Over the years working with small businesses, a frequent complaint I hear is that a company has one or several certifications but that certification hasn’t “worked.” For some, the process of certification was too much work to even complete the application. For others, leveraging the certification was too time consuming or simply didn’t become a priority given other business needs. On the other hand, I have also heard from companies who have benefited from becoming certified. These companies develop new business relationships and sell to new clients through the networks they join as diverse businesses. The certification works for them because the business owner and her team has made a plan and set aside time and resources to implement the plan. Before even submitting an application, the most important part of the process is to identify the benefits of certification for your business, and the amount of time, energy, and resources available to leverage those benefits. Sometimes, the best time decision is to know that certification doesn’t make sense for your business right now.
In order to manage your expectations about what certification can and cannot do for your business, let’s cover the basics. I answer some frequently asked questions (FAQs) below to get you started. This post is geared toward my U.S. readers but I will have a post on international certifications coming next!
1. What does it mean for a business to get certified?
Many major purchasing organizations, including the federal government and Fortune 500 companies, have supplier diversity and inclusion programs that have goals for buying goods and services from diverse suppliers. Not only does this provide more competition in their bidding processes, but it also engages with and invests in the communities where the corporations work.
For some buyers, like the federal government, there is a mandate to buy some percentage of goods and services; for others, like most Fortune 500 companies, they have business goals tied to their amount of spend with diverse suppliers. For most major companies, that means they are looking to buy from businesses owned by women, minorities, people with disabilities, and lesbian gay bisexual transgender business owners. Many also look for a veteran-owned certification or have specific goals for local projects.
Many supplier diversity and inclusion programs require or prefer that companies that are counted as diverse have a diverse business certification that ensures a company is 51% or more owned by a person or persons from the communities listed above.
In fact, there are dozens of certifications your company can pursue accepted by companies with supplier diversity programs. There are hundreds more if you include state and local certifications. Some certifications are primarily for government agencies, but are also accepted by private sector companies that contract with those agencies.
2. How do I know which is right for me?
If you think your company is eligible for certification because the company is 51% owned by a person in one of these recognized categories, the best thing to do is to check with your clients and potential clients as to the certifications they accept. Most will have supplier diversity pages on their websites that will tell you what certifications they accept.
3. Do I have to qualify as a small business to get certified?
The short answer is that there is no specific size criteria for every company. If you are applying for federal small business programs then you have to meet the definition of a small business for your industry, based on your annual revenue. Since those revenue thresholds vary by industry, you can look those standards up here.
For WBENC and NMSDC certifications, there is no size minimum or limit. For example, WBENC certification offers small businesses the option to also certify as a Women Owned Small Business (WOSB), which is recognized by the federal government. They also have a special process for companies that generate over $500 million USD annually in revenue. Since there is no hard and fast rule about revenue or years in business, I would advise that key component to successfully leveraging your certification is having the time, energy and resources to market your company to a new target audience.
4. Isn’t certification just another obstacle to overcome?
This is a fair question considering that answers one and two deal with the certification itself and we haven’t even gotten to the applications yet. The applications can be time consuming and require a lot of paperwork. This satisfied the need for corporations to maintain the integrity of their supplier diversity programs and ensure the resources provided get to the intended people and communities. Thinking of certification as business development work, as opposed to administrative work, can help you prioritize getting your paperwork in order, scheduling a site visit, or answering that follow up email. That said, it may not make sense to get every single certification that is accepted by your target clients. Pick the organization(s) which will give you the most opportunities to connect. Having more than one certification can certainly amplify your visibility but you need to be mindful of the limited time and energy you will have to participate in each organization.
5. I have already certified my business. What’s next?
I’m so glad you asked! There are long and short answers to this question but I’ll give the short one here and save the others for another post (or several). The best thing to do is show up. Your certification is like a gym membership, it won’t do the workout for you. In order to achieve your goals at the gym you have to make a plan, set aside time, push yourself, and follow through; fortunately or unfortunately, certification is no different. The good news is that the organizations that provided your certification also have lots of opportunities for you to connect with potential clients and your fellow business owners. Go to the events, network, determine where you are getting the most bang for your buck.
Another reminder, supplier diversity programs do provide an additional point of entry for new corporate clients but they are not the only way to access those clients. Maintain relationships on the business side as well as through supplier diversity so you can maximize your opportunities with a given company.
What questions do you have? Feel free to ask in the comments. I will be building on these FAQs in the future so your question may get picked for a future blog post.