The BizFilings blog covering business tips and trends.
WBE Certification Advantages
Published on Aug 27, 2012
Read our article, 'WBE Certification Advantages' at 'Time to Start Up,' the small business blog by BizFilings.
While business has largely been a boy's club for the last several hundred years, more women than ever before are starting a business and planting their flag in the field of American enterprise. A recent analysis from Entrepreneur.com found American women are opening new businesses at the rate of 550 per day. Savvy business owners will use any tool available to expand their market and bring in new clients, and one way women entrepreneurs can achieve this is by certifying their company as a Women's Business Enterprise.
What is WBE certification?
WBE certification establishes that a woman or a group of women has a majority stake in a company. Organizations ranging in size from a tiny LLC to a major corporation can become WBE certified.
Certification began as a way to track where federal procurement dollars were going, according to the National Women Business Owners Corporation. Several decades ago, it was discovered that those dollars were almost entirely circumventing women-owned businesses, so rules were put in place to ensure those enterprises received a certain amount of business from government agencies.
The Equity in Contracting for Women Act of 2000 allows the federal government to set aside a portion of its procurement contracts for women-owned businesses if they are certified as such by a federal, state or local authority, or have other adequate documentation to prove their status as a WBE. Currently, the government has set a 5 percent target for WBE contracts.
What are the benefits?
A number of different organizations offer WBE certification around the country, and each one provides slightly different incentives, from access to educational services and procurement lists to regional awards and recognitions. Almost all the organizations, however, say WBE certification lends weight and credibility to a business, and the benefits of that are incalculable.
Something as basic as credibility can go along way toward developing a business, from increased revenue through greater contract volume to improved access to small business funding. Lenders and investors are more likely to fund projects and companies with a solid reputation, and WBE certification can help build that.
By advertising as a WBE certified business and utilizing some of the lead-generating information provided by regional and national certification organizations, women-owned businesses can expand in ways perhaps not possible without certification. As assets grow, so can the availability of asset-based financing options and loans from the Small Business Administration.
Other resources for women
Women just starting out in the business world can also utilize resources from the SBA to get themselves off the ground.