March is Women’s History Month in the United States, and in honor, we are sharing our top tips for women business owners! An increasing number of businesses are owned and controlled by women, commonly known as women-owned businesses or women business enterprises (WBEs), and are often eligible for specific certifications that can open doors to new opportunities.
State and Local Programs and Resources
There are many programs for women-owned businesses at the local, State, and Federal levels and within the private sector. The State of Ohio’s WBE program is designed to assist women-owned businesses in obtaining contracts for goods and services, construction, architecture, engineering, information technology, and professional services. (But, unlike the Federal government, as discussed more below, Ohio’s WBE program does not apply an actual procurement goal or set-aside target for state government contracts.) The principal requirements to obtain WBE certification from the State of Ohio’s Department of Development are:
- The business must be owned and controlled by a woman who is a U.S. citizen and has an established residency in the State of Ohio or a reciprocal state; and
- The business must have been in business for at least one year before applying for certification.
The benefits of certification by Ohio’s Department of Development are:
- Ability to apply for certification with reciprocal states and, after that, do business in those states as a WBE-certified business.
- Eligibility for open-market contracts.
- Access to Minority Business Assistance Centers and Procurement Technical Assistance Centers, which assist businesses with identifying federal, state, and local contracting and subcontracting opportunities.
- Access to free accounting assistance, structuring internal accounting systems, auditing management records, business plan development, technical advisory services, marketing plans, and evaluation of company operations and management processes.
- Access to business development organizations facilitating training, strategic management, networking, and mentoring opportunities with major corporations.
Municipalities also offer benefits to WBEs. For example, the City of Columbus’ Office of Diversity and Inclusion offers free WBE certification. When obtained, these certifications better position women-owned businesses to be awarded contracts by the City of Columbus.
Federal Programs and Resources
The U.S. Government aims to award at least 5% of all Federal contracting dollars to women-owned small businesses annually. (Unlike Ohio, the Federal government does have stated set-asides and procurement goals.) To be eligible, the business must participate in the Women-Owned Small Business (WOSB) Federal Contract program. The contracts set aside and awarded are generally for goods and services in specific industries (identified via NAICS code) where WOSBs are underrepresented. Some contracts are reserved for award to economically disadvantaged women-owned small businesses (EDWOSBs). To be eligible for the Federal WOSB Federal Contract Program, the business must:
- Be a small business according to SBA size standards (which vary depending on business and industry type);
- Be at least 51% owned and controlled by women who are U.S. citizens; and
- Have women manage day-to-day operations and also make long-term decisions.
Eligibility to be certified as an EDWOSB depends largely on the women owners’ net worth and annual income (along with meeting the other criteria described above).
Third-Party Programs and Resources
There are also third-party certifiers — such as the Women’s Business Enterprise National Council (WBENC) and National Women Business Owners Corporation (NWBOC) — who certify companies as WBEs on behalf of the private sector. Many private (i.e., non-governmental) businesses have policies to award contracts to WBEs. However, many private companies will require the WBE to be certified before awarding any agreements to the WBE, making third-party certification a crucial step when contracting with private companies that desire to award contracts to WBEs. The various third-party certifiers have similar required criteria:
- At least 51% ownership of the business by one or more women;
- Female management and control of the business;
- The certifier may provide that control can be either direct control or the ability to appoint the majority of the managers, officers, or Board of Directors;
- The highest defined title of the business is held by a woman and is outlined in the company’s legal documents, along with unrestricted female control of the business in legal documents and day-to-day operations; and
- Documented evidence of female capital contribution, industry expertise to the business, or both.
If you think your business meets applicable eligibility requirements to become certified as a WBE, there is little reason not to pursue such certification. Please get in touch with your Carlile Patchen & Murphy LLP attorney if you have any questions or would like assistance in determining your eligibility for certification and applying for certification.