Woman Owned & Grown
Becoming a certified woman-owned business can really pay off.
By Mary Cantando
Mercedes LaPorta smiles a lot. With another new contract – this one from American Airlines and worth $10 million – the CEO and owner of Mercedes Electric Supply Inc. has reason to beam.
Based in Miami, LaPorta is one of 15.6 million U.S. women who have jumped on the entrepreneurial bandwagon. But, while many of these women agonize over the source of their next contract, she does not.
Her success formula is simple: one part business smarts, one part hard work and one part certification as a women's business enterprise (WBE).
As corporations become more interested in buying from WBEs, they want assurance that a firm is indeed woman-owned and operated. Certification by the Women's Business Enterprise National Council (WBENC) immediately qualifies a WBE as a potential diversity vendor with more than 750 major corporations. Founded in 1997, the WBENC is the largest third-party certifier of businesses owned and operated by women in the United States, followed by the National Women Business Owners Corporation. States and local governments offer their own certification too. The WBENC confirms 100 certified WBEs have revenues of more than $50 million; 60 have revenues of more than $100 million; and six have revenues of more than $1 billion. Corporations are eager to attract women-owned businesses for several reasons.
Women are key customers. Pharmaceutical, auto and consumer product corporations recognize that women purchase up to 90 percent of their products. Using WBEs as vendors enables these organizations to better understand and attract women customers. Involving WBEs in product development, packaging, marketing and advertising gives these companies an inside track to their key buyers.
"Most of our customers are women," explains Pam Eason, a senior executive with Pfizer. "This is particularly true for our consumer products division, so it just makes sense to have a supplier base that reflects our customer base. Our purchasing agents are required to access our database of certified suppliers as part of the sourcing process, so obtaining certification is like jumping to the short list."
Corporations need WBEs to win contract awards. Many corporations encourage their suppliers to include WBEs as tier suppliers or subcontractors. Some carry this one step further and "require" diverse subcontractors for certain contracts. Greg Taylor, senior vice president of global supply chain management for Bank of America, says his company requires standard supplier diversity language in "all of our contracts, which has significantly increased our spending with women-owned businesses."
This is a common requirement. Most corporations use WBEs as tier vendors to gain major corporate and government contracts and to fulfill the requirements of those contracts.
In spite of the opportunity that certification provides, only 5,510 women-owned businesses are WBENC-certified across the nation. Some women are simply overwhelmed with the certification process; they take one look at it and think, "Well, maybe next year."
That was LaPorta's initial reaction, but today her heart skips a beat when she thinks how she might have passed on this opportunity. "I was initially intimidated by the whole certification process," she remembers, "but once I got into it I realized that it was worth it. Certification gave me a way to compete against the good old boys' network of the electrical industry." She admits getting certified was a complex process but says, "I now see how that's part of its value. Because the process is not simple, corporations feel confident the certified businesses are, indeed, woman-owned."
Of course, becoming certified does not guarantee that you will obtain corporate contracts, but it does open doors. Over the years, LaPorta's certification has given her an incredible boost over noncertified businesses. She estimates that certification has positioned her to win about $70 million in contracts with corporations from Office Depot to MGM Grand Hotels. And she has a clear plan for how she'll continue to capitalize on her WBENC certification by attending WBE conferences and trade shows across the country. She also will continue to serve on the WBENC National Women's Forum.
With future annual revenue projected to reach $75 million, LaPorta sings the praises of WBENC certification to every woman she meets. "I never imagined the benefits that certification could bring to my business, and I encourage any woman who is serious about her business to investigate it," she says. "Certification can be the business breakthrough that you're looking for."
Should You Certify Your Business?
Certification isn't right for everyone, but if the following criteria describe your business, you should strongly consider it:
• Your business is at least 51% woman-owned and is managed on an ongoing basis by a woman or women.
• You sell business-to-business rather than to individual consumers.
• You target multimillion-dollar companies and can service them regionally or nationally.
• Your revenue is at least $500,000 and you have the capability and cash flow to deliver on contracts of more than $100,000.
• You want to grow your business significantly and can handle the growth.
• You're willing to invest the time and effort to complete the certification process.
• You're willing to share your financials with the certifying committee.
How To Get Certified
Here is a streamlined process to make certification less ominous:
• Review the application. Don't complete it at this time, but gather all required documentation. This includes copies of bank signature cards, current leases and business financials for the past three years.
• Make two complete sets of this documentation, putting each set in a separate binder – one to send and one to keep as your reference.
• Working from this documentation, complete, print and submit the online application. Within a few days, you will receive an e-mail instructing you where to mail your printed application and documentation.
• The cost for doing it yourself is $300 to $350 for the application fee. But depending on the complexity of your business, you may wish to have an attorney or CPA complete this for you. Fees vary with a third party doing the paperwork for you.
Mary Cantando is the author of The Woman's Advantage (Kaplan Business, May 2006).