What is a woman-owned business certification, and how do I get one?

If you're a woman and you own a small business, did you know that there are millions of dollars set aside for you every year? But to get that money, you'll first need to become certified as a woman-owned small business. Here's how you can do it, and what to consider when you do.

Why get certified as a women-owned small business?

This money — literally called "set-aside"— is designated by different private and public organizations in an effort to increase diversity among its contractors.

For example, the federal government's goal is to award 5% of all contract dollars to women-owned small businesses. That's not a huge percentage, but given that the federal government spends trillions every year, that's a huge amount of money just waiting to be claimed.

Similarly, private companies, organizations, and state and local governments may also set up contracting goals like this through "supplier diversity" programs. Even if the businesses you work with don't have set-aside goals, marketing yourself as a "women-owned small business" can still give you a leg up on the competition.

Step 1: Decide which certification is right for your business

To make matters confusing, there are several different designations that qualify as a women-owned small business:

• Women-Owned Small Business (WOSB) — This program from the Small Business Administration(SBA) certifies businesses that are run by women who have 51% ownership or more of the company.
• Economically Disadvantaged Women-Owned Small Business (EDWOSB) — Also run through the SBA, this program is for businesses that meet the WOSB criteria but also meet certain financial requirements, such as the owners having less than $750,000 in assets and an annual income of less than $350,000.
• Women's Business Enterprise (WBE) —This program is run by the Women's Business Enterprise National Council, which also offers the option for joint certification as a WOSB through the SBA.
• State and local programs — Some states and local governments have their own certification programs for women-owned small businesses.

To determine which certification is right for you, consider what type of work you already do (or would like to do). If you're interested in federal contracts, for example, it may be better to seek out certification as a WOSB or EDWOSB because these are federal programs. If you're only interested in local jobs, then a state or local certification might be best. When in doubt, check with your potential customers to see what they require.

Step 2: File your application

Typically, you'll file your application through the agency that you're applying with. But that's not always the case for some of the most common certifications.

Notably, the SBA now allows you to file for WOSB or ESWOSB certification directly with them for free starting this year. But you may also apply through four designated third-party organizations:

• El Paso Hispanic Chamber of Commerce
• National Women Business Owners Corporation
• U.S. Women's Chamber of Commerce
• Women's Business Enterprise National Council

These organizations each charge a processing fee, but in return, you may see better service and faster turnaround times.

It's best to get your application materials ready ahead of time. Generally, you'll need to provide certain business documents, such as:

• Resume
• Proof of U.S. citizenship
• Articles of organization or incorporation
• Tax returns and personal financial documents, if applying for EDWOSB certification

Step 3: Get (and keep) your certification

The application process can take several weeks or even a couple of months. It's important to keep an eye out for any document requests during this time to help speed up the process.

Once you're approved, you'll be awarded a certificate that you can use with your proposals when you respond to RFPs. It's also a good idea to connect with organizations like the WBENC and Billion Dollar Roundtable, which might be able to notify you of opportunities for corporate contracts.

It's also a good idea to put your new status on any marketing materials to notify your customers. Even if you have the type of business where you don't respond to RFPs, such as a catering, you can add a small "Women-Owned Business" notification on your website and social media profiles.

You'll need to re-certify your business as a WOSB or EDWOSB every three years (or every single year for a WBE). Remember to do this ahead of time, because if your certification lapses, you'll need to go through the application process all over again.

Bottom line

If you're a woman who owns a small business, getting a certification as a woman-owned business can be a great way to grow your company. You'll become more competitive, especially while bidding for lucrative government and corporate contracts. There are several steps to complete, but once you do, you'll be glad you did.