By Karen E. Klein Q: Is it worth the time to seek state or nationalertification as a woman-owned business? I have downloaded the form and information, but it'sconfusing. I also knowwomenwho got themselves certified -- and then said it did them no good. Can you explain the pluses and minuses? -- Y.D., Rochester, N.Y.
A: Woman-ownedbusiness certifications are granted by public and private agencies to outfits that can prove they areat least 51%-owned and -operatedby women. The certifications offer aseal of approval, showingthata company's claim of being woman-owned has been investigated thoroughly by an outside group and found to be true.Similar certifications are offeredfor minority-owned businesses.
Whether you should seek certification depends upon your target market, says Blanca Robinson, senior director of field operations for the Women's Business Enterprise National Council (WBENC), which bills itself as the nation's largest third-party certifier. For instance, if you are marketing your products or services to the general public, it's probably not necessary to become certified. But many companies find certification can give them an extra edge, which can be particularly helpful when facing off with larger competitors.
First, the drawbacks: Along withaprocessing fee that may range as high as $350, the certification process tends to bestringent, involving a lot of paperworkand even a site visit. There's no question that applying for certification"can be a daunting, time-consuming process," Robinson says. Heragency, and others like it, perform exhaustivedue diligence in order to weed out unscrupulous operators who would like togame the system by putting a female figurehead inan essentially male-owned and -operated concern, she says.
GOVERNMENT BUSINESS. Another wrinkle is that multiple groupsissue certifications. There's no single, agreed-upon certificateacceptedacross-the-board.Obtaining a woman-owned business certificate from one entity does not necessarily exempt you from having to qualify for another when doing business with a customer looking for a different one. Rather than applyto several different groups, and going through a long, costly process for each, a woman entrepreneur should investigate which certification is likely to be accepted by the majority of her potential customers.
When is it definitely in a woman entrepreneur's best interest to become certified?If she plans to do business with local, state, or federal government agencies, or subcontract withor supplycompanies that get government contracts.
Federal policy activelygives contracting preferences to small, disadvantaged, and woman-owned firms, and many state and local entitiesfollow suit.If your company wants tocompete for the more than $200 billion in goods and services that the U.S. government buys from the private sector each year,becoming certified -- while not legally required -- should open up many marketing advantages and business opportunities.
Contact the agencies you're interested in for information on their certification process. In New York, for example, you can apply for certification throughthe Economic Development Dept. (information is available at the site for Minority and Women-Owned Businesses .
"GREAT MARKETING TOOL." One option is to self-certifyyour business aswoman-ownedthrough the federal Central Contracting Registration site, which isusedby both federal agencies and large contractors that are seeking small-business partners.Download information on the certification programs offered by the U.S. Small Business Administration and the Transportation Dept.
Even if you don't plan to do business with the government, getting certified can certainly lendviability and credibility."Certification itself is not a guarantee of a contract, but certification is a great marketing tool for expanding your company's visibility among decision-makers," Robinson says. "Many corporations are strongly encouraging -- and a few are even mandating -- that women-owned businesses interested in securing corporate contracts become certified."
Karen Whistler, owner of Redi-Tag in Cypress, Calif., has been certified for seven years through the WBENC and says her office-supply manufacturing company is able to land contracts it otherwise might not because of the stamp of approval.
SALES BOOST. "Certification helps us compete against huge corporations like 3M (MMM), because our customers promote their diversity of their suppliers to the corporations they sell to," Whistler says. "That helps us geta level of exposure that would be difficult for us to reach alone." Some major companies set diversity goals, and certification is often something they use to sort the wheat from the chaff. "It's one more competitive advantage," Whistler says.
Wanting her firm, Hollister Construction, to be judged solely on its merits, company President Holli Dorr had always rejected women's-business certification. But one of her customers -- a Fortune 500 company -- requested that she get certified because they wanted 5% of their business to go to women-owned companies.After she did so last January, the customersent $6 million worth of business her way,doubling her company's annual sales volume.
Dorr has also been invited to join bid lists for large corporations such as Pepsi-Cola (PEP) and Pfizer (PFE). "It's been phenomenal for us," she says. "I was too proud to do this before, but once I got my ego out of the way,[certification] has given us opportunities wenever dreamed of."
NATIONAL EFFORT. Becoming certified by a private agency also typically gives you access to Internet databases, networking events, and directory listings that promote women-owned businesses.Private corporations are not mandated by law to do business withwomen-owned companies, but many feel it garners them goodwill with customers if they make the effort.The WBENC has become one of the most widely recognizedcertifications in the nation and is used by more than 700 major corporations. (You can visit its "Opportunities for WBEs" site , or call 202 872-5515 x20 for more information.)
A second private-certification organization to consider is the National Women Business Owners Corporation (NWBOC). NWBOC has launched a national certification program for women-owned and -controlled businesses as an alternative to the multiple state and local certifications required by many public- and private-sector agencies or prime contractors.More than100 private and public agencies now accept NWBOC certification. For more information, check out the nonprofit group's Web site , or call800 675-5066.
Have a question about your business? Ask our small-business experts. Send us an e-mail at Smart Answers, or write to Smart Answers, BW Online, 45th Floor, 1221 Avenue of the Americas, New York, N.Y. 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally. Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues