What Is a Certified Woman-Owned Business?
A certified woman-owned business is one that has gone through the application and approval process from an official certification organization. The most widely recognized certification is the Women-Owned Small Business (WOSB) certification, courtesy of the Small Business Administration (SBA). There’s also a subset of the WOSB known as the Economically Disadvantaged Women-Owned Small Business (EDWOSB), also issued by the SBA.
The difference between these two certifications largely comes down to the details of certain contracts. Some groups will grant top priority to an EDWOSB, especially if you run a business in a traditionally male-dominated industry. Businesses are allowed to apply for both certifications, and will even receive a small discount in fees if applying for both at the same time.
These certifications are considered federal designations because the SBA is a federal agency. So, if you’re applying for federal contracts or contracts through large corporations, then you can expect to need a WOSB or EDWOSB.
However, there are other certifications that may be just as useful to you if you’re planning to stay local. The National Women’s Business Enterprise (NWBE) certification may be accepted for a variety of private or municipal contracts.
The right one for your business will depend on the types of contracts you’re looking for. Businesswomen who want to stay in their community may not need a federal certification. It’s worth noting that every group that offers certification also offers additional business resources for women in their program, such as training opportunities, networking events, and notifications of relevant new projects in their industry.
Women-Owned Business Third-Party Certifiers
The SBA can issue a WOSB, but so can approved third-party certifiers. So far, the SBA has sanctioned the following organizations within the state of Massachusetts:
- National Women Business Owners Corporation (NWBOC): This organization aims to unite millions of women-owned businesses to advocate for the advancement for all.
- Women’s Business Enterprise National Council (WBENC): WBENC promotes diversity whenever possible and helps businesswomen become certified to go further in their careers.
- U.S. Women’s Chamber of Commerce (USWCC): This organization gives women in business the resources and work they need to grow in confidence and leadership.
- El Paso Hispanic Chamber of Commerce: This resource connects, advises, and coaches women business owners. It also advocates for female entrepreneurs and provides Minority Business Enterprise (MBE) and Women’s Business Enterprise (WBE) certifications.
These groups were all formed in an effort to give women a voice in a crowded economy. Some women in business find that going through a third party allows them to take part in a supportive group that will look out for new opportunities on behalf of them. Others would prefer to go directly through the SBA.
What Are the Qualifications to Become a Certified Woman-Owned Business?
The SBA sets the standards for women-owned businesses, regardless of whether you’re applying for a WOSB or not. In other words, all groups will have similar criteria, though each will have its own application and approval process. You’ll need to meet the following requirements for your company in Massachusetts:
- The company must qualify as a small business according to SBA regulations
- Women must own and control at least 51% of the company
- The business must be owned by U.S. women citizens
- The highest position in the company must be filled by a woman
- Women must be making both daily and long-term strategy decisions for the company
If you’re applying for an EDWOSB in Massachusetts, the business must meet all the WOSB criteria in addition to the following. The limits for each criteria apply to each individual woman business owner of the company:
- 3-year income average must be $350,000 per year or less
- The fair market value of all assets must be $6 million or less
- Total net worth must be $750,000 or less
There are certain exclusions for the income average and net worth of the business. However, the fair market value of all assets is non-negotiable.
The criteria for the NWBE will be similar and includes an on-site office visit. The certifier is essentially trying to establish that women are making the decisions that affect the long-term state of the business.
How Do You Become a Certified Woman-Owned Business in Massachusetts?
We recommend taking a preliminary test to determine your eligibility before you go any further. This will give you an idea of whether you qualify as a WOSB, which can make it easier to decide if you want to take the next official step. You can also check out the SBA's preparation checklist to make sure you have everything you need before applying. From there, you can decide which women-owned business certification to apply for, and who you would prefer to work through.
For example, some businesswomen may get more out of different local chapters in their community. If your company manufactures software and your local WBENC chapter is run by women in the tech world, then joining could be a lucrative decision for everyone. Call around to both the SBA and the different certifiers to tell them your story. All three approved certifier groups can issue the WOSB, EDWOSB, and the NWBE, so each can be the one-stop shop you’re looking for.
If you do choose to go through a third-party agency to certify, please note that you’ll still need to forward the certification to the SBA so it’s on file. Certification typically takes up to 90 days to finalize, though organizations may certify in as little as 15 days.
Fees will vary depending on the size of your business and which group you choose to certify through. Third-party certifiers tend to charge more than the SBA, though they may also provide more support during the certification process. If you’re applying for certain exemptions, it can be the key between approval and denial.
Please note that women-owned businesses will be allowed to self-certify through the SBA if they do so before June 30, 2020. After which, the SBA is changing its regulations to eliminate this option. You’ll either need to apply through a third-party or use the online program offered by the SBA.
If you choose the SBA’s Women-Owned Small Business federal contracting program, you can apply for certification through their online portal. The SBA application involves two steps:
- Visit sam.gov (the System for Award Management)
- It’s free
- You will have to wait at least 72 hours before step 2
- Visit certify.sba.gov and complete the form
SBA’s online program is free to use, though you will still need to pay the required fees if you’re interested in receiving an actual certificate through a third-party, since the SBA does not provide the certificate itself. A certificate is not required for federal government contracts — you only need to be officially certified and listed on their women-owned business database.
If you’re still unsure about the specifics of the SBA’s Women-Owned Small Business Federal Contracting Program, you can call (800) 827-5722 or email answerdesk@SBA.gov. To speak to a representative, be prepared to wait approximately 5-10 minutes for the automated message to end and depending on their call volume, you may have a longer wait.
Massachusetts Woman-Owned Business Certification Resources
Different states offer their own certifications for women-owned businesses primarily interested in state and local contracts.
Massachusetts Department of Transportation (MassDOT)
The MassDot offers a certification known as the Disadvantaged Business Enterprise (DBE). This is a national program offered through the Department of Transportation (DOT) but administered individually by all states. To apply for a DBE in Massachusetts, you must meet the following requirements:
- The firm must be for-profit and related to either transportation or a concession activity.
- All contract applications must be funded by either the Federal Transit Administration, Federal Highway Administration, or Federal Aviation Administration.
- Must be owned and operated by at least 51% women
- Must meet SBA’s criteria to qualify as a small business
Supplier Diversity Office (SDO)
The SDO provides its own Women Business Enterprise (WBE) for business owners who have their principal place of business within the state. To learn more about the WBE, you’re required to take a two-hour precertification workshop to understand the criteria, benefits, and application process. You’ll also learn more about the state’s COMMBUYS program, which can offer more opportunities for bidding on potential contracts. The certification process takes about 30 days from application to approval.
What Are the Benefits of Becoming a Certified Woman-Owned Business in Massachusetts?
Certifications are typically required if you’d like special consideration for certain contracts, which can ultimately give you a chance to make more money in your business. Your business name will be placed in a directory where interested agencies can find your company and verify your credentials. No matter which organization you certify through, there will be a variety of special interests that are looking to diversify their partnerships.
The U.S. government has pledged to give at least 5% of their contracting dollars to women-owned businesses per year, a promise that has led to billions of dollars being distributed to certified companies. However, it’s not just the U.S. government that seeks to work with female entrepreneurs. Both private and public businesses may seek women-owned businesses to expand their portfolio.
In addition, certification groups (whether state, federal, or national organizations) will offer their own benefits, including training seminars, educational opportunities, and networking events for women in business. These professional groups will also send out notifications based on new, relevant certifications for your company.
As for funding opportunity benefits though, the state of Massachusetts only offers priority financing as opposed to grant opportunities for certified WOSBs. However, there are national grants available for women for all 50 states, such as the Amber Grant as well as general grants offered through the SBA and a variety of other organizations. These grants promote small business owners who are making major strides in their local economy.
Female entrepreneurs have struggled in Massachusetts, and have unfortunately ranked low in terms of national growth. This has been largely attributed to the slow recovery after the recession. Getting the right certifications can be the key to leveling the playing field for all. While an official designation as a WOSB or WBE is no guarantee, it can give you extra leverage for opportunities that can boost your revenue and increase your economic standing within the state.