Gender equality in the workplace has improved in recent years, but women are still far less likely than men to own a business. According to most estimates, women own around 30% of businesses in the US, which is far from ideal, but a big improvement from 1972, when that figure was just 4.6%. So, if you’re asking “how do I register as a woman-owned small business?”, you’re not alone.
There has arguably never been a better time for women-owned SMEs to thrive, not least because the post-pandemic era has opened new doors for small businesses. This guide will teach you about WOSB certification and how to complete your application in style.
An Introduction to Woman-Owned Small Businesses
The concept of a woman-owned small business isn’t difficult to understand; any SME with a female owner can be described as one. However, anyone who wants to know how to register as a woman-owned small business must consider what it means as far as the SBA is concerned.
Experts at LawInsider.com define a woman-owned small business as “a business concern which is at least 51% owned by one or more women, or, in the case of a corporation, at least 51% of the stock in which is owned by one or more women.”
Women-owned businesses can fall into two main categories: WOSB (Women-Owned Small Businesses) and EDWOSB (Economically Disadvantaged WOSB) ventures. Any female entrepreneur(s) wanting to gain this status must apply for it, showing that they meet woman-owned business requirements.
The process of gaining SBA certification for women changed in 2020 in line with the 2015 National Defense Authorization Act (NDAA). To become a WOSB, companies must meet the following criteria:
- Meet the SBA standards to be considered a small business.
- Have at least 51% of the company’s voting stocks held by one or more women.
- Have one or more women involved in managing the daily operations.
Meanwhile, an EDWOSB will meet all of the above criteria while additionally:
- Being controlled by a woman or women with personal net worth of less than $750,000.
- Having no owner with personal assets amounting to $6 million or more.
- Having owners with no more than $350,000 in adjusted gross income averaged over the past three years.
Why Apply for Woman-Owned Business Certification?
Appreciating the existence of WOSB companies is one thing. However, running a company is hard work as it is, so knowing the benefits of gaining woman-owned business certification should be high on your agenda. Of course, taking part in a movement working towards female empowerment is reward enough for many entrepreneurs. But the incentives don’t end there.
The federal government has set aside funds for at least 5% of all contracts to be awarded to registered WOSB companies. This is managed according to the monetary value of contracts, which means that some contracts are limited to bids exclusively from participants of the WOSB Federal Contracting program.
Moreover, a percentage of contacts is further limited to members of the EDWOSB program. The government is a huge potential client with massive budgets. As such, winning these contracts could transform the future of your business.
As well as the visibility to win contracts that large organizations would have previously won, members gain access to Mentor-Protégé Program and further networking and education opportunities provided by the Women’s Business Enterprise National Council. Of course, this can bring leads from other clients while also generally encouraging you to change your approach to business for the better.
How to Register as a Woman-Owned Business
When working out how to register as a woman-owned small business, you need to answer several questions:
- When can I apply for WOSB certification?
- Do I have all the papers needed for woman-owned business applications?
- How much does WOSB certification cost?
- Do I have to do anything to keep my WOSB status?
Female business owners can apply for certification so that they can gain government contracts for woman-owned business operations at any time of the year. Likewise, you can make your application as soon as you register the business and begin trading.
You can gain your certification through a designated third party or through the SBA directly. While they both deliver the same outcome, the self-certification process is free. As such, many business owners prefer this route.
Before applying, you should confirm that you meet the legal requirements for women-owned businesses. As well as the aforementioned features, the owners must not have been debarred or suspended from any federal entity. On top of this, the company must primarily do business in the US.
Assuming those criteria are met, the next step is to prepare all the papers needed for woman-owned business applications. You should have the items on the following checklist:
- The birth certificates, valid passports, or naturalization papers of the female business owner or owners.
- Documentation confirming the incorporation of the business, partnership, or venture agreement.
- Stock certificates or a stock ledger and assumed/fictitious name certificate.
- Personal tax returns for each woman business owner for three years. For EDWOSBs, tax returns from the owner’s spouse must be included too.
- Each woman business owner’s IRS Form 4506-T, Request for Tax Transcript. Again, owners of EDWOSBs must include their spouse’s relevant information.
Once you’ve gathered the necessary documentation, you can submit it to the relevant organization. As well as the SBA’s direct free online certification portal, you can use the NWBOC (National Women Business Owners Corporation), the US Women’s Chamber of Commerce, the WBENC (Women’s Business Enterprise National Council), or the El Paso Hispanic Chamber of Commerce (for South-West Texan businesses).
Furthermore, there’s MWBE (Minority & Women-Owned Business Enterprises), which has offered certification since 1998 and has a 99.9% success rate for applicants. This is open to minority business owners, women business owners, and minority women business owners.
While underrepresented for many years, minority female business owners are now the fastest-growing group of entrepreneurs, and opportunities are afforded to verified businesses through the SBA 8(a) Business Development Program, NASE (National Association for the Self-Employed) grants, The Amber Grant Foundation, and the FFF (Female Founders Fund), among others.
As for maintaining WOSB status, it’s necessary to complete an annual attestation that confirms your company still meets the regulations of 13 CFR Part 127. You also need to complete an assessment once every three years – this can be conducted by the SBA or a permitted third-party organization as detailed during the application process.
Extending your status in this way must be done within 30 days of expiration. Businesses can continue to apply for the appropriate contracts in their field as a result of this status for the duration of their membership.
How to Champion Women-Owned Small Business Operations
Whether you’ve gained women-owned business status or you’re in the process of completing your WBE certification application, you can play a big role in the community by supporting other WOSBs.
While there is still some work to go in the bid for an equal playing field, research shows that there are now nine female entrepreneurs for every 10 male ones. There are many ways you can support them:
- Celebrate other woman-owned businesses by leaving positive reviews, referring them to friends, and mentioning them on social media.
- Invest in other WOSBs and mentor up-and-coming female entrepreneurs.
- Join and create networking opportunities while also introducing female entrepreneurs to one another.
- Share your knowledge of SBA women-owned business certification to other female entrepreneurs beginning the process.
- Actively ask them how you can support their ventures.
By playing an active role in the movement, you will continue to create new opportunities for future female entrepreneurs. Better still, the contacts you make will look to actively support your brand too.
The Final Thought on Woman-Owned Business Certification
At the start of this guide, you wondered “how do I register as a woman-owned small business?” By now, we hope you have the answers you were looking for. Furthermore, you should now know the legal requirements for women-owned businesses and how to prepare the appropriate documents. Of course, you’ll still need to think about administrative issues like finding the best small business bank accounts. But those are all relatively minor details.
Embarking on this process means joining an amazing community of supportive female business owners while simultaneously increasing your hopes of securing lucrative contracts from the federal government’s designated WOSB-only contracts.