Women-owned businesses are big news in today’s business world. According to the National Association of Women Business Owners, close to 12 million businesses owned by women in the U.S. employ nearly 9 million people and generate more than $1.7 trillion in revenues (2017 figures). More than one thousand new women-owned businesses are launched every day. The largest market segments are educational and social services, healthcare, recreation, and entertainment, but businesses owned by women have achieved success in all market segments.
Although women own 40 percent of U.S. businesses, they receive just 5 percent of equity capital. The Small Business Administration (SBA) is working to close the financing gap by opening up more business financing for women opportunities to found and grow their businesses.
The SBA is the force behind giving women-owned businesses access to the government and commercial supply chain. The Women’s Contracting Rule mandates that federal agencies set aside contracting opportunities for women-owned small businesses in more than 300 industries where women are underrepresented, which includes eligibility for large government contracts.
Certification Requirements for Women-Owned Business Opportunities
Establishing a successful women-owned small business begins with strategies that take advantage of the special programs and considerations given to businesses owned by women. The paperwork can seem daunting, but just take it one step at a time and reach out to your local SBA if you have questions.
To document that your business is women-owned thus eligible for government programs, the following criteria need to be met:
• United States citizen in business for at least six months;
• A woman must own at least 51 percent of the business;
• The female owner must hold the highest position in the company and be active in daily management and the strategic direction of the company;
• Documents that can establish leadership in the company can include hiring and firing of personnel and planning documents. Be prepared to prove leadership in several ways.
Finding Business Financing for Women
Grants.gov offers small business grants for women and men, but this site is a great starting point for women looking for federal grants. The website Fundera lists many places that provide grants for start-up funds for women-owned business and also provides the criteria of each grant-making organization listed. Grants range from $500 to $100,000. Some of the grants are targeted to an industry and others forward the grant-making organization’s agenda. For example, the Open Meadows Foundation provides grants to projects that promote gender, racial, and economic justice. The HER Challenge offered by the Small Business Administration is for businesses that provide products and services that enhance the lives of women and families.
But do not stop with web browsing for information on women-owned business opportunities. Attend networking events, visit your local Small Business Association, and ask people who run businesses similar to yours. New grants are offered frequently, so keep your research on-going and current.
Business Financing for Women: Preparing the Grant Application
First of all, make sure you understand every one of the grant requirements and that your business is one the organization is likely to fund. A few grants may require a simple letter stating the need and what will be done with the grant money. Typically, grant applications are more complicated and require many components. This site is a good resource for preparing all the components you may be asked to provide. A competent grant writer could probably complete it in far less time than you could, and this may be a sound investment.
If the budget does not allow this expense, just take on one component at a time and work your way through it. If you can divide the work with colleagues, make sure you divide it according to expertise. The person who keeps the budget should provide the budget. Strive for clear, simple language and correct use of grammar and punctuation. Do not be your own proofreader or editor. If you are a one-woman business, have someone else read over the application.
After the first grant is completed, you will likely be able to reuse much of it for additional grants. A current and proposed budget is a typical component. One thing that needs to change with each grant request is the cover letter. This should be specific to the grant maker and it should make clear that you understand their organization and how your company complements and enhances its objectives.
Congratulations on planning to open or enlarge a women-owned business. The SBA is your go-to association for your questions and concerns.
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