According to the National Women’s Business Council, there were just under 10 million women-owned businesses in the United States as of 2012, an increase of 27.5 percent since 2007. In addition, between 1997 and 2014, the number of women-owned businesses increased by 68 percent while, during that same timeframe, new businesses only increased by 47 percent.
A women-owned business is defined by the United States Census Bureau as one where women own at least 51 percent of the equity, interest or stock of a business. In an effort to encourage women-owned businesses in this country, many local, state and federal governments offer a certain percentage of business to those that are owned by women.
In order to participate in those programs, however, your company must be certified as a Women Business Enterprise (WBE). This guide is designed to help you achieve that certification, as the process can be time consuming and difficult.
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Becoming a WBE can be very time consuming and may sometimes be frustrating. The requirements for certification are fairly strict and all criteria must be met. Many of those who have been through the process say that it can be discouraging but that the benefits they have received once the process is complete are tremendous.
The most essential criteria to become a WBE is that a woman must own 51 percent of the company in order to qualify. However, the term ownership is more than just a percentage in order to become certified.0
In addition to actually owning a majority of the company, you must hold the highest position in the company and be active in managing the business on a daily basis. You must also have input into the strategic direction of the business, all of which must be documented, in writing, in order to achieve certification. In addition to being the primary owner of the company, you must also be a United States citizen. Also, she should have been in charge of the company for at least six months.
Once you are sure you meet these three main criteria, you may be ready to apply for WBE status.
The first step in starting the application process is to get organized. There is a long list of documents that must be provided to the agency that does certification for women-owned businesses. Some of the items that you will need to provide to the certifying agency are:
- The past two to three years of tax returns for your business
- Accounting documents such as balance sheets, profit and loss statements for the last three years, rentals, lease purchases or other funds borrowed over the past three years
- List of employees and their positions
- Copies of W-2 or 1099 forms for employees and you may be asked for payroll data as well
- Records of consultants used, contractors or other businesses used during the course of normal business that are not paid through regular payroll methods
If you are a sole proprietorship, you may not be required to provide as much information as you would if you own a partnership or corporation. Further information is available on what is specifically required for each type of business entity at the Women’s Business Enterprise National Council website.
The certification process can look daunting, especially since you will have to continue running your business while you work on certification. Many experts recommend seeking assistance to help you get your documents in order.
You can reach out to a local community college for an intern who can work with you to complete the certification process. There are also commercial entities available that you can hire to guide you through the certification process. There are kits available for a fee from the National Women Business Owners Corporation that provide extensive information on the certification process as well.
Becoming certified as a Women-Owned Business is necessary in order to accept jobs from some local, state and federal entities who offer jobs that are specifically for businesses owned by women.
Although the certification process may seem difficult, by keeping yourself organized and dedicated to earning certification, you may open many doors for your business that you would be unable to without becoming WBE certified.
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