What it means to certify a business and key benefits

Small business owners play a vital role in driving economic growth, yet many continue to face challenges accessing capital and resources. Obtaining certifications can help improve access to new funding opportunities, contracts and valuable networking. It can also give access to public and private programs designed to grow and sustain small businesses.

 

While not a complete list, below are some of the benefits of certification as well as several options available to small business owners.

 

Note that the information in this article is derived from other sources and is intended to provide general educational information about each source’s individual requirements. The services described are not provided by Bank of America Corporation or any of its affiliates. Bank of America and its affiliates do not provide legal, tax or accounting advice. You should consult the sources directly and your legal and/or tax advisors before making any financial decisions.

 

Benefits of certification for small business owners

Getting certified can bring new opportunities from federal agencies, state and local governments, and certain large corporations, which typically designate a percentage of contracts for certified small businesses. With certification often comes exclusive networking, training and educational programs for business owners. Certification may also make you eligible for loans, grants and programs specifically designated for certified entrepreneurs (like management and technical assistance programs). All in all, it can be a big win for many businesses.

 

What businesses are best suited for certification?

Pursuing certification can be a valuable tool for businesses looking to differentiate themselves in the marketplace. While any type of business can be certified, some industries may be more likely to benefit from certification than others. For example, industries that have a significant amount of government contracts or require specific technical expertise may be more likely to benefit from certification. Ultimately, the decision to seek certification depends on various factors, including industry, size and scope, and a business’s goals for growth and expansion.

 

What are the options for certification?

To certify your business, you have several options depending on your goals, including certifications for government contracting, industry-specific expertise and socially responsible practices. These certifications can help you gain access to new markets, demonstrate credibility and attract additional clients.

 

Here’s an overview of different types of business certifications and how to begin the application process if you’re eligible.

 

8(a) small business certification

The U.S. Small Business Administration (SBA) offers the 8(a) business certification, which it states can be a valuable tool for experienced socially and economically disadvantaged small business owners who have already been in business for at least two years or more and are interested in expanding their footprint in the federal marketplace.

 

While the 8(a) certification does not guarantee contract awards, it gives businesses a means to pursue and capture new opportunities from the government.

 

To be eligible, businesses must meet several criteria, including — but not limited to — being majority owned (at least 51%) and controlled by individuals who are economically and socially disadvantaged.

 

For more information on eligibility and how to apply, visit sba.gov/8(a).

 

HUBZone business certification

The Historically Underutilized Business Zone (HUBZone) is another SBA program with the stated goal of growing businesses in historically underutilized areas by awarding them at least 3% of federal contract dollars each year.

To qualify for the HUBZone program, the SBA says your business must:

 

• Be a small business according to SBA size standards.
• Be at least 51% owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, an Alaska Native corporation, a Native Hawaiian organization or an Indian tribe.
• Have its principal office located in a HUBZone.
• Have at least 35% of its employees living in a HUBZone.

 

You can find the full qualification criteria in Title 13 Part 126 Subpart B of the Code of Federal Regulations (CFR).

 

Women’s business enterprise

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 (WOSB) and Economically Disadvantaged Women-Owned Small Business (EDWOSB) certification.

 

To be eligible for the WOSB Federal Contract program, the SBA states that a business must:

 

• Be a small business according to SBA size standards.
• Be at least 51% owned and controlled by women who are U.S. citizens.
• Have women manage day-to-day operations and make long-term decisions.

 

To qualify as an EDWOSB within the program, a business must:

 

• Meet all the requirements of the WOSB Federal Contract program.
• Be owned and controlled by one or more women, each with a personal net worth (excluding primary residence and ownership interest in the business) of less than $850,000.
• Be owned and controlled by one or more women, each with an average of $400,000 or less in adjusted gross income over the previous three years.
• Be owned and controlled by one or more women, each with $6.5 million or less in personal assets (including primary residence and ownership interest in the business).

 

For more information on eligibility and how to apply, visit certifications.sba.gov.

 

Another certification option for women-owned businesses is through the Women’s Business Enterprise National Council (WBENC), an approved third-party certifier for the SBA’s WOSB Federal Contract program. It is the most widely recognized certification for women-owned businesses in the U.S.

 

With certification, businesses can receive professional development, networking and education opportunities among other benefits.

 

To qualify as a WBENC-Certified Women’s Business Enterprise your business needs to be at least 51% owned, controlled, operated and managed by women.

 

For more information on eligibility and how to apply, visit wbenc.org/certification/.

 

Veteran-owned business certification

For veterans of the U.S. Armed Forces, two different certifications are available through VetCert, a federal government program that grants certification for veteran-owned small businesses (VOSBs) and service-disabled veteran-owned small businesses (SDVOSBs). With these certifications, you’re granted opportunities to compete for certain contracts that are set aside for veterans and veterans who became disabled during active service.

 

To qualify for these certifications, a small business must be at least 51% owned and controlled by one or more veterans. To apply for SDVOSB certification, the owner also must have a service-connected disability.

 

For more information on eligibility and how to apply, visit sba.gov.

 

For business certification in the private sector, the National Veteran-Owned Business Association’s Certified Veteran’s Business Enterprise (VBE) program offers certifications as a marketing tool for businesses that want to work with VBEs. Your small business must be at least 51% owned by one or more U.S. military veterans to qualify. The organization offers a separate certification for the Service-Disabled Veteran’s Business Enterprise program.

 

For more information on eligibility and how to apply, visit navoba.org/.

 

Leadership in Energy and Environmental Design (LEED) certification

Businesses looking for a path to sustainability can pursue LEED certification for their buildings. According to the U.S. Green Building Council (USGBC), the goal of LEED is to reduce the environmental impact of buildings and develop sustainable cycles for healthier communities. LEED offers certification for building design and construction, interior design and construction, building operations and maintenance, neighborhood development, homes and cities.

 

LEED certification is granted on a project basis rather than by business. Each submitted project earns points by meeting standards in categories such as energy, water, transportation, waste and indoor environmental quality. The project then goes through a verification and review process, after which it receives one of four LEED certification levels: Certified (40-49 points), Silver (50-59 points), Gold (60-79 points) or Platinum (80+ points). Specific policies, procedures and pricing for each LEED certification can be found on the USGBC website.

 

For more information on getting LEED certification for a project, visit usgbc.org/leed.

Things to keep in mind when considering certification

Application process

Each entity that certifies businesses will operate a little differently, so eligibility, processes, requirements and guidelines will vary. What’s required will also depend on what kind of entity your business is and who you're applying to, such as a local or state government.

 

The standard throughout is the need for major documentation, so prepare yourself for some paperwork — including, but not limited to, your tax returns, profit and loss statement and balance sheet — and submit your application (typically online). For the SBA, you’ll also need to show an active registration in the System for Award Management for the business, available at SAM.gov.

 

After you’ve submitted your application and supporting documents and the SBA has completed processing them, certification can take up to 90 days to be completed.

 

Application fees

While the SBA’s online certification processes are free, most certifying organizations base their application fees on your company’s revenue and region. These fees typically range from around $250 to $2,000.

 

State and local government certifications

Local and state governments also offer certification programs. Check with your city and state government agencies that work with businesses (such as an economic development agency) for information on how to apply.

 

Identifying opportunities as a certified business

Once you’re certified, you’ll want to take advantage of the new opportunities that may now be available to you. Work it! Start hunting on city, state and company websites for opportunities to bid on work. Some offer free e-newsletters advertising new projects.

 

What should be done after certification?

You have bragging rights, so make sure you mention your new certification on your website, social media, marketing materials and in your email signature. Send out a press release announcing your achievement to your industry association’s newsletters. If you have your own external newsletter, be sure to include it there.

 

Keep in mind, too, that your work is not finished once certified. You’ll need to maintain your status, with some organizations requiring recertification as often as every year. Stay on top of what you need to do to stay compliant, so you’re always ready to jump on new opportunities.