Being certified as a woman-owned small business in the U.S. can give you additional support and help your business grow.
If you’re not a fan of federal government jargon and text-heavy websites —we hear you! This guide will talk you through the process and help you tell your WOSBs from your EDWOSBs.
Read on to determine if you qualify, what the benefits are, and how to get your business certified.
What Are the Advantages of Being Classified as a Woman-Owned Small Business?
The U.S. government aims to award at least 5% of all federal contracting dollars to women-owned small businesses each year. Despite setting this modest target over 20 years ago, the Small Business Administration (SBA) has only started hitting it recently: so far, once in 2015 and again in 2019. There is work to be done to level the playing field for women in business.
To create positive change, the SBA offers additional help to small businesses it defines as woman-owned. As a certified woman-owned small business (known as a WOSB), you can access resources like training, business development advice, and government loan programs.
To help the SBA reach its 5% target, you can also access federal contracting “set-asides” —federal contracts ringfenced for WOSB in industries where women are underrepresented. Here’s an up-to-date list of those industries, organized by their North American Industry Classification System (NAICS) code.
What Are the Eligibility Requirements for a Woman-Owned Small Business?
To qualify as a WOSB, your business needs to meet the following criteria:
- Your company needs to qualify as a small business by SBA standards. Either the number of employees you have and/or your annual revenue will determine this. Classifications vary depending on what industry your business is in, so you may need to check your NAICS codes and look at the SBA’s table of size standards. You can find out more about small business classification in our helpful article here.
- Women with U.S. citizenship should own at least 51% of your company.
- Women must be managing day-to-day operations within your business, making long-term decisions for your company, and work at the business full-time within regular working hours.
If you’re a woman-owned small business that’s classed as being at an economic disadvantage, you might also qualify for additional support . This is known as an economically disadvantaged woman-owned small business (EDWOSB).
The Federal Government will class you as an EDWOSB if you demonstrate the following points:
- Your net worth is less than $750,000 (this total doesn’t include personal retirement accounts).
- Your adjusted gross income averaged over three years is $350,000 or less (with some exclusions).
- The fair market value of all assets is $6 million or less.
How Do I Get Certified as a Woman-Owned Small Business?
Before you can start applying for federal contracts or loan programs, you’ll need to get your WOSB certification.
You can do this in one of two ways: self-certification, which you do yourself via the SBA website, or third-party certification, where another body completes the process for you.
You can now apply for registration as a WOSB or EDWOSB on the SBA website. This certification process is free.
You’ll need an active Status Award Management (SAM) registration and these documents:
- Birth certificates, naturalization papers, or unexpired passports for each woman business owner.
- Articles of organization/incorporation, partnership or joint venture agreements, voting agreements, and any amendments to these documents.
- Issued stock certificates and stock ledger.
- Assumed/fictitious name certificate.
- There are three most recent personal tax returns, including W-2s and all schedules for each woman business owner and her spouse (for EDWOSB).
- IRS Form 4506-T, Request for Tax Transcript for each woman business owner and her spouse (for EDWOSB).
If you’re applying for EDWOSB certification and have an 8(a) certificate for economically disadvantaged individuals, you can upload this and your annual review letter instead of the financial statements above.
And if your firm is certified by the U.S. Department of Veterans Affairs Center for Verification and Evaluations (CVE), you can apply too, providing you meet the eligibility requirements.
If you’re short on time or resources, you can apply for WOSB and EDWOSB certification through these third-party certifiers (known as TPCs). Requirements and fees will vary depending on the organization you choose:
- El Paso Hispanic Chamber of Commerce (EPHCC)
- National Women Business Owners Corporation (NWBOC)
- U.S. Women’s Chamber of Commerce (USWCC)
- Women’s Business Enterprise National Council (WBENC)
Once you’re certified, all you need to do is upload your certificate and joint venture agreement (if required) to the SBA website.
Should I Get Certified as a Women-Owned Small Business?
The short answer is — yes! If you fulfill the criteria, there’s nothing to lose and everything to gain from registering and taking advantage of the resources available to you. Self-certification is free, so it needn’t cost you a cent, and you can enjoy access to loan programs, training, and the WOSB federal contracting program.
Article by Penny Brazier
Olly Olly is a resource for business owners who could use the occasional hint and helping hand in their digital marketing.
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