A Guide to Business Certifications for Small Business Owners
If you’re a small business owner who belongs to an underrepresented group, you may be eligible for certain business certifications that can help you access more government contracts and private-sector opportunities.
Certifications for groups like women, minorities, LGBTQ entrepreneurs and more promote supplier diversity, which encourages the use of diverse businesses as suppliers. These certifications also come with access to exclusive resources and networks, leading you to new business opportunities.
Here’s an overview of different types of business certifications and how to begin the application process if you’re eligible.
Who offers business certifications?
The following organizations offer many of the business certifications currently available to diverse small business owners:
- U.S. Small Business Administration (SBA): The SBA is a government agency that provides support and opportunities to entrepreneurs and small businesses. This organization offers certification programs like the Woman Owned Small Business (WOSB) Program, HUBZone Program and 8(a) Business Development Program, which make businesses eligible for certain government contracts.
- Minority-centered organizations: Some minority-centered organizations, such as the National Minority Supplier Development Council, offer certifications that helped minority entrepreneurs gain new business from the private sector.
- Other government and industry organizations: There are also certifications that are provided by state and city governments. The contracts they award are smaller and typically only within their jurisdiction.
Why become a certified business?
Business certifications come with various perks and resources that can help your company stand out among competitors and scale your business faster.
- Access to contracts: The federal government, as well as certain private sector corporations, set aside contracts to be awarded to businesses with certain verified certifications. These contracts are only given to businesses with these certifications in order to ensure equal opportunity.
- Ability to form joint ventures: Once you become certified, you often can join other businesses within your certification in order to compete for certain contracts.
- Additional management and technical assistance: Many of these certification programs also offer management and technical assistance to help their businesses grow and succeed.
Types of business certifications
While there are a wide range of business certifications and certifying bodies available to small business owners, here are some of the most well-known types:
8(a) Small Business Certification
The 8(a) Small Business Certification was designed to help create equal opportunities for small business owners who are “socially or economically disadvantaged.” The federal government awards at least 5 percent of contracting dollars for 8(a) businesses and allows them to compete for set aside and sole source contracts.
To be eligible for the 8(a)program, your small business must be at least 51 percent owned and controlled by U.S. citizens who are economically and socially disadvantaged. Additionally, the owners must manage day-to-day operations, make long-term decisions and have a personal net worth that is less than $750,000 and a three-year average adjusted gross income of $350,000 or less.
If you meet these certifications, you can apply to become an 8(a)business by registering on the SBA’s website. Once you complete the application, you will receive a letter informing you of your approval or rejection. If you were approved, your certification lasts for a maximum of nine years. However, you’ll be subject to annual reviews in order to maintain your standing in the program.
HUBZone Business Certification
The Historically Underutilized Business Zone (HUBZone) is a program with the goal of growing businesses in historically underutilized areas by awarding them at least 3 percent of federal contract dollars each year.
To qualify for the HUBZone program, your small business must be located in a HUBZone, have at least 30 percent of its employees living in a HUBZone, and be 51 percent owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, a Native Hawaiian organization or an Indian tribe.
You can apply for your HUBZone business certification on the SBA’s website. While there is no limitation to the length of how long a business can have a HUBZone certification, they will have to recertify for the program once a year. Additionally, an examination of your business will be required every three years.
Women-Owned Businesses Certifications
If your business is majority-owned and operated by one or more women, you may be eligible for the SBA’s Women-Owned Small Business program.
This program was created to aid female business owners by awarding them contracts within specific industries where women are underrepresented. A minimum of 5 percent of contracting dollars are given to woman-owned businesses each year by the federal government.
There are two types of woman-owned business certifications offered by the National Women’s Business Council: Woman-owned small business (WOSB) and economically disadvantaged woman-owned small business (EDWOSB).
To qualify as a WOSB, your small business must be for profit and 51 percent owned and operated by women who are U.S. citizens and work within the business full-time.
If you’re looking to qualify as an EDWOSB, your business must meet all of the above requirements for a WOSB, as well as the economic requirements of an 8(a) certified business. If you already have an 8(a) certification, you can also apply for an EDWOSB certification as well. You can apply for both woman-owned business certifications through the SBA’s website.
Minority-Owned Businesses Certification
The National Minority Supplier Development Council (NMSDC) is an organization that is committed to integrating Minority Business Enterprises (MBE) equally in the public and private sector. This organization provides MBE certification for minority-owned businesses.
The NMSDC network consists of over 12,000 certified MBEs that are connected to over 1,400 large corporate members. Not only is it a significant certification within the NMSDC, but being MBE-certified helps in government circles to gain federal contracts as well.
To qualify for MBE certification, your small business must be 51% minority-owned and operated, and the owners must be involved in daily management. The NMSDC defines a minority as “an individual who is at least 25 percent Asian, Black, Hispanic or Native American.” This is established and proven through a combination of screenings, interviews and site visits.
If your business meets these criteria, you can apply to be an MBE through the NMSDC’s website. Once you’ve submitted all the required documents and paid the application fee, you’ll get an email and letter if you’ve been approved. If your application was not approved, you may submit a letter of appeal.
“Becoming a B Corp requires your company to have a positive social impact.”
B Corp Certification
A B Corporation is a for-profit business that is driven by a social mission. These companies use their profits as a means for positive impact for their employees, communities and the environment. They are certified by the SBA and are overseen by the B Lab, a governing body that ensures B corps are meeting their standards for impact.
Becoming a B Corp requires your company to have a positive social impact. For a business to certify as a B Corp, they must complete the B Impact Assessment (BIA) and meet the legal requirements. The BIA evaluates the applying company and their impact on their employees, consumers, community and the environment. Once you complete the BIA, you’ll pay a fee. Once approved, your certification will last for three years, after which you’ll be subject to a reassessment to determine if your company still means the criteria.
Veteran-Owned Business Certification
As a veteran of the United States Armed Forces, there are two different certifications you can apply for if you’re starting a business. The Vets First Verification Program is a federal government program that grants certification for Veteran-Owned Small Businesses (VOSB) and Service-Disabled Veteran-Owned Small Businesses (SDVOSB). With these certifications, you’re granted competition for certain contracts that are set aside for veterans and veterans who became disabled while in the act of service.
To qualify for these certifications, you must be a small business that is at least 51% owned by one or more service-disabled veterans who manage the business daily. To apply for SDVOSB, you also must have a service-connected disability.
For business certification in the private sector, the National Veteran Owned Business Association’s Certified Veteran’s Business Enterprise (VBE) is a program that offers certifications as a marketing tool for businesses that want to work with VBEs. Like its federal government counterpart, your small business must be at least 51 percent owned by one or more service-disabled veterans.
LGBT Business Certification
The National Gay and Lesbian Chamber of Commerce (NGLCC) created a certification program to help entrepreneurs in the LGBTQ+ community have greater access to contracting opportunities. The Certified LGBT Business Enterprise (LGBTBE) certification gives businesses an opportunity to network and mentor with other LGBTBEs, provides access for scholarships and opens businesses up to special discounts from LGBTQ+ owned and allied partners.
To apply, your small business must be 51 percent owned, operated, managed and controlled by a person or persons who identify as part of the LGBT community, operated in the U.S. and independent from any non-LGBTQ+ business enterprises. You also must pay an application fee and are subject to a site visit evaluation. The certification lasts for two years once it is granted.