification offers incredible opportunities to help your business thrive such as obtaining funding, mentorship or partnership opportunities, or selected for lucrative contract work. Simply put, certification can help create a more equitable marketplace for women-owned businesses, both in the government and private sectors. 

What Are Qualifications for Certification?

You may be thinking that your business is already doing well and growing exponentially, do you really need this certification? Or, you may just be starting out and already have all the funding you need, do you need it? Our answer? An emphatic—YES! If you and your company meet the following criteria, start the registration process now! Initial requirements include:

• Qualify as a small business as per the Small Business Association (SBA) small business size standards, which generally use employee size and/or revenue as measures.

• Be at least 51% owned and controlled by a woman or women who are U.S. citizens.

• Be managed by women on a day-to-day basis. Women must also be the ones making long-term decisions for the company.

• The highest officer position in the company must be held by a woman on a full-time basis, during normal work hours.

Alright! You meet the requirements! Ready to get that certification? Well to be clear, there are actually a few different ones and you will probably need to do some research to determine which one serves you best.

Deciding on the Right Certification for Your Business 

First, you need to determine which certification agency meets your business goals. 

Certification is obtained either from the SBA or the Women’s Business Enterprise National Council (WBENC), awarding the Women-Owned Small Business (WOSB) certification and the Women’s Business Enterprise (WBE) certification, respectively. Additionally, there is also a subset of the WOSB program: the Economically Disadvantaged Women-Owned Small Business (EDWOSB) certification. To qualify as an EDWOSB, your business must meet all of the conditions of a WOSB as well additional economic requirements:

• The business owner’s personal net worth must be less than $750,000, 

• adjusted gross income average over three years must be less than or equal to $350,000. 

• The fair market value of all assets must be $6 million or less.

Both WOSB and EDWOSB certifications provide direct access to federal contracts and regional or local partner programs set aside specifically for WOSBs in underrepresented industries. Specifically, the SBA devotes at least 5% of its total contracting dollars to businesses run by women.

The main difference between WOSB and WBE certifications is that the WOSB certificate is required for federal programs and contracts and is financially focused, while the WBE certificate is accepted by private companies and some government agencies. The WBE can certainly connect you with corporate contacts for potential contract opportunities, but the main benefits are more intangible, including: 

• Access to successful entrepreneurial mentors

• Management and technical education 

• networking 

Ultimately, the best way to decide which certifying agency is right for your business is to do your research and see if one offers a particular benefit to your company to grow your business. And don’t forget to research your potential customers too! They might require a specific certification. 

Get Certified

By now, we hope that if you are a business owner (or on your way to being one), you’ve decided to get certified. The process is thorough and can feel a little labor intensive, but trust us, it’s worth it.

WOSB Certification

First, register on the System for Award Management (SAM) website. This makes you eligible to bid for government contracts, and the SBA will pull from your SAM profile when assessing your application. Next, you’ll have the option to either self-certify or go through a third-party organization. For self-certification, check out this handy checklist. Alternatively, you can apply to be certified by one of four approved third-party certifying agencies.

WBE Certification

The WBE certification process is similar to the SBA process, sharing the same general criteria. A full list of documents can be located online. WBENC suggests considering the following questions before applying for certification:

• Is your product/service targeted at corporations, retail, and/or government agencies?

• Does your business have the capacity to provide quality service/products on large contracts?

• Are you willing to share all the sensitive details and documents related to your business?

• Do you understand that WBE does not guarantee that you'll receive corporate, retail, or government contracts?

Whewwwww…that was a lot. And it’s just the tip of the iceberg. You can probably tell we’re excited about this. We’re also very excited to support women-owned businesses. So don’t forget- Tag us! As moms, business leaders, entrepreneurs, we are one bad-ass community. So let’s do what we do best- support one another. Check out all of the woman-owned businesses in our HeyMama community!