Q: What Are Business Certifications? What Are the Benefits?

If you’re a business owner who belongs to an underrepresented group, you may be eligible for a business certification that qualifies you for newand sometimes exclusivebusiness opportunities.

There are two major categories of business certifications:

  1. Government-backed business certifications that make your business eligible to win certain federal contracts
  2. Other business certifications that provide private-sector opportunities

There are several types of business certification available, including those for women, minorities, veterans, and LGBT folks. Here’s what you need to know about some of the most common types of business certifications.

Women-Owned Small Business Certification

One of the major certifications out there is the Women-Owned Small Business (WOSB) certification, which is offered by the U.S. Small Business Administration.

Each year, the federal government aims to award at least 5% of federal contract money to WOSBs and limits certain contracts to businesses that are part of the program. This means that getting certified allows you to compete for federal contracts that other companies aren’t eligible for.

To qualify, your company must be a small business. (That definition depends on your industry.) It must also:

  • Be at least 51% owned and controlled by women who are U.S. citizens, and
  • Have women involved in the business who make long-term decisions and manage the daily operations.

You can self-certify through the SBA by answering questions and uploading business documents.

Alternatively, you can go through one of the four third-party organizations that have been approved by the SBA to certify WOSBs (for a fee). They are:

Women’s Business Enterprise Certification

While the WOSB program gives you exposure to federal contracts, the Women’s Business Enterprise certification is a private certification that helps you gain visibility with corporations. For example, one benefit is access to a list of supplier diversity and procurement executives—in other words, leads for people looking to do business with small business owners like you.

The Women’s Business Enterprise National Council is one of the main WBE certifiers. To qualify, your business must be at least 51% owned, controlled, operated, and managed by women who are U.S. citizens or permanent legal residents.

To apply, you have to submit the requested documentation and have a site visit with a WBENC representative. Certification fees vary depending on your business revenue and range from $350 to $1,250.

Once certified, you’ll be able to compete for business opportunities from both corporations and various government agencies.

8(a) Business Development Program

Next up, business certifications for minority business owners.

On the government side, there’s the federal 8(a) program. It’s for businesses owned by “socially and economically disadvantaged” minority groups, which include:

  • African Americans
  • Hispanic Americans
  • Native Americans
  • Alaska Native Corporations
  • Indian Tribes
  • Native Hawaiian Organizations and Community Development Corporations
  • Asian Pacific Americans
  • Subcontinent Asian Americans

Like with women-owned businesses, the government also has a goal of giving at least 5% of all federal contracting dollars to small businesses each year that it classifies as “disadvantaged.” 8(a)-certified small businesses also get access to the SBA’s 8(a) Mentor-Protégé program, business training, marketing assistance, and other benefits.

To get certified in this federal contracting program, your small business must meet a number of specific criteria, including being:

  • At least 51% owned by economically and socially disadvantaged U.S. citizens, and  
  • Owned by someone whose personal net worth is $250,000 or less and whose average adjusted gross income for three years is $250,000 or less.

You can get certified for the 8(a) program via the SBA at no cost.  

Minority Business Enterprise Certification

Mirroring the federal 8(a) program, there are also organizations that offer certifications for minority-owned businesses that help you gain business from the private sector.

For example, the National Minority Supplier Development Council offers a Minority Business Enterprise certification that gives you exposure to large corporate buyers. The certification also grants access to educational programs, networking opportunities, business fairs with hundreds of prospective buyers, and more.

To get NMSDC’s MBE certification, your U.S.-based business must:

  • Be at least 51% owned and controlled by minorities for at least six months, and
  • Have minority owners serving as president and/or CEO and involved in daily management of the business. The minority owner(s) also must be a U.S. citizen.

The NMSDC defines “minority” as at least 25% Asian, Black, Hispanic, or Native American.

To get certified, you have to submit documents to the regional affiliate closest to your headquarters, and you will have to do interviews and site visits. Getting certified costs several hundred dollars, depending on the size of your business. 

Service-Disabled Veteran-Owned Small Business Program

Beyond women-owned and minority-owned business certifications, there are also certifications for other underrepresented groups.

If you’re a veteran with a service-connected disability (as determined by the Department of Veterans Affairs or Department of Defense), your small business might be able to qualify for the Service-Disabled Veteran-Owned Small Business Program. It’s a federal contracting certification—the federal government’s goal is to give at least 3% of its contracting dollars to SDVOSBs every year.

For your small business to qualify:

  • A service-disabled veteran must hold the highest officer position in the business;
  • The company has to be at least 51% owned and controlled by service-disabled veterans; and
  • At least one or more service-disabled veterans have to be the ones who manage the business’s day-to-day operation and make long-term decisions.

Unlike the previous ones, this program does not have a formal certification process. Instead, you just go to the socio-economic status part of your SAM.gov business profile and self-represent your business as owned by a service-disabled veteran.

LGBT Business Enterprise® Certification

And if your business is LGBT-owned, you can apply for an LGBTBE® certification. This private certification program is offered by the National LGBT Chamber of Commerce.

Once certified, you gain access to business opportunities and contracts from private corporations, plus connections to other LGBT-owned businesses.

To qualify for this certification:

  • At least 51% of your business must be owned, operated, managed, and controlled by LGBT people who are U.S. citizens or legal permanent residents;
  • The company must be formed and headquartered in the U.S.; and
  • The business has to be independent of any non-LGBT business.

Certification costs $400 and includes a site visit.

These are just some of the national business certifications out there. Your state and city may have their own similar certifications, and there are other private sector certifications as well. Getting these certifications may require some work and expenses upfront, but they can give you access to more business opportunities and contracts that can help your business grow.

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