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In today's ever-evolving business landscape, diversification is the key to long-term sustainability and growth. While most entrepreneurs and business owners are familiar with diversifying investments, there's another powerful strategy that can help safeguard your company's financial future: diversifying revenue streams. One of the most effective ways to achieve this diversification is through government contracting. In this blog, we'll explore how contracting with government agencies can not only provide a stable and consistent income but also open doors to new opportunities, expand your client base, and contribute to the overall resilience of your business. So, let's delve into the world of government contracts and discover how they can be a game-changer for your enterprise.
Set-asides, in the world of government contracting which trickles down to many private sector firms, serve as a powerful catalyst for diversifying your company's income stream. These special procurement programs are designed to ensure that a portion of government contracts is reserved exclusively for certain categories of businesses, including minority-owned, women-owned, veteran-owned, and small disadvantaged businesses. By participating in set-aside programs, your company gains access to a dedicated slice of the government contracting pie, which can be a game-changer for your bottom line. Not only do set-asides provide a reliable revenue stream, but they also present a unique opportunity to establish your presence in the government marketplace, expand your clientele, and tap into a wellspring of growth potential. In this blog, we'll take a closer look at the role set-asides play in helping your business diversify its income sources and thrive in today's competitive economic landscape.
Set-aside certifications are typically provided by government agencies or approved third-party organizations to designate certain businesses as eligible for government contracts or procurement opportunities. These certifications are often aimed at promoting diversity, supporting small businesses, or fostering economic development. The types of certifying bodies that offer set-aside certifications can vary depending on the specific program or initiative. Let’s start out with the three most common (or the ones, I am most familiar with, the Small Business Administration (SBA), National Minority Supplier Development Council (NMSDC), and the Women's Business Enterprise National Council (WBENC):
1. The U.S. Small Business Administration (SBA) offers various certifications and programs to support small businesses in the United States. As of my last knowledge update in September 2021, here are some of the key certifications and programs offered by the SBA:
- 8(a) Business Development Program: This program assists small businesses owned by socially and economically disadvantaged individuals. Participants can receive government contracts, access to mentorship, training, and other resources. To learn more and apply, visit the SBA's 8(a) Business Development Program page on their website.
- HUBZone Program: The Historically Underutilized Business Zones (HUBZone) program helps small businesses in economically distressed areas gain preferential access to federal procurement opportunities. Information and application details can be found on the SBA's HUBZone Program page.
- Women-Owned Small Business (WOSB) and Economically Disadvantaged Women-Owned Small Business (EDWOSB) Certification: These certifications provide opportunities for women-owned businesses to compete for federal contracts. You can find information on eligibility and the application process on the SBA's WOSB/EDWOSB Certification page.
- Service-Disabled Veteran-Owned Small Business (SDVOSB) and Veteran-Owned Small Business (VOSB) Certification: These certifications support businesses owned by service-disabled veterans and veterans. The SBA's SDVOSB/VOSB Certification page offers details on eligibility and the application process.
- Small Business and Small Disadvantaged Business Certifications: The SBA provides certifications for small businesses and small disadvantaged businesses (SDBs) that may qualify for certain federal contracting preferences. More information can be found on the SBA's Small Business Certification page.
- Native American 8(a) Certified Tribally-Owned and ANC-Owned Small Business**: This certification is specific to Native American-owned businesses. Details can be found on the SBA's Native American 8(a) Certification page.
The SBA also recognizes third-party certifying organizations for certain programs, such as the Women-Owned Small Business Federal Contracting Program. You can find a list of approved third-party certifiers on the SBA's website which you can link to https://certify.sba.gov/.
2. The National Minority Supplier Development Council (NMSDC) offers a range of services and resources aimed at supporting minority-owned businesses (MBEs) and facilitating connections between MBEs and corporate members. These services are designed to help MBEs grow, access procurement opportunities, and develop their business capabilities. As of my last knowledge update in September 2021, here are some of the key services provided by the NMSDC:
- Certification: The NMSDC certifies minority-owned businesses as Minority Business Enterprises (MBEs). This certification is widely recognized and can help MBEs qualify for procurement opportunities with corporate members of the NMSDC.
- Business Development: The NMSDC provides business development support, including educational programs, workshops, and seminars to help MBEs enhance their skills, expand their knowledge, and grow their businesses.
- Networking Opportunities: The NMSDC facilitates networking events, conferences, and matchmaking sessions that connect MBEs with corporate members and other potential business partners. These events create opportunities for MBEs to showcase their products and services and establish valuable relationships.
- Access to Capital: The NMSDC collaborates with financial institutions and organizations to help MBEs access capital and financing to support business growth and expansion.
- Supplier Diversity Advocacy: The NMSDC advocates for supplier diversity and encourages corporations to include minority-owned businesses in their supply chains. This advocacy work helps raise awareness about the importance of diversity and inclusion in business.
- Global Business Development: The NMSDC assists MBEs in expanding their business activities internationally by providing resources and guidance on global trade and export opportunities.
- Corporate Membership: For corporations, the NMSDC offers corporate membership opportunities. Corporate members gain access to a diverse pool of certified MBEs, fostering supplier diversity within their organizations.
- Supplier Diversity Program Support: The NMSDC helps corporate members develop and enhance their supplier diversity programs. This includes providing guidance on supplier diversity best practices and strategies.
- Training and Education: The NMSDC offers training programs and educational resources to help both MBEs and corporate members better understand supplier diversity and its benefits.
- Advocacy and Research: The NMSDC engages in research and advocacy efforts to advance the interests of minority-owned businesses and promote supplier diversity in corporate America.
- Matchmaking and Procurement Opportunities: Through events like the NMSDC Annual Conference and Business Opportunity Exchange, the organization facilitates matchmaking sessions where MBEs can connect with corporate representatives and explore potential procurement opportunities.
- Access to NMSDC Corporate Members: Certified MBEs gain access to a network of NMSDC corporate members, including many Fortune 500 companies, which can lead to valuable business partnerships and contracts.
3. The Women's Business Enterprise National Council (WBENC) is a well-established organization in the United States that focuses on supporting and promoting women-owned businesses. WBENC provides various services and resources to women entrepreneurs and plays a significant role in advancing supplier diversity and inclusion in corporate supply chains. Here are some key aspects of WBENC:
- Certification: WBENC certifies businesses that are at least 51% owned, operated, and controlled by women as Women's Business Enterprises (WBEs). This certification is widely recognized and respected by corporations, government agencies, and other organizations seeking to promote diversity in their supply chains.
- Networking Opportunities: WBENC organizes events, conferences, and networking opportunities that connect women-owned businesses with potential clients, corporate members, and government agencies. The WBENC National Conference & Business Fair is one of its flagship events.
- Education and Training: WBENC offers educational programs, workshops, and resources to help WBEs develop their skills, enhance their business capabilities, and navigate the complexities of supplier diversity programs.
- Corporate Membership: Corporations can become members of WBENC to support supplier diversity initiatives and gain access to a pool of certified women-owned businesses. Corporate members are committed to including WBEs in their supply chains.
- Advocacy and Research: WBENC advocates for policies and practices that promote women-owned businesses and supplier diversity. The organization conducts research to highlight the economic impact of WBEs and supplier diversity programs.
- Access to Contract Opportunities: Through WBENC's connections with corporate members and government agencies, certified WBEs can access contracting opportunities and bids that may not be readily available to businesses without certification.
- Mentorship and Business Development: WBENC provides mentorship programs and business development resources to help WBEs grow and succeed. This includes initiatives like the WBENC Energy Executive Program and various business accelerator programs.
- Supplier Diversity Development: WBENC assists corporations in developing and enhancing their supplier diversity programs, offering guidance and best practices to promote diversity and inclusion.
- International Opportunities: WBENC collaborates with organizations worldwide to expand opportunities for women-owned businesses in international markets, supporting global growth and trade.
It's important to note that WBENC certification is often a prerequisite for women-owned businesses seeking to participate in supplier diversity programs offered by corporations, government agencies, and other organizations. The certification process involves providing detailed documentation to verify ownership and control by women.
In conclusion, achieving certification from reputable organizations such as the Small Business Administration (SBA), the Women's Business Enterprise National Council (WBENC), and the National Minority Supplier Development Council (NMSDC) can be a transformative step for your business. These certifications not only open doors to government contracts and corporate procurement opportunities but also provide undeniable proof of your commitment to diversity and inclusion. They enhance your visibility, credibility, and competitiveness in the marketplace, positioning your company for sustainable growth and success. So, whether you are a small business, a women-owned enterprise, or a minority-owned firm, consider the remarkable advantages that certification can bring to your business journey. Embrace the opportunities that come with these certifications and let them be the driving force behind your continued expansion, innovation, and prosperity.
Before you sign off, I just want to mention that there is a part 2 (or Installment 2), that I highly recommend you check out. There are so many options out there. Check out our blog for an even deeper dive into certifications.