A Great Way to Give Your Small Business an Edge
Certification programs can help you land government and big-business clients
Gwen Moran is a small business authority and author of The Complete Idiot’s Guide to Business Plans.
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Small-business certifications and verifications confirm a company's status, like whether the principal owner is a minority group member or whether the firm is located in an economically disadvantaged area. These official designations, which require rigorous applications and documentation from entrepreneurs, can help land government and big-business contracts that are available only to small businesses that have been deemed eligible.
Major U.S. firms are already zeroing in on these "supplier-diversity initiatives," programs that encourage corporations to do more business with qualified small companies. Case in point: Ford just set an in-house record for buying goods and services from businesses owned by minorities and women.
"When federal contracts get into the hands of small businesses, it is a win-win for the federal government, small businesses, the economy and the job market," says John Shoraka, associate administrator for government contracting and business development at the Small Business Administration.
Here are some of the major federal certification and verification programs, along with links to the government or third-party agencies that oversee them. (Pardon all the abbreviations — hey, it's the government):
Women’s Business Enterprise (WBE)
What it means: One woman (or more) is the owner or majority stockholder and the company's management and day-to-day operations are run by a woman.
What the certification offers: Special access to mentoring and other resources, as well as business leads through the leading third-party certifying organization for women's business enterprises, the Women’s Business Enterprise National Council. You must submit an application and meet with a certification representative to be approved for the WBE designation.
For more information: The Women's Business Enterprise National Council
Minority Business Enterprise (MBE)
What it means: The business is at least 51 percent owned and operated by minorities, including African-Americans, Asian-Americans, Latinos and Native Americans. MBE certification is overseen by the National Minority Supplier Development Council (NMSDC) and is based on a rigorous combination of screenings, interviews and on-site visits.
What the certification offers: Certified MBEs are listed in the NMSDC’s database, which helps businesses market themselves to a wide network of national and international corporations. This certification also provides companies with access to training, business fairs, loans and other benefits.
For more information: National Minority Supplier Development Council
Veteran-Owned Small Business (VOSB)
Service-Disabled Veteran-Owned Small Business (SDVOSB)
What it means: A VOSB is at least 51 percent owned and operated by one or more eligible veterans. A SDVOSB is at least 51 percent owned and operated by one or more disabled veterans (or in the case of a veteran with a permanent and severe disability, a spouse or primary caregiver).
What the verification offers: The Veteran’s Administration maintains VetBiz.gov, a database of VA contracts available to verified businesses. To apply, the business owner must have Department of Defense Form 214 (otherwise known as a Certificate of Release or Discharge From Active Duty) and, for SDVOSB verification, an adjudication letter from the VA confirming the service disability.
For more information: Department of Veterans Affairs
8(a) Business Development Program
What it means: The company is located in an economically disadvantaged area or owned by someone who has suffered financial hardship. Generally, the firm must have been in business for at least two years.
What the certification offers: SBA support, including mentoring, procurement help and financial assistance. To become 8(a) certified, you must complete an SBA application, then your company must be approved by the agency.
For more information: Small Business Administration