How to Earn Women- and Minority-owned Business Certification
Navigating the Process
By Jennifer Sharrow, Esq.
Women- and minority-owned businesses play a vital role in our local economies. They also play a larger role within communities in general — they serve as gathering places, education centers, and inspiration for future generations of entrepreneurs.
But, much like they represent our community, often largely by reason of the makeup of their ownership, they face challenges of historic and continuing discrimination. This can result in issues with access to capital, less favorable terms in negotiating contracts, and challenges finding suitable office or commercial spaces.
Formal certification as a woman- and/or minority-owned business can help alleviate some of those burdens. There are a number of different organizations that provide this certification. The state of Massachusetts has the Supplier Diversity Office; the U.S. Small Business Administration has the 8(a) Business Development Program and the Women-owned Small Business Federal Contract Program; and there are a number of private groups that issue certifications and provide other support, such as the Women’s Business Enterprise National Council and the National Minority Supplier Development Council.
Jennifer Sharrow
“Our women- and minority-owned businesses are already proud of their accomplishments, and now more than ever they deserve to celebrate their status.”
Getting certified brings new opportunities from federal agencies, state and local governments, and certain large corporations, who often designate a percentage of contracts for certified women- and minority-owned small businesses. Certification may open up access to exclusive networking, training, and educational programs for business owners. Certification may also increase eligibility for loans, grants, and programs specifically designated for certified entrepreneurs, such as management and technical-assistance programs.
All certification programs contain similar requirements, and if you’re an owner looking to get certified, you will want to start gathering information about the business, information about you, and information about the ways that you lead the business.
The Business
This will include standard documentation that the business is legally operating in good standing. Typical documents submitted about the business include formation documents filed with the secretary of State, governing documents such as the bylaws, financial records, and copies of lease agreements and customer contracts.
It is possible for a newly formed business to get certified, and where certain documentation is unavailable, such as tax returns, the certifying program will generally accept replacement documentation or narrative answers about the business operations.
You as an Owner
This will include proof of ownership of the business, such as stock certificates or the operating agreement, showing that the business is at least 51% women- or minority-owned. Additionally, the owner will need to submit personal information in the form of a photo ID, evidence of citizenship, and a résumé.
How You Manage the Business
This is very important. The certifications generally require not just 51% ownership, but also that the women and minority owners exert substantial control over the operations of the business. These aren’t programs for propping up a token leader, but instead for acknowledging those who have had to run their business while jumping over additional hurdles due to their race, gender, ethnicity, or other diverse class status.
Evidence for this often takes the form of answering a series of questions on who has the power to make financial decisions; take charge of bidding, negotiation, and signing of contracts; supervise employees, and manage the office.
What’s Next
Most programs will involve back-and-forth communication with the program certifiers, and for the Massachusetts Supplier Diversity Office, an investigator is assigned after submission of the application for verification and additional information gathering on the business.
Once approved, in addition to taking advantage of the benefits offered through the programs, the certification gives bragging rights. Our women- and minority-owned businesses are already proud of their accomplishments, and now more than ever they deserve to celebrate their status. A formal certification will only further benefit the business, and when they grow, we all reap the rewards.
Jennifer Sharrow is an associate with the law firm Bacon Wilson, P.C. in the Corporate Department, and is licensed to practice law in both Massachusetts and New Hampshire; (413) 781-0560; [email protected]
