Benefits of Becoming a Women Owned Business
Running a successful business doesn't rely on the leadership of a man.
Although it's normal to think of the cliche image of a seasoned male entrepreneur at the helm of a Fortune 500 company, women are making a strong impact on the business world that makes way for tons of benefits.
It's estimated that more than 11.6 million firms in the U.S. are run by women, employing close to 9 million people. In 2017 alone, sales from women-owned businesses toppled $1.7 trillion, so needless to say, other women looking for ways to achieve their business goals can certainly do so!
To learn more about what opportunities a women-owned business can lead to, here are a few things to consider:
Getting WOB Certified Leads to Success
In 2014, the U.S. government gave over 250,000 contracts to women-owned businesses, equaling $2 billion. Leading into the present, the number of contracts has increased and more women than ever have the chance to land consistent high-paying projects.
However, before contracts can be obtained, you first have to gain a women-owned business (WOB) certification on federal and local levels.
What Does Certification Involve?
Essentially, the WOB certification process is made to increase the visibility of WOBs to generate a competitive marketplace and meet contracting and subcontracting goals for the government.
For example, there are two types of certifications that a WOB can apply for: a Women-Owned Small Business (WOSB) or an Economically Disadvantaged Women-Owned Small Business (EDWOSB). For either classification, being a part of the program gives government contracting officers the flexibility to allocate certain contracts for either WOSBs or EDWOSBs in order to meet a 5% goal of federal spending targeted toward WOBs.
How Do You Get Certified?
Luckily, the application process to gain certification is quite simple.
As of May 2019, the U.S. Small Business Administration (SBA) introduced a proposal to offer the application process for free online. Measures for the proposal are expected to pass by the end of July 2019, but for now, anyone interested in applying can follow this link to download the PDF and get started. Keep in mind, you must meet certain requirements to become eligible for the contracting program. To ensure that you meet the right qualifications for approval, here are some guidelines to follow:
Women-Owned Small Business (WOSB)
Must be a small business
• A woman must be a U.S. citizen and retain at least 51% ownership of the business
• Women employees must oversee daily operations and execute long-term strategies
Economically Disadvantaged Women-Owned Business (EDWOSB)
• Fulfill the same requirements above
• Run by one or multiple women who each have a net worth lower than $750,000
• Run by one or multiple women who each earn less than an adjusted growth income of $350,000 for the past three years
• Run by one or multiple women who each have less than $6 million in personal assets
The good news is that with either classification, you can start marketing your business as a WOB while your application is pending. Once you submit the paperwork and the SBA cross-checks your information with your tax returns, banking information, citizenship requirements, self-certification at certify.SBA.gov, and various agreements, you can start taking advantage of the many program benefits.
The Main Benefits of Gaining WOB Certification
For starters, the primary benefit for gaining WOB certification is that small businesses can perform within a level playing field.
The government restricts competition on various contracts so that women entrepreneurs have access to a portion of the profits, as opposed to a major company reaping all the rewards.
Along with being able to compete for federal contracts, there's also a variety of programs offered by the Office of Women's Business Ownership, which includes business training workshops, career counseling, access to research federal contracts, as well as opportunities to gain credit and working capital. These services are found at Women's Business Centers (WBCs) all over the country.
In addition, WOBs have direct access to SBA loan programs designed to increase working capital at a competitive rate in order to promote long-term growth. Not to mention, entrepreneurs can seek advice or general assistance through the National Women's Business Council, which has been a long-standing resource and advocate for women's rights and solving economic challenges.
Some additional benefits include:
• Mentorship programs
• Networking opportunities
• Assistance from purchasing agents
• Direct connections with buyers
• Subcontracting opportunities
• Educational training
• Inside access to bids and proposals
WOBs as a Cultural Movement
Not only do SBA benefits indicate the opportunities for success that women can find, but as a cultural movement, WOBs are showing strong signs of influence.
In a study by Harvard Business School in 2016, researchers examined the gender differences between male and female entrepreneurs to gauge their level of success and execution involving leadership. Interestingly enough, women outperformed men in two vital areas: overall vision and influence, and management operations. For the men, the only two areas where they succeeded were their comfort levels with uncertainty and their financial management. Overall, men were identified to be risk-takers by attempting to achieve aggressive growth in a short amount of time, which often leads to failure.
With that in mind, women value a mindset of collaboration that inspires other people to take action. Combine that with a balanced approach of steady growth and a strong work ethic, success becomes an obvious result.
Creating Equal Opportunities for Women
According to a quote from Karen Cahn, CEO, and Founder of iFund Women, she explains that "women aren't afraid of doing the work. They have grit and that's one of the key ingredients in running a successful business."
Throughout the U.S., more than 30% of private businesses are run by women. However, only 4% of them receive any type of small business loan, and just 3% of them receive financing from venture capital. There's certainly a need for change when it comes to creating equal opportunities for women entrepreneurs, and becoming a WOB puts that progress in motion.