Women: Certifying your business can land bigger, better contracts

By Joanna L. Krotz

If you're a woman running your own company, you're likely missing out on lucrative opportunities if you haven't yet become certified as a woman-owned and operated business.

Owners who have undergone the process report that certification definitely helps move the needle when selling their services and products. "It has opened doors with large corporations. And we think it has helped us locally and regionally," says Elaine Lyerly, who founded her Charlotte, N.C., marketing agency back in 1977, but only became certified in 2004.

This article seeks to help you get started in the lengthy certification procedure, as well as provide you some insider tips about how to leverage being a woman-certified company.

The value of becoming woman-certified

Basically, becoming woman-certified puts you into position to bid for big, long-term contracts from large corporations and/or from local, state and federal government agencies.

Certification is an acknowledgement (sometimes legally mandated) by vendors and governments that women and minorities have faced years of discrimination and must still jump higher hurdles in business. It's designed to expand "old-boy networks" and make the bidding and approval processes more transparent and fair.

As a woman-certified company, you pitch your value with the vendor's awareness that you're a "diversity supplier." That can help you get business in the form of measured "set asides," a percentage of contract awards earmarked for diversity or simply because of corporate policies. The work can be awarded directly to your company (so-called Tier 1 contracts) or you can become a subcontractor to other companies that secure such contracts (Tier 2).

"But certification doesn't give you anything in and of itself. Like any marketing tool, it's your strategy and plan that gets you the business," notes Sheila Murphy, chief operating officer at the New England Center for Women & Enterprise (www.cweonline.org), a group that provides certifications.

What certification can do is increase your chances of being in the room when the deals get done.

Why you need the certification edge

Some women owners sidestep certification because of a vague sense of pride or fair play, or a feeling that big markets aren't right for them.

If that's your take, consider that you are contributing to these jaw-dropping stats: Some 60% of Fortune 1000 companies spent $1 billion or more with outside suppliers in 2003, but women's businesses — on average — captured only a puny 4% of that market share, according to a study commissioned by the Women's Business Enterprise National Council (see below for more about this organization's certification work).

Yet those women's businesses that do target corporate markets receive nearly half their revenues (48%) from large corporate contracts.

"The importance of this market for women entrepreneurs is irrefutable," says Susan Bari, president of the Women's Business Enterprise National Council (WBENC), of the study. "Clearly, women business owners, regardless of the size of their firm, should not overlook the corporate market place."

How to get certified

There are various types of certification from different private organizations and public agencies. You'll need to research which ones will do your business the most good.

For instance, a municipal government certification might be best to target vendors in your community. A private nationwide certification would be best to target Fortune 1000 corporations. Plus, each certifying group has its own form and requires specific information and documentation. Be prepared. This can be a drawn-out process.

These are the main types of certification:

Private certification. Starting around 1997, two nonprofit women's business organizations created certification processes that are increasingly accepted by partner corporations and, more slowly, by some government agencies. The most prominent is the Women's Business Enterprise National Council (www.wbenc.org).Headquartered in Washington D.C., WBENC has 14 affiliates around the country. At last count, more than 700 corporate partners and a growing list of state and local government agencies had accepted its designation. "We are able to create access for our members because we partner with corporations that have goals of doing business with women. We can facilitate face-to-face meetings between women-owned companies and corporate partners," says Liz Cullen, regional director of the Women Presidents' Educational Organization (www.wpeo.us), a regional affiliate of WBENC.The other nationwide certifying group is the National Women's Business Owners Corporation (www.nwboc.org), an arm of the influential National Association of Women Business Owners.At these groups' Web sites, you'll find online applications forms, information and instructions. The certification process is based on proving, via documents and tax forms, that you're a viable, up-and-going enterprise 51% or more women-owned and controlled. Fees run about $300 and must be renewed each year. Many companies carry certifications from both groups.
State and local certification. Each state and dozens of counties and cities have their own certification procedures to support women-owned and minority-owned businesses. See your state's Web site to find out more or get in touch a local affiliate of one of the two women's groups mentioned above.
Federal certification. As you might expect, federal certifications can be more complicated. Generally, you don't need to become woman-certified to bid on a federal contract. But you may "self-certify," which can help.That means you "certify" that your business is woman-owned and run and list it for free, along with a company profile, in the U.S. Small Business Administration's procurement database. See the Central Contractor Registration site (www.ccr.gov) and FedBizOpps.gov, which has a guide to federal contracts for women. The FedBizOpps database is accessed by federal agencies and large contractors looking for small businesses to hire.Other federal certifications are more rigorous. The most well known, the 8(a) Business Development helps small, disadvantaged companies, typically minority-owned. "It's a tougher certification for women, but if you can show evidence that you were discriminated against because of gender — say, being in a male-dominated industry — then you might qualify for an 8(a)," says Murphy at the New England Center for Women & Enterprise.Similarly, a newer Small Business Administration program called Small Disadvantaged Business (SDB) offers assistance to socially and economically disadvantaged companies trying to land federal contracts. And the HUBZone Empowerment Contracting Program gives contracting preferences to small businesses in underutilized or underdeveloped urban and rural areas. Visit the Small Business Administration Web site (www.sba.gov) to learn more.

How certification has ongoing value

Atlanta-based Management Decisions, a woman-owned consulting and staffing business founded in 1988, has been certified for five years, and it's made a significant difference, says vice president Brad Mencher.

"We bring up certification early in the sales process and it's a means of gaining access," he says. "But it's independent of the presentation made to the client by our account executive."

As Management Decisions expands its presence into Dallas, being woman-certified has proven valuable, Mencher adds. "Our first phone call was to the WBENC affiliate to get advice and information about the market," he says. "We will attend some matchmaker meetings with local companies and we'll get help about which businesses to target.

Overall, he adds, "certification greases the wheel. It helps us break into accounts."