subscribe | advertise | about | contact | home

Women-Owned Business: Should Your Business Get Certified?
by Marianne Scholl

Women-owned business certification. That may sound like a dry subject to many of you, but if you own a business or are considering ever starting one, take heed. There is a lot you should know about the opportunities that come with formal recognition as a women-owned business.

Before we wade into the alphabet soup of acronyms for the various certifications and organizations that certify, let’s be clear about what certification is and what it can or can’t do for your business.

Certification as a women-owned business essentially lets others know that your company is what you say it is, a business owned and operated by a majority of women. For many businesses it isn’t necessary to have this stamp of authenticity. Clothing stores, hair salons or yarn shops, for example, sell directly to the public and have little need to prove who owns them. Some of their customers may patronize them because they like supporting stores owned by women, but chances are, not one of these shoppers would ever think to ask to see paperwork confirming that the store really is women-owned.

But what if Microsoft or the Washington State Department of Transportation is a potential customer? Like many government agencies and most large corporations, they have supplier diversity programs to ensure that women-, minority-, or disabled veteran-owned business enterprises are considered in their purchasing decisions.

Because they want to be absolutely certain that the businesses they assist through these programs are what they say they are, they require outside certification that substantiates a business’ ownership and operational claims. So if you offer goods or services to businesses, particularly if you already have corporate or government clients, certification might very well be for you.

Why All the Fuss?

Supplier diversity procurement started in the 1980s as a way to level the playing field in corporate and government procurement. It was intended to help small businesses and groups traditionally excluded from the infamous old boys’ networks that were once crucial to winning contracts. In 1994 the federal government established goals to include more small businesses, traditionally disadvantaged businesses and businesses owned by women, minorities and disabled veterans.

Because federal agencies failed to meet these procurement goals, in 2004 Congress passed additional legislation making these goals mandatory, holding the agencies accountable for reaching them. This means that certain federal agencies like the Department of Energy are now required to award a percentage of their contracts to businesses certified as owned and controlled by women.

Here in Washington, state and local agencies don’t have mandates. Although I-200, the anti-affirmative action initiative that passed in 2001, specifically outlawed consideration of gender (along with race, color, ethnicity or national origin) in the final selection and award of public contracts, there never were quotas for state purchasing procedures, according to Vicki Schiantarelli, the manager of the certification division at the Washington State Office of Minority and Women Business Enterprises (OMWBE). “It has always been illegal to have set-asides. That’s just one of those urban legends, along with crocodiles in Green Lake,” she says.

Her office was set up in 1983 to help minority- and women-owned and controlled firms provide goods and services to state agencies and educational institutions, and to help them participate in public works projects. It administers several programs, including minority business enterprise (MBE) and women business enterprise (WBE) certification programs, a directory of certified businesses, seminars and training sessions, a loan discount program, and a notification program to make sure OMWBE certified businesses are aware of public contracting opportunities.

But what motivates large corporations like Microsoft or UPS to make an effort to work with women-owned businesses? One simple reason is that supplier diversity goals get passed down the supply chain. Government agencies can help meet their diversity goals by showing that their suppliers subcontract with certified businesses, so it is in a corporation’s interest to invest in a supplier diversity program. Many, like Washington Mutual and Microsoft, turn around and ask their suppliers if they have made a similar commitment to working with diverse vendors.

Another reason is that corporations, like governments, recognize that hiring diverse suppliers helps build stronger local communities, and that by supporting small businesses they are helping fuel the engine that drives the nation’s economy. “Having a supplier diversity program is more than the right thing to do, it is the right thing for our business,” says Joe Coe, the supplier diversity manager at Starbucks.

Corporations are also interested in working with certified women-owned and operated businesses because they are finally waking up to the economic power of women, says Suzanne Lackman, co-founder and vice president of the ASTRA Business Alliance which provides national certification to women-owned businesses in the Northwest.

“Corporations have figured out that women make about 85 percent of all purchases of goods and services. And they realize that they are leaving money on the table if they don’t go work with women-owned businesses,” she says. “Women want to shop with corporations that shop with them and they want to invest in companies that invest with them.”

It’s Still Not Going To Be Easy

With corporate and government agencies vested in working with Women Business Enterprises or WBEs (the official term for certified businesses), you might get the impression that certification will send you on your way down Easy Street. Sorry, but despite the strong interest in working with WBEs, you are still going to have to sell something corporations and government agencies want to buy; you’ll still have to work hard to get noticed; and you’ll still have to offer good value for a good price.

“Certification is another arrow in your quiver,” says Lackman. “It doesn’t mean that once you become certified that corporations will come rushing and pounding on your door. You have to use it as a marketing tool.”

You can’t sit back and wait for the phone to ring, she says. “Network, network, network! Even though it’s the high-tech life we lead, it’s still the high touch that counts. Getting your self known and out in the community is crucial.”

Carolyn Crowson, the director of OMWBE, is continually surprised at how little networking aspiring companies do, even when they know it is important. “Networking is key. People continue not to do a good enough job networking. They don’t go to enough events, don’t get enough leads and they don’t follow up. I go to lots of events and only a handful follow up.”

This is why OMWBE and ASTRA Business Alliance both offer a lot more than certification and listing in WBE directories. They sponsor networking events and training seminars to help businesses get connected with corporate buyers and public procurement officers. Ideally, this combination of certification and networking will win you a connection with a supplier diversity manager who can act as your advocate within a complex corporate structure. They can introduce you and your company to the right people in the right department.

Certification is also important in government purchasing decisions, especially in the less formal buying processes for contracts from $3,000 to $35,000. At this level, state buyers need to consider three bids, and one of those bids has to be from a WBE if they can find one that is qualified. There is even more discretion for direct purchases under $3,000 and this is often a good place for WBEs to start proving themselves, says Schiantarelli.

“You still have to be competitive, but certification can push you over the edge,” says Crowson, who had extensive first-hand experience on the corporate side of procurement during her career in the banking industry prior to becoming director of OMWBE. “When you are in a competitive field where there might be 50 firms competing, your certification can get you on the bid list because there is a push to get one WBE on that list.”

Colie Hough-Beck, owner of the landscape architecture and urban design firm Hough Beck & Baird, says certification helped her establish her business back in the 1980s. “Initially it gave me an entry into landscape architecture and allowed me to establish relationships with other landscapers and architects that I still have today,” she says.

Her firm is now participating in King County’s Brightwater waste treatment project, thanks to an information fair for women- and minority-owned firms sponsored by King County. “We met other firms at the fair and ended up on a winning team,” says Hough-Beck.

Janet McKenna, owner of AB Window Cleaning which provides cleaning services for new construction and low- to high-rise buildings, says it was worth becoming certified, even though the work she has gained through certification represents only a minority of her business. “I think it’s worth the time to get your name out there and to let other women know that they can do it, too,” she says.

Now More Than Ever

Recent changes in corporate procurement practices have made certification more valuable, says Melody Christensen, the majority owner of FILTER/TALENT, a Seattle-based firm that provides temporary staff to companies needing designers, project managers and other creative talent. ”Certification has allowed us to get to know the corporate folks better at a time when they are trying to cut budgets and streamline invoices. Many are going to vendor management systems in which one vendor gets to fill all the jobs. Certification keeps us on the short list. Three years ago it didn’t matter so much, but now it does.”

Christensen says certification has allowed her to retain her business with corporations like Microsoft, Starbucks and Boeing even as they reduce vendors, but it has also opened the door to new contracts. She now provides staffing to Washington Mutual thanks to that company’s interest in working with WBEs.

Certification also opens the doors to strategic alliances with other WBEs, allowing you to go after larger contracts, says Diane McClelland, president of ASTRA. In addition, ASTRA is encouraging WBE-to-WBE business. “Essentially there are two markets (in the private sector), the corporate market and the WBE market,” she points out.

Which Certification?

Becoming a WBE can get you the contacts and visibility you need to be considered for contracts, so what does it take to become a WBE? In Washington State you have two options: certification through the state’s OMWBE, or national, third-party certification through Women Business Enterprise National Council (WBENC). The ASTRA Business Alliance is the WBENC (pronounced “we-bank”) partner for Washington, Oregon, Idaho, Alaska and Northern California, and it is through ASTRA that Washington businesses become “WBENC-certified.”

For the most part, eligibility requirements are similar. Both require that 51 percent of your business be owned and operated by a woman or group of women. They want to see proof that the management of the business rests in female hands as evidenced in bylaws, hiring/firing responsibilities and other decision-making roles. They also want to see control or ownership of the business based on loans, leases and contracts. In addition, the applicant must demonstrate the technical expertise needed to control the business in question and show that they are independent of male-owned businesses.

The certifications differ in that OMWBE certification is required for WBE consideration by any state agency in Washington. It is also the starting point for getting the DBE or disadvantaged business enterprise status that is required for federal projects. OMWBE certification is also only available for small businesses as defined by the Small Business Administration. For a sole proprietor, that means you can’t have a net worth over $750,000, excluding a primary residence.

WBENC certification, on the other hand, has no size limit and is recognized nationally by over 700 corporations. It does cost more, however; $350 per year versus the state’s $50 to $100 fee which is good for three years. Unlike OMWBE certification, WBENC certification works on both the regional and national levels, so registration in multiple states is not required.

While there is a tendency to look to state certification for businesses with the public sector and to WBENC for the private sector, it’s worth doing some research to see which certification prospective companies prefer. Most large corporations highlight their diversity supplier programs on their Web sites and have online registration for prospective vendors who are certified.

ASTRA’s Lackman recommends visiting these sites and researching a company’s requirements before contacting a supplier diversity officer. “It’s one of their pet peeves that people come to them without having done any basic research online,” she says.

The Sooner, the Better

Either certification process will take some work as you must gather the necessary documentation and fill out the paperwork. And then there is the turnaround time. OMWBE promises to turn around all completed applications within 45 days, while WBENC certification can take considerably longer, in part because it involves a site visit.

Because it takes so much time, don’t wait to get started, advises Carolyn Crowson. OMWBE has a help desk that can answer any questions you may have about the process. It can also give you information as you set up or expand your business. Because your financial structure can impact your status as a WBE, she advises thinking about certification criteria early on.

McClelland urges women business owners to get going because once they are certified, ASTRA can act as an advocate for them and create a buzz with other WBEs and corporate people. “We can take 18 months off your sales cycle by creating a road map on how to do business with large corporations,” she says.

Tanya Sugarbaker, who represents Stearns Financial Services and is an advocate for ASTRA and the Women’s Business Enterprise National Council, also urges companies to get started on the process. “The longer you wait, the more business opportunities you lose. That’s the bottom line,” she says.

Marianne Scholl, the publisher of this magazine, has WBE certification at the top of her list of New Year’s resolutions.

The ABCs of WBEs

WBE – Women Business Enterprise
The formal term for businesses certified as having 51% of their ownership and operational control in the hands of women.

OMWBE – Washington State Office of Minority & Women Business Enterprises
This office provides state certification to WBEs as well as training, support and a program for discounting business loans. www.omwbe.wa.gov or 1-866-208-1064

WBENC – Women’s Business Enterprise National Council
The largest third-party certifier of businesses owned and operated by women in the country. WBENC works with representatives of corporations to encourage the utilization and expansion of supplier/vendor diversity programs. Acronym is pronounced “we-bank.” www.wbenc.org

ASTRA – ASTRA Business Alliance
This organization is WBENC’s Northwest partner and oversees WBENC certification for businesses in Washington, Oregon, Idaho, Nevada, Alaska and Northern California. www.astrawba.org or 971-204-0220

©2006 Caliope Publishing Company