For entrepreneurs, finding the right resources, networks, and contracts can make a world of difference when it comes to finding success. Certifying your business can help open the door to these and countless other opportunities in both the private and public sectors.
Certifications are available for small businesses owned by women, minorities, LGBTQ+ people, veterans, and economically disadvantaged entrepreneurs. Additionally, businesses that meet certain environmental standards can apply for specific building certifications.
Here’s an overview of different types of business certifications and how to begin the application process if you’re eligible.
Who offers business certifications?
The following organizations offer many of the business certifications currently available to diverse small business owners:
- U.S. Small Business Administration (SBA): The SBA
is a government agency that provides support and opportunities to
entrepreneurs and small businesses. This organization offers
certification programs like the Woman Owned Small Business (WOSB)
Program, HUBZone Program, and 8(a) Business Development Program, which
make businesses eligible for certain government contracts. - Minority-centered organizations: Some minority-centered
organizations, such as the National Minority Supplier Development
Council (NMSDC), offer certifications that help minority entrepreneurs
gain new business from the private sector. - Other government and industry organizations: There are
also certifications that are provided by state and city governments. The
contracts they award are smaller and typically only within their
jurisdiction.
Benefits of small business certification
Business certifications come with various perks and resources that can help your company stand out among competitors and scale your business faster.
- Access to contracts: The federal government, as well as
certain private-sector corporations, set aside contracts to be awarded
to businesses with certain verified certifications. These contracts are
only given to businesses with these certifications in order to ensure
equal opportunity. - Ability to form joint ventures: Once you become
certified, you may be able to team up with other businesses within your
certification to compete for certain contracts. - Additional management and technical assistance: Many of these certification programs offer management and technical assistance to help their businesses grow and succeed.
- Credibility: A business certification tells consumers
that you have the knowledge, skills, and commitment to learning about
your industry. This can help you stand out from your competition.
Types of business certifications
There is a wide range of business certifications and certifying bodies available to underrepresented and disadvantaged small business owners.
8(a) small business certification
The 8(a) small business certification was designed to help create equal opportunities for small business owners who are “socially or economically disadvantaged.” The federal government awards at least 5% of contracting dollars for 8(a) businesses and allows them to compete for set aside and sole source contracts.
To be eligible for the 8(a) program, your small business must be at least 51% owned and controlled by U.S. citizens who are economically and socially disadvantaged. Additionally, the owners must manage day-to-day operations, make long-term decisions, and demonstrate good character and the potential for success (e.g., having been operating for two or more years). Owners must also have a personal net worth that is less than $850,000, an adjusted gross income of $400,000 or less, and $6.5 million or less in assets.
If you meet these qualifications, you can apply to become an 8(a) business by registering on the SBA’s website. Once you complete the application, you will receive a letter informing you of your approval or rejection. If you were approved, your certification lasts for a maximum of nine years. However, you’ll be subject to annual reviews in order to maintain your standing in the program.
HUBZone business certification
The Historically Underutilized Business Zone (HUBZone) is a program with the 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, your small business must be located in a HUBZone, have at least 35% of its employees living in a HUBZone, and be 51% owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, a Native Hawaiian organization, or an Indian tribe.
The SBA continually works to make the HUBZone program work better for applicants and has improved decision-making turnaround time, streamlined applications, and expanded early engagement.
You can apply for your HUBZone business certification on the SBA’s website. While there is no limitation to the length of how long a business can have a HUBZone certification, it will have to recertify for the program once a year. Additionally, an examination of your business will be required every three years.
Women-owned small business certifications
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 (WOSB) Federal Contract program.
This program was created to aid female business owners by awarding them contracts within specific industries where women are underrepresented. A minimum of 5% of contracting dollars are given to women-owned businesses each year by the federal government.
There are two types of woman-owned business certifications offered: WOSB and economically disadvantaged woman-owned small business (EDWOSB).
To qualify as a WOSB, your business must:
- Identify as a small business according to the Code of Federal Regulations.
- Be for-profit.
- Be based primarily in the United States; however, some foreign firms may still qualify.
- Be 51% owned and operated by women who are U.S. citizens and work within the business full-time during normal operational hours.
To qualify as an EDWOSB, your business must:
- Meet all of the requirements of the WOSB Federal Contract program.
- Meet the economic requirements of an 8(a) certified business.
- Have owner(s) with a personal net worth of less than $850,000.
- Be owned and controlled by one or more women
who each have an adjusted gross income of $400,000 over the past three
years and with personal assets totaling $6.5 million or less.
If you already have an 8(a) certification, you can also apply for an EDWOSB certification as well. You can apply for both woman-owned business certifications through the SBA’s website. Both certifications require an annual attestation within 30 days of the certification anniversary date to ensure program requirements are still met as set forth in 13 CFR 127. Small businesses will also be subject to a program examination every three years.
[Read more: 10 Women-Owned Business Directories for Your Business to Join]
Minority-owned business certification
The NMSDC is an organization that is committed to integrating Minority Business Enterprises (MBE) equally in the public and private sectors. This organization provides MBE certification for minority-owned businesses.
The NMSDC network consists of over 17,000 certified MBEs that are connected to over 1,700 corporate members. Being MBE-certified can help businesses gain federal contracts as well.
To qualify for the MBE certification, your small business must be 51% minority-owned and operated, and the owners must be involved in daily management. The NMSDC defines a minority as an individual who is at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American. This is established and proven through a combination of screenings, interviews, document reviews, and site visits.
If your business meets this criterion, you can apply to be an MBE through the NMSDC’s website. Once you’ve submitted all the required documents and paid the application fee, you’ll be contacted if you’ve been approved. If your application was not approved, you may submit a letter of appeal.
B corp certification
A B corporation is a for-profit business that is driven by a social mission. These companies use their profits as a means for positive impact on their employees, communities, and the environment. They are certified by the SBA and are overseen by the B Lab, a governing body that ensures B corps are meeting their standards for impact.
Becoming a B corp requires your company to have a positive social impact. For a business to be certified as a B corp, its owners must complete the B Impact Assessment (BIA) and meet the legal requirements. The BIA evaluates the applying company and its impact on its employees, consumers, community, governance, and the environment. Once you complete the BIA, you’ll pay a $150 application fee and pass a risk review. Once approved, your certification will last for three years, after which you’ll be subject to a reassessment to determine if your company still meets the criteria.
Certified B corps, of which there are over 8,000 across 160+ industries, are legally required to consider the effects of their actions on the surrounding public and use their business as a force of positive change. Many famous industry-leading companies, including Ben & Jerry’s, Patagonia, and Grove Collaborative, make up the thousands of B corps.
[Read more: A Complete Guide to Starting a B Corp]
Business certifications come with various perks and resources that can help your company stand out among competitors and scale your business faster.
Veteran-owned business certification
As a veteran of the United States Armed Forces, there are a few different certifications you can apply for if you’re starting a veteran-owned business. Here are some general guidelines to help you determine which kind of certification you may want for your business:
- Federal contracts: The Vets First Verification Program
is a federal government program that grants certification for 51%
veteran-owned small businesses and service-disabled veteran-owned small
businesses. With these certifications, you’re granted competition for
certain contracts that are set aside for veterans and veterans who
became disabled while in the act of service. - Private sector contracts: For business certification in the private sector, the National Veteran Owned Business Association’s Certified Veteran’s Business Enterprise
(VBE) is a program that offers certifications as a marketing tool for
businesses that want to work with VBEs. Like with its federal government
counterpart, your small business must be at least 51% owned by one or
more service-disabled veterans in order to qualify. - State and local contracts: Some state and local
agencies offer their own certification programs for veteran-owned
businesses. This might be an ideal certification option if you wish to
bid on state and local contracts for your business.
[Read more: 9 Top Resources for Veteran-Owned Businesses]
LGBT business certification
The National Gay and Lesbian Chamber of Commerce (NGLCC) created a certification program to help entrepreneurs in the LGBTQ+ community have greater access to contracting opportunities. The Certified LGBT Business Enterprise (LGBTBE) certification gives businesses an opportunity to network and mentor with other LGBTBEs.
To apply, your small business must be 51% owned, operated, managed, and controlled by a person or persons who identify as part of the LGBT community, operating in the United States, and independent from any non-LGBTQ+ business enterprises. You also must pay a certification fee of $899; however, this fee can be waived if you submit proof of a valid, current membership with your local chamber of commerce. Applicants are also subject to a mandatory site visit evaluation. The certification lasts for two years once it is granted.
The NGLCC also offers exclusive programs for certified businesses that are aimed at supporting your business’s growth, including:
- The opportunity to participate in NGLCC Corporate Partner leadership trainings, mentorship programs, and scholarship opportunities.
- Discounts from NGLCC Corporate Partners such as American Airlines, UPS, Hilton Hotels & Resorts, Wells Fargo, and more.
- Sourcing opportunities from NGLCC and its Corporate Partners.
[Read more: Funding Options and Resources for LGBTQ+-Owned Businesses]
Small disadvantaged business certification
The Small Disadvantaged Business (SDB) Certification has been around since 2008 when the SBA introduced it so businesses could self-represent as small disadvantaged businesses for purposes of federal prime contracts and subcontracts. About 10% of contracting dollars — roughly $50 billion — are given to SDBs each year by the federal government.
The criteria for self-representing as an SDB include:
- The company is 51% owned and controlled by one or more disadvantaged individuals.
- The disadvantaged individual(s) are socially and economically disadvantaged.
- The company is small as defined by the SBA’s size standards for each business’s respective industry.
To officially self-represent as an SDB, business owners should navigate to the System for Award Management and register their business as such. Unlike other certifications, businesses do not have to submit an application to the SBA for small disadvantaged business status. This certification, as it is self-represented, does not expire — unless the business no longer fulfills the requirements.
If a business self-represents as an SDB but hasn’t received any other certifications, it’s possible that the business meets the requirements for the following unique small business certifications, including:
- The SBA’s 8(a) Business Development Program.
- The SBA’s HUBZone Program.
- The Women-Owned Small Business Federal Contract Program.
- The Service-Disabled Veteran-Owned Small Business Concern Procurement Program.
While there’s no guarantee a business may meet all requirements for each, there is a good chance it may fulfill all requirements for at least one additional certification, particularly the 8(a) Business Development Program.
Leadership in Energy and Environmental Design (LEED) certification
Brick-and-mortar businesses looking to go green can pursue LEED certification for their buildings. According to the U.S. Green Business Council (USGBC), the goal of LEED is to reduce the environmental impact of businesses and build 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. Currently, there are over 197,000 LEED projects worldwide. Each submitted project earns points by meeting standards in five performance categories: energy, water, transportation, waste, and human experience. 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.
Maintaining a LEED certification is an ongoing process. Every three years, applicants must provide 12 months of data and earn a minimum of 40 points across the above five performance categories. If approved, the project will receive a renewed LEED certification.
In addition to getting LEED-certified for building projects, organizations can also join as members of USGBC, LEED’s backing entity. Membership benefits include discounts on LEED registration and certification.
How to obtain a business certification
To certify your business, you must first determine which certification(s) your company is eligible to receive. For example, a small disadvantaged business may also meet the requirements for a veteran-owned business, which means it can apply for both certifications. The SBA Size Standards Tool is available for business owners who want to confirm eligibility for small business certification or an SBA assistance program.
If you are only looking to certify as a small business or a small disadvantaged business, you do not need to complete a formal certification process and can self-certify when registering on SAM.gov. This registration is also required for those who wish to pursue small business set-aside opportunities from the federal government.
If you seek additional certifications, you must complete separate applications for each. To save yourself some time, complete multiple applications in the same time frame. Although specific application requirements vary, there is overlap in the information you’ll need to provide, including your company’s financials and licensure. Using software and project management tools can help keep you organized, especially if you’re applying for several certifications at once.
Turnaround time for a completed application can vary by agency or organization. For example, the SBA is required to make decisions within 90 days (whenever practicable), while B corp certification can take six to eight months. If your business does not meet the requirements or the application is otherwise incomplete, you may need to submit additional documentation upon request, which can extend the wait time.
Though the process of certifying your business (and maintaining certification) may seem lengthy, many entrepreneurs find the benefits of certification well worth the time spent. Access to industry events, government contracts, networking opportunities, and more can help your small business reach its fullest potential.
Dan Casarella and Danielle Fallon-O’Leary also contributed to this article.
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