Strategy of Standing Out-Women Owned Business Designation

(There’s something here for the boys, too!)

Ladies! (And gentlemen that know ladies…)

In case you need another reason to buy a business, here it is.

Buy a “boy business”, something in a male dominated industry, then get officially designated as a Woman Owned Business.

I’m on the road this week, learning to up my content creation game, so this may be shorter than I originally intended. (Here I come beignets and gumbo!) I’ll include some of the links I used for my research. Reach out if you have questions or want me to go deeper into any specific aspect of women owned businesses.

In this issue, I’ll try to answer four questions:

• What is a woman owned business?

• How do I get certified as a woman owned business?

• Why would I want to be designated as a woman owned business?

• What is the Silver Tsunami and what does it have to do with women owned businesses?

Here we go!

What is a woman owned business?

A woman owned business is an entity that is owned and operated by a woman with at least a 51% majority. As I understand it, the 51% majority can be made up of more than one woman, as long as their combined control equals or exceeds 51%. Male dominated industries will be addresses below.

How do I get certified as a woman owned business?

Certification can happen at the federal, state, and local levels, depending on how and where you want to utilize the designation. Your business must be operating in an industry, based on ​NAICS codes​, that are predominately male based.

The certification process can take about 90 days, and the option to self-certify no longer exists. Once certified, your profile will need to be updated on an annual basis. There is a free certification process through the SBA, the Small Business Administration, or you can hire a third party to certify your business.

There are two types of designations for which you may qualify. One is a “regular” woman owned business and the other is an Economically Disadvantaged business. In addition to the “regular” requirements, you may qualify as an EDWOSB-Economically Disadvantaged Woman Owned Small Business under the following circumstances:

• The owner’s personal net worth is less than $750,000.

• The owner’s adjusted gross income average over three years must be less than or equal to $350,000.

• All assets must have a fair market value of $6 million or less.

  • Certain items are excluded from the calculation:

  • Equity in business and primary personal residence.

  • Income reinvested or used to pay business taxes.

  • Funds invested in official retirement accounts.

And this is a government program, so there are lots of hoops to jump through and documentation to provide. Some of the things you’ll need include:

• Articles of organization/incorporation, along with partnership or joint venture agreements, voting agreements, and any amendments to these documents.

• Any assumed or fictitious name certificates.

• Stock ledgers and certificates.

• Birth certificates, naturalization papers or unexpired passports for each woman business owner.

• Three most recent personal tax returns.

  • W-2’s

  • All schedules

  • For each woman business owner and her spouse.

• IRS Form 4506-T, Request for Tax Transcript for each woman business owner and her spouse.

Why would I want to be designated as a woman owned business?

Besides the cool factor, there are financial reasons to become a certified woman owned business. Private companies often have internal mandates stating their desire to do a certain amount of business with certain groups of underrepresented people, such as minorities and women. The federal government has a goal to award at least 5% of all contracting dollars to women-owned businesses each year, and some of these are aimed even more specifically at businesses owned by economically disadvantaged women.

Maybe federal government contracts and corporate giants are not your target market. That’s okay, it’s not for everyone. A state designation or even a local designation may be more appropriate for your situation. The projects may be smaller, the timelines shorter, and maybe you know these officials personally. Is having a local impact important to your personal mission? In Indiana, for example, there is a state designation available, known as the Women’s Business Enterprise certification.It does share many similarities with the national SBA certification, but it’s designated specifically for contracts with the state of Indiana. With Indiana’s certification, you will even receive notices of upcoming opportunities, so you know exactly when to enter your bid. Training events and networking opportunities are part of the package. To qualify, women owners must control the enterprise, be U.S. citizens, and have expertise in their field.

What is the Silver Tsunami and what does it have to do with women owned businesses?

As of today, approximately 2.3 million small businesses are owned by Baby Boomers, those people aged 55 and over. Despite an astonishing 78% of those being profitable, only one in five will end up selling. The rest will probably just close their doors, from death, from illness or from just pure exhaustion.

Many of these aging business owners are men, operating in male dominated industries. Shhh…Do you hear it?

That’s opportunity a-knockin’! For everyone really, but especially for women.

Under the right circumstances, this could be your entire strategy. This is how I see it going down, the strategy I’m considering for my daughter and I over the next few years.

Say we buy one of these “boy businesses”, maybe it’s a welding business. I don’t know why, but that’s a skill I’ve always been fascinated with. I don’t know much about it, but I doubt if welding is going away. Maybe the robots will be doing all the welding, but who will weld the robots? Maybe they will weld each other…

Anyhow, us girls buy a welding business. Its’ been around for a few decades. Great rep. Profitable. Old guy started it with his dad back in the day. His kids are coding apps in Silicon Valley and have no desire for Dad’s sweaty, blue-collar goldmine, I mean welding business. We take over. Maybe we only buy 51%. Dad, he’s becoming like a dad to us now too, wants to stick around a few more years. That’s fantastic! He can show us the ropes AND benefit from the upside we’re about to deliver.

And if all we deliver, or add to this business, is a little bit of technology and a nice bump from the new contracts we bring in as a female owned business? What a victory for all!

This may be over simplified, but only a little. Use your imagination. What are you willing to do? Who are you willing to do it with?

This could also work for a wife and husband team, or sister/brother. What about your real dad? Or uncle? Do they have one of these “boy businesses” they’re going to have a hard time retiring from. There are so many ways to use this strategy…

The ​SBA ​and ​US Chamber of Commerce​ can help.

Now Go Buy a Business!