Is a Woman-Owned Business Certification Right for You?

Woman smiling and holding a laptop as she walks around in a resource center.

Woman-owned Business Certification is an important option to consider for female entrepreneurs looking to scale their companies — particularly for those who want to do more business with the federal government or corporate America.

While its benefits are abundant, certification is not the most straightforward process — you have to meet specific qualifications and fill in a lot of paperwork. As a result, certification isn’t the right path for every business.

We’ve broken down the pros and cons of certification so you can decide whether or not it’s right for you and your business.

WOSB and WBE Certification

Women-owned business certification can offer many benefits to small business owners. We'll help you determine whether the process is right for you. You can also check out our comprehensive guide on how to become a certified woman-owned business.

What Is Woman-Owned Business Certification?

Certification means your business has been verified as a majority woman-owned and run business by a trusted certifying agency, and will consequently be put on a list of businesses that contract with local government or corporate projects.

The main certification program for women-owned businesses seeking to increase their growth is Women-owned Small Business (WOSB), run by the Small Business Association (SBA). There is also a subset of the WOSB program: the Economically Disadvantaged Women-Owned Small Business (EDWOSB) certification. Both are nationally recognized certifications that facilitate access to federal contracts “set aside” specifically for WOSBs in underrepresented industries, providing opportunities for women-owned businesses.

Alternatively, business-owners have the option of using one of the four SBA-approved third-party certifiers — the National Women’s Business Owners Corporation, the Women’s Business Enterprise National Council, the U.S. Women’s Chamber of Commerce, and the El Paso Hispanic Chamber of Commerce.

Qualifications vary depending on the certification for which you apply. So here are the general requirements for the women’s contracting program, according to the SBA website. Your business must adhere to the following guidelines to become a Women-Owned Small Business (WOSB):

  • Qualify as a small business as per the SBA small business size standards, which generally use employee size and/or revenue as measures.
  • Be at least 51% owned and controlled by 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.

The full rundown of qualifications is available online in the Code of Federal Regulations. There is also the option to get a preliminary assessment by the SBA’s Certify website to see if you’ll qualify.

Is Woman-Owned Business Certification Right for You?

While certification can be a game-changer for some businesses, it is not useful for companies in every industry. On a logistical note, the process of procuring certification isn’t exactly straightforward either.

Preparation varies depending on which certification you intend to apply for, but generally you will need to gather and upload/mail a slew of documents for your company to fulfill the application requirements.

You will also need to review legal and financial information, especially legal documents (i.e. bylaws, Operating Agreements, etc.) to make sure you can prove woman/women ownership and control. It’s not a quick process, and can take up to 90 days from when your paperwork is received to receive a response.

Additionally, applying for certification is not free. Depending on the size of your company and the type of certification, you will have to pay a fee ranging from around $350 to $1,250 depending on the size of your business/revenue. Although it can cost nothing for businesses that are already members of certain certification agencies.

Finally, it’s important to emphasize the potential logistical annoyance of certification renewal. Certification is not for life, so you will have to apply to renew every year and pay a non-refundable processing fee (varies by agency). Thankfully, most certifying agencies will send you an email reminder a few months beforehand and the process is much simpler than the initial application.

While these steps may sound off-putting, it is more than worth it for many businesses looking to scale or increase business opportunities. Let’s dive deeper into exactly which companies do and don’t benefit from certification.

Why You Should Apply

There are many benefits of becoming a Certified Women-Owned Business, starting with the fact that you’ll have increased contracting opportunities with major corporations and the government. The U.S. government has a concrete goal of awarding “at least five percent of all federal contracting dollars to women-owned small business as a result.” Certification allows you the opportunity to access billions of government dollars set aside specifically for women-owned businesses.

As a certified woman-owned business, you’ll also get access to unique resources like regional and national events, webinars, training, and business expos, as well as inclusion on a database which includes thousands of certified women business enterprises.

Different certifying agencies also have different unique benefits. For example, third-party certifying agency, the WBENC, lists specific benefits like access to supplier diversity and procurement executives, formal and informal opportunities to pursue business deals with National Corporate Members, capacity development and promotion, among others.

Ultimately, certification doesn’t just bring more business opportunities directly through contracting, but through networking and mentorship as well.

Certification is particularly beneficial for businesses in industries that typically contract with the government and maybe already work with corporate or government clients (e.g. construction services). The SBA has an entire list of eligible industries on its website. If your business fits into this category then you will almost certainly get your money’s worth out of becoming certified.

Many female-owned businesses report growth post-certification. For example, Great Lakes Women’s Business Council founder Michelle Richards said that most women in Michigan have grown “significantly as a result of certification,” averaging $12.6 million in sales annually and 40 employees.

Why You Shouldn’t Apply

Now you know when it makes sense to apply for certification, but when shouldn’t you apply? As we’ve already established, the process of applying for certification alone can be a big turn off, though ultimately it’s worth it for many businesses to trudge through.

For others, however, the pros do not outweigh the cons of gaining certification. “Remember, as well, that simply getting certified as a woman-owned business isn’t a guarantee you’ll get new business,” writes Accion, the nation’s largest non-profit lender. “Yes, it can open doors for you, but you still have to do the work, promote your company, and follow through to close the sale.” If that doesn’t sound like your cup of tea, it’s not worth applying for certification.

Furthermore, considering the fact that certification increases contracting opportunities with the government and some local corporations, there are many businesses and industries that simply won’t click. If you run an online clothing store, for example, certification probably won’t match you up with many more contracting opportunities than you’d be able to find on your own.

Before you apply, think long and hard about whether or not there is demand in this specific arena for your goods or services. Certification isn’t a magic button anyone can press and suddenly find more business opportunities.

If certification just isn’t worth it for your business, there are many other resources you can use to facilitate growth. For financial support, you can take advantage of the many grants available specifically for women-owned businesses, such as WomensNet’s monthly grant.

Alternatively, if you’re enticed by the potential of an expanded network that certification offers, you can join female-only communities or attend networking events. Finally, you can access many of the mentorship or capacity development programs that certification comes with by taking advantage of other government resources through organizations like the National Women’s Business Council.

Become a Certified Woman-Owned Business In...

You Might Also Like...