Being certified as a minority-owned, woman-owned or disadvantaged business is not beneficial for everyone, but for some businesses it has become necessary.
When a business applies for a Certification the business owner(s) is asking an organization or government agency to guarantee that the business and owner meet all the qualifications for being Certified. Certification by an organization/agency means they attest that a business meets the qualifications. The reputation of that organization/agency is on the line when they certify a business, so they will look closely at the credentials, records and claims. If they erroneously certify a business they will jeopardize their reputation and may be open to law suit or other legal penalty. So even though the requirements and attention to detail of a Certification process can be frustrating, it is necessary to guard the integrity of the certification and the certifying organization/agency.
Here are the typical requirements of a Certification:
- The business is 51% or more owned by the proper classification (Minority, Woman, or Disadvantaged Person).
- The Minority, Woman, Disadvantaged Person owner(s) made an investment to obtain his/her ownership in the business seeking Certification.
- The business is managed on a day-to-day basis by the owner(s) that is of the proper classification (Minority, Woman, Disadvantaged Person).
- The business is capable of providing the products and/or services it claims it can provide. This means the business has the proper license, equipment, people, training, building, vehicles or anything else that is necessary.
- If the Certification is for "disadvantaged" businesses the business owner must prove that he/she meets that organization's/agency's description of disadvantaged. This will include one or more of the following: personal worth under a specific level, race and/or gender, and location of business.
Certification is one of the best tools in a business's tool box or briefcase or purse. Here are a few reasons why.
Certification has become a requirement instead of just a competitive advantage. As attention to the use of M/WBEs (Minority/Woman Business Enterprises) and DBEs (Disadvantaged Business Enterprises) increases so does the number of businesses claiming one or more of those designations. The number of businesses claiming those designations has become so large that the government agencies and corporations usually require a Certification to verify that a business is truly an M/WBE or DBE. Federal agencies still do not require Certifications; however, they normally expect their Prime Contractors to use WBEs and DBEs as subcontractors and these Prime Contractors usually do require a Certification for their subcontractors.
Certification demonstrates that a business cares. Having a Certification is proof that a business is M/WBE or DBE. It is also proof that the business is willing to meet the requirements of a government agency, education institution or corporation. It shows that a business is likely to be a good vendor because it follows directions.
It is a badge to wear (display) with pride. Including Certification(s) on websites, business cards, brochures, digital information, etc. is a good way to demonstrate that a business meets that requirement. Certification is a qualifier, maybe a requirement, but it is not the only qualifier. Displaying it in the right places provides the information to those who need to know without seeming to say, "I expect your business because I am an M/WBE or DBE."
Being Certified may qualify a business for exclusive opportunities. Sometimes government agencies, primarily federal or state, will do "set-asides" for a specific Small Business classification. In those cases a business may be required to have a specific Certification to qualify.
Certification appeals to customers and clients. Even if a business provides products or services to individuals instead of government agencies and corporations, a certification may be helpful. Consumers may prefer a business because they know it is Minority or Woman Owned Business.
One thing that hampers Small Businesses is not having the right, or best, Certification. A business may think there is just one Certification. Or they assume that a Certification does not apply to them and do not do any research to find out. So a business gets one Certification when another one would have been more beneficial. This causes missed business opportunities. It is important to determine which Certification or Certifications will help. Following is some clarification about Certifications.
Most States offer some type of Certification for M/WBEs. Most State Certifications were developed primarily to identify qualified M/WBEs or DBEs for use by state agencies, and sometimes for local government agencies and schools, in meeting their spend goals. (Spend goal is the target percentage/amount of a government agency's or corporation's budget to be spent with a particular group, such as woman- or minority-owned business.) Some corporations will accept a State Certification, but most prefer a non-government Certification for meeting their own spend goals. A corporation that is a Prime Contractor for state agencies may prefer the State's Certification.
Most State DOTs (Department of Transportation) have their own Certification. The Certification offered by State DOTs is for DBEs (Disadvantaged Business Enterprises). The requirements for this Certification are specifically set to meet federal guidelines because DOTs receive much of their funding from the federal government. This Certification was expanded in recent years to include all state and local government agencies and departments that receive federal transportation funding and it was named the UCP (Unified Certification Program).
Some local government entities offer their own Certification. Some cities, counties and even universities or school districts conduct their own Certifications. Any business trying to sell to these entities needs to have the Certification of that entity.
Corporations often prefer private Certification. Most corporations prefer Certifications from national private organizations because the requirements are the same for each business no matter where they are located. There are Certifications for Minority Owned Businesses and for Woman Owned Businesses. These organizations normally offer their Certified businesses training and access to Corporate buyers.
Certification can increase opportunities. In tough economic times, every opportunity or advantage should be used.
Janet W. Christy is owner of Leverage & Development, LLC, a corporation that provides consulting, research and training to small businesses on marketing and certifications. She is the author of "101 Winning Marketing Actions for Small Businesses" and "Capitalizing On Being Woman Owned". More information is available at http://leverageanddevelopment.com.
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