Business Law: The Benefits of WBE Certification

By Nina L. Kaufman, Esq

What if you found out about a huge untapped market for your products and services . . . a market of at least $200 billion?  A market eager to find reliable women-owned businesses to work with?  A market that has regular needs?  A market unlikely to disappear anytime soon?  Wouldn’t that market be worth a look?

What is that market?  The Government.  That’s right, the Federal, State, and local governments and agencies across the country.  They’re looking for (more than just) a few good women-owned companies to meet their purchasing needs.  Laws have been enacted over the past 45 years that require government departments and agencies to ensure that a certain percentage of their purchasing (“procurement”) contracts go to women-owned businesses.  In addition, hundreds of national corporations are working to diversify their supplier base (known as “supplier diversity programs”) by identifying opportunities to do business with women-owned companies.  Your invitation to this prosperity party is known as Woman Business Enterprise (WBE) certification.

Public and private sector entities purchase a whole smorgasbord of goods and services.  Some of the items you might have heard of (or think of, when you hear the term “procurement”):   agricultural equipment, electrical cables, highway infrastructure, hospital construction, industrial machinery, mass transportation parts and accessories, plumbing fixtures, and waste treatment chemicals.  But did you know that billions of dollars are also spent on services?  Yes, services!  Like architecture and design.  Communications and media/PR.  Computer software consulting.  Data processing.  Human resources and employee training/development.  Marketing consulting.  Printing.  Real property rental/lease.  The Government and corporations are looking for women-owned business that can meet those needs.

And not men masquerading as women-owned businesses, either – like wolves in sheep’s clothing -- where the wife is the titular head of the company, but has none of the business expertise, makes none of the decisions, and gets none of the profits.  WBE Certification is akin to the UL® seal of approval for electric appliances:  the business has been “tested” and gives the purchaser comfort that a woman (or women) really does have the majority ownership and control of the company.  It’s not just any ol’ company that can say it’s woman-owned.  It has to prove it through an application process, administered by outside organization.  The proof is in the pudding . . . or the certification, as it were.  The beauty of WBE Certification is that . . .

The beauty of WBE Certification is that as long as a women (or women) owns at least 51% of her for-profit company and is the final decision maker, the business has met the minimum requirements for certification. 

Timing of, and details needed for, certification applications depend on whether you want to work with the government or with major corporations.  Private sector certifications can take as little as 60-90 days, as long as you have provided all requested information; government agencies can take longer. 

The benefits of certification are many.  Like other approaches to marketing, though, it’s not a “magic bullet” to riches.  Nor is it the right fit for certain businesses.  Here are some of the drawbacks:

·    Ownership is not the only criteria.  Residency, years in business, company size, number of employees, and profitability may affect whether a given government agency or corporation will certify your company as a woman-owned business. 

·   Certifications are not universally recognized.  In most cases, each of the Federal, State, and local governments has its own certification process and application, as do different agencies (such as Transportation, Health and Hospitals, Education, and Environment).  And these certifications may differ from the corporate certifications, which can vary from one corporation to another.  As a result, you may find yourself going through multiple certification processes in order to accomplish your goals and get on the right lists. 

·     Cost.  Many certifications require payment of an application fee.  Some certifications (depending on the certifying body) also have an annual “re-certification” fee that must be paid in order to remain part of the program.

·     Getting certified does not guarantee you contracts.  Getting certified gets you in the door.  Once you’re in the database, however, you need to market this certification, just as you would market to any other target customer base as part of your business development strategy. 

Still game?  Your local Small Business Development Center (see www.sba.gov/sbdc for an SBDC near you) or the Women’s Business Development Center (www.wbdc.org) should be able to give you more background information and point you in the direction of further resources.  For private sector/corporate opportunities, both the Women’s Business Enterprise National Council (www.wbenc.org) and the National Women Business Owner Corporation (www.nwboc.org) provide information and certification assistance. 

Happy hunting!

© 2004-2009 The Legal Edge LLC. Nina L. Kaufman, Esq. is an award-winning business attorney, author, and speaker. Under her Ask The Business Lawyer umbrella, Nina offers easy-to-understand business law resources that protect small businesses and save them money. To learn more, and receive our FREE "LexAppeal" ezine, visit http://www.GreatBusinessLawTips.com  or contact Contact Us. This article is for your general information only. Be sure to consult with an attorney regarding your particular situation to make sure you get the specific advice you need.

Nina Kaufman, Esq. Award Winning Business Lawyer, Author & Speaker