This article explains what women-owned small business certification is and how can a business run by a woman benefit from this federal program. Also, we provide an easy-to-follow step-by-step guide on how to apply for WOSB/EDWOSB certification.
What WOSB certification is, in the first place?
Our government currently runs a number of supporting programs to assists certain types of businesses in competing for federal contracts. Specifically, Women-Owned Small Business Contracting program targets as the name suggests businesses that are owned and controlled by women. In order to participate in this federal program, your business must be certified as WOSB or EDWOSB. We’ll get to the difference between the former and the latter shortly, and now let’s first define what a women-owned business is.
What is a women-owned business
The criteria are rather straightforward. For a company to be qualified as a business owned by women, it should meet the following requirements:
- Women (one or more) must control minimum of 51% of the company.
- The business must be qualified as small in its industry (see the NAICS classification here)
- Women in your company must both be in charge for long-term decisions and be involved in routine managerial or technical operations of the business.
What are WOSB and EDWOSB
When it comes to certification, WOSB and EDWOSB have some differences. As we defined above, WOSB stands for women-owned small business, and your company can apply for certification as WOSN at the SBA website. The same SBA Program also covers another category of businesses – Economically Disadvantaged Women-Owned Business, or shortly EDWOSB.
To get certified as a woman owned business, you need to provide enough evidence that your company is controlled and owned by women (solely or in cooperation with men).
To qualify as an Economically Disadvantaged Women-Owned Business, you should also prove that the business is controlled by an economically disadvantaged woman or women. This basically means that every female owner of the company must have her personal net worth, adjusted gross income and assets less than the SBA defined values:
- Personal net worth of $750,000 or below
- 3-year average gross income of $350,000 or below
- Personal assets of $6 million or below
In terms of benefits, both federal programs are basically similar. However, since EDWOSB companies automatically qualify for WOSB, but the opposite is not true, the number of EDWOSB companies is smaller and hence competition among them is lower.
What are the benefits of WOSB certification?
Let’s suppose you want to give it a try. So, what do you win if you are WOSB certified? Here are several advantages the female owned business certification grants to you.
Low-competition access to governmental contracts
To help woman owned business compete on the federal and state markets for providing their services and goods to the government, SBA limits the competition for WOSB/EDWOSB certified businesses, guaranteeing 5% of the entire federal contracting budget to such businesses. In practice this means women business enterprises receive great opportunities, fruitful contracts and long-term cooperation that can skyrocket your income.
Of course, the program limits the scope of industries the program covers to those where woman owned companies are underrepresented. You can check the current list of eligible industries here.
Woman owned business tax benefits
When female owners of businesses first dive into this matter, they expect some kind of tax remission for a WOSB/EDWOSB certified business. Unfortunately, even women-owned business certification cannot exempt from taxes. Taxes are uniform and obligatory for everyone. But even without direct tax benefits, applying for WOSB certification is worth the effort. And of course there are many state, regional or city-wide incentive programs offering some tax credits or other forms of tax exemption for a limited time. They are simply not women-specific.
Governmental and private grants
Being qualified as a certified women-owned small business may yield some fruit beyond the scope of the WOSB Contracting Program. Sometimes, governmental grants available at grants.gov explicitly prefer female owned business over others.
State and municipal authorities may also run their own women-owned business support programs, so it is worth checking at the corresponding websites for local loan guarantee programs, tax credits and grants.
Also, many privately-held companies offer incentive programs especially for women-owned small businesses. Such opportunities may result in anything from a simple one-time grant to a long-term partnership with a giant like Wal-Mart.
How to get a woman-owned business certified
As you see, women-owned small business certification is certainly am option you want to check out, as long as your business meets the requirements of the program. So, let’s formulate them clearer.
Women-owned business certification requirements
How to qualify as a woman owned business? The WOSB certification requirements are as follows:
- Being a small business
- Have SAM account
- Have DUNS
- Being a WOSB (as defined above)
- Being economically disadvantaged (as defined above)
Do you meet the requirements? You can certify now.
How to certify as WOSB
Two ways to be certified as a woman owned business
You can choose between two certification options if you want to apply for the Women-Owned Small Business Contracting program.
Self-certify
Login to certify.sba.gov, fill in the required forms and upload the documents. Make sure you have a proper DUNS number and the SAM account before proceeding with self-certification.
The advantage of self-certification as a WOSB or EDWOSB is that the process is free.
Third-party certification
There are a number (namely, four) third-party organizations approved by Small Business Administration for certifying businesses as either WOSB or EDWOSB. These are:
- El Paso Hispanic Chamber of Commerce
- National Women Business Owners Corporation
- US Women’s Chamber of Commerce
- Women’s Business Enterprise National Council
Each of these organizations takes a moderate fee (about $300-500) and certifies you based on the data you submit. Then, you can use this third-party certification as a proof at certify.sba.gov to apply for the WOSB contracting program.
The last organization (WBENC) deserves a bit closer look.
WBE certification
Aside from the standard WOSB/EDWOSB certification, Women’s Business Enterprise National Council also offers its own certification that is widely recognized nationwide by thousands of enterprises as well as by many federal, state and municipal agencies. Being a WBENC-certified WBE means your business gets access to the most prospective contracts a number of nationwide, state or citywide governmental or private organizations may offer.
The “WBE certified” status also allows you to cooperate with over 10k of other members of the WBENC community and purchase products, enjoy services or establish partnership under special conditions.
Is it true that applicants will receive a decision on the status of WOSB within 90 days of submitting a full application to SBA?
It is wonderful that organizations headed by women are being assisted at the federal level. Women’s companies find it really difficult to overcome competition in today’s world just because of gender specifics.