Benefits of Being a Woman-Owned Business

It’s been a difficult couple of years for ladies in enterprise (in 2020, girls skilled a “she-cession”), and feminine enterprise homeowners had been no exception. Unsurprisingly, the influence of Covid-19 was substantial; the Nationwide Girls’s Enterprise Council (NWBC) says the variety of women-owned small companies fell by 25 % within the early days of the pandemic. Thankfully, it seems to be like that downturn is up to now. The Enterprising Investor says, “The long run is feminine” and factors to pre-pandemic statistics that present women-owned companies (notably startups) “could also be greater than we expect.”

And the newest statistics now we have about feminine enterprise homeowners from the NWBC Report present they personal 42 % of all companies within the U.S. (that’s about 13 million feminine entrepreneurs), make use of 9.4 million individuals, and earn $1.9 trillion in revenues. Even the feminine enterprise homeowners who had no staff had complete revenues of greater than $229 billion.

Advantages of proudly owning a enterprise as a girl

There are numerous causes a girl can profit from proudly owning a enterprise. Maybe most significantly, it will get you away from the glass ceiling that also limits how a lot cash girls in enterprise can earn and the way excessive they’ll rise at many firms within the nation.

Getting licensed as a girl enterprise proprietor

For a lot of girls, entrepreneurship is the means to a limitless future. So how are you going to make the most of that? A technique is to get licensed. When you’re a feminine enterprise proprietor, getting your small business licensed affords a number of advantages, together with rising your organization’s visibility, getting access to alternatives you won’t in any other case have, and securing the possibility to win company or authorities contracts.

There are two varieties of certification as a woman-owned enterprise:

1. Girls’s Enterprise Enterprise (WBE): This designation is utilized by personal sector organizations and lots of state and native governments looking for women-owned corporations to conduct enterprise with.
2. Girls-Owned Small Enterprise (WOSB): This designation is utilized by federal authorities companies on the lookout for women-owned corporations to do enterprise with. The Economically Deprived Girls-Owned Small Enterprise (EDWOSB) is a subcategory of WOSBs for those who meet the factors for being economically deprived.

Many years in the past, the federal authorities set a purpose of awarding no less than 25 % of federal contracts for small companies and 5 % for feminine enterprise homeowners. Girls enterprise homeowners can, in fact, compete for any kind of federal authorities contracts. However some contract alternatives are solely out there to feminine enterprise homeowners.

If you wish to compete for federal contracts, try the Small Enterprise Administration’s (SBA)  WOSB (Girls-Owned Small Companies) federal contracting program. As famous above, sure girls entrepreneurs might also be eligible to be licensed as Economically Deprived WOSBs.

The certification course of for WOSBs and EDWOSBs has not too long ago modified, making it “simpler for certified small companies to take part” in this system by bettering the shopper expertise, in keeping with the SBA.

Discover out concerning the free certification course of by going to this SBA web site. Be taught extra about your choices or get solutions to FAQs. And there’s much more info within the  beta.Certify Information Base.

Non-public corporations doing enterprise with the federal authorities could also be required to contract with a sure proportion of women-owned companies. Getting licensed as a WBE can provide your small enterprise a bonus towards greater companies when making an attempt to land these contracts.

As not too long ago as late 2020, companies had been in a position to self-certify; nevertheless, you may not accomplish that. Companies should undergo an authorized third-party group or the SBA web site at certify.sba.gov. Some organizations may also help you with the WBE or WOSB certification course of, together with:

Every group has particular tips, relying on the kind of certification you’re looking for. To qualify for WOSB certification, your small business should:  

• Be a small enterprise as outlined by the SBA (dimension of the corporate might differ by NAICS code)
• Be no less than 51 % owned and managed by girls who’re U.S. residents
• Have girls handle day-to-day operations and likewise make long-term selections

To qualify as an EDWOSB, your small business should:

• Meet all the necessities of the ladies’s contracting program
• Be owned and managed by a number of girls, every with a private internet value lower than $750,000
• Be owned and managed by a number of girls, every with $350,000 or much less in adjusted gross earnings averaged over the earlier three years
• Be owned and managed by a number of girls, every with $6 million or much less in private property

To get licensed as a WBE by the WBENC, as an illustration, your organization should be no less than 51 % owned, managed, operated, and managed by a girl or girls. “This implies a number of girls will need to have unrestricted management of the enterprise, a demonstrated administration of day-to-day operations, and a proportionate funding of capital or experience.”

When you’re already licensed by way of a 3rd celebration or the SBA, you’ll must get recertified. Nevertheless, for self-certified WOSBs or EDWOSBs with energetic WOSB or EDWOSB set-aside contracts (these contracts the federal government has restricted to or “put aside” for competitors amongst small companies solely), your small business continues to be licensed all through the lifetime of the contract.

Along with certifying female-owned companies, some certification organizations provide member advantages corresponding to instructional packages, conferences, networking occasions, and matchmaking alternatives.

Girls enterprise homeowners and cash

Discovering funding has lengthy been a battle for feminine enterprise homeowners. In 2021, feminine founders secured simply 2 % of all enterprise capitalist (VC) funding within the U.S. And whereas it’s just a few years outdated, the stats proven within the final report from the U.S. Senate Committee on Small Enterprise and Entrepreneurship, twenty first Century Obstacles to Girls’s Entrepreneurship, haven’t modified all that a lot. That report confirmed girls obtained solely 16 % of all typical small enterprise loans. 

When you’re a female-owned enterprise on the lookout for a small enterprise mortgage, you’ve gotten a number of choices, together with:

NerdWallet simply named the “greatest small-business loans for ladies,” and Fundbox is proud to be on that listing.

The SBA doesn’t instantly situation enterprise loans however works with companion lenders to ensure loans. SBA lending packages embody:

• 7(a) loans: That is the SBA’s commonest mortgage program and has a most mortgage quantity of $5 million.
• 504 loans: These loans can be found by way of Licensed Growth Corporations (CDCs), that are the SBA’s community-based companions. The CDC/504 Mortgage Program offers long-term, fixed-rate financing of as much as $5 million. To be eligible for a 504 Mortgage, your small business should: 
  • Function as a for-profit firm in the USA or its possessions
  • Have a tangible internet value of lower than $15 million
  • Have a median internet earnings of lower than $5 million after federal earnings taxes for the 2 years previous your utility
• Microloans: These are small enterprise loans of lower than $50,000. Every lender units its personal lending and credit score necessities for microloans, and normally, some kind of collateral and the private assure of the enterprise proprietor are required.

Grants for ladies

In contrast to small enterprise loans for ladies, grants don’t must be paid again, making them a wonderful method for feminine enterprise homeowners to get cash. Nevertheless, there may be heavy competitors for grants.

If you apply for a grant for ladies, you’ll want to do your due diligence. Fastidiously verify the eligibility necessities and ensure to file your utility on time.

Listed below are some grant packages for feminine enterprise homeowners to look into:

Amber Grants: The $10,000 Amber Grants from WomensNet are awarded month-to-month. One of many 12 month-to-month winners additionally receives an extra $25,000 Amber Grant.

Cartier Girls’s Initiative Award: This international grant fellowship program selects three fellows for every international area; every winner receives a $100,000 grant, with second and third-place winners receiving $60,000 and $30,000 grants, respectively.

The Halstead Grant: This can be a grant to a brand new jewellery designer who primarily works with silver. The winner will get $7,500 in startup capital and $1,000 in merchandise. Award utility ends August 1st, 2022.

Tory Burch Fellows Program: Based by design entrepreneur Tory Burch, this system chooses as much as 50 Fellows yearly, who every obtain a $5,000 grant, entry to a non-public on-line peer neighborhood, and a visit to Tory Burch headquarters for 5 days of networking and workshops.

Many native grants for ladies are additionally out there, together with:

GrantsforWomen.org affords a database of alternatives for ladies throughout industries. Most of the grants discovered listed here are for nonprofit organizations; nevertheless, there are some out there for-profit companies.

Grants.gov is a central clearinghouse for details about federal authorities grants.

Are there tax advantages to being a woman-owned enterprise?

As you may see from the data above, there are numerous helpful packages and helps that make it worthwhile being a girl in enterprise at the moment; nevertheless, tax breaks don’t issue into the equation. Neither the federal nor state governments give any particular consideration to women-owned companies in terms of the tax code.

Sources for ladies entrepreneurs

One other profit of getting a woman-owned enterprise is the help and assist you will get. Girls enterprise homeowners are usually very collaborative, so don’t hesitate to ask different feminine enterprise homeowners for recommendation.

It’s also possible to get assist out of your native Small Enterprise Growth Middle (SBDC), SCORE workplace,  Girls’s Enterprise Middle, Ascent, a brand new studying platform from the SBA, and the SBA’s Workplace of Girls’s Enterprise Possession. Within the case of every of those entities, the primary purpose is to assist empower feminine enterprise homeowners.

Prepared for extra?

Apply Now for funding and discover out if you happen to qualify at the moment.

Disclaimer: Fundbox and its associates don’t present tax, authorized or accounting recommendation. This materials has been ready for informational functions solely, and isn’t supposed to supply, and shouldn’t be relied on for, tax, authorized or accounting recommendation. You must seek the advice of your personal tax, authorized and accounting advisors earlier than partaking in any transaction.