Benefits of Becoming a Certified Women-Owned Business

Certification can provide a competitive edge

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If you are a female owner of a manufacturing company, as I am, you may wonder if it’s worth the effort to get your business certified with the Women’s Business Enterprise National Council (WBENC), the most recognized certifying agency in the United States. My company, Pioneer Service Inc., is a contract manufacturer of CNC machined parts. Although we have been owned by a woman for more than 20 years, it wasn’t until 2013 that I seriously investigated the benefits of becoming certified.

I had resisted the idea for years because I didn’t like the perceived stigma that I was looking for special treatment. We compete in the marketplace on our own merits, so I wasn’t sure if certification was right for us. What I learned, however, was that as a woman-owned manufacturer, we are part of a small demographic with barriers to entry for OEM business that can be high, making relationships in supplier diversity circles helpful. This certification helps some of my existing customers meet their diversity goals, and it opens doors to new opportunities. We also benefit from sharing opportunities. When we’re not the best fit for a machined part, we pass RFQs along to other diversity-owned companies.

What is driving the need for supplier diversity? Consumers are becoming more conscious of the ethics and origins of their products, and Fortune 500 companies are stepping up their efforts to become more socially responsible. Additionally, when the federal government got involved in restructuring large automotive companies after the last major recession, they put stipulations on the automakers, including supplier diversity goals. There are many companies in the automotive, government, medical and consumer goods space that have “supplier diversity spend” targets that range between 1 to 10 percent for minority- and women-owned businesses. Many struggle to meet these goals without certification as a woman- or minority-owned business.

According to American Express’s report on The State of Women-Owned Businesses 2016, women are majority owners of an estimated 38 percent of the country’s businesses, but employ only about 8 percent of the private workforce. Unfortunately, only 3 percent of women-owned companies have a “high economic impact,” defined as surpassing $500,000 in revenue annually. The certification system and supplier diversity goals allow more women-owned businesses to grow.

The WBENC certification process made sure that our company was not only majority-owned, but also operated by a woman. The standard is rigorous, which makes the certification meaningful. For us, it took about three months to become certified since there was no question about my role and involvement in the company. Soon after adding the WBENC logo to our website, we were traveling to special events designed to match diverse-owned companies with automotive suppliers. We learned about the supplier diversity culture and the efforts these OEMs make to give minority-owned businesses opportunities. For example, most of the major automotive companies host their own annual event for their suppliers and require them to report the results of these efforts each month.

However, the barriers to entry as a new supplier are still high. Companies may have competing agendas. While they are trying to increase their diversity spend, they may also be trying to consolidate their supplier base. The Tier-One and Tier-Two companies are looking for stable suppliers of a minimum size and the experience to provide internationally competitive prices. For many, the majority of their diversity spend is indirect, such as maintenance, repair and overhaul (MRO) products and other goods and services rather than critical production spend. OEMs want more diverse-owned direct parts suppliers that can help with production volumes and potentially contribute even more, but it takes significant time and investment to get them on board.

Certifying was worth the effort and is opening doors we could not have opened otherwise. If your company is pursuing auto, oil/gas, medical or government work, and you are women-owned, becoming certified with the WBENC makes good business sense.

To learn more about Pioneer Service Inc., look for a feature article in PM’s upcoming March 2017 issue.