Whether your market is local, statewide, nationwide or global, no matter what industry your business may be in, one thing that most business owners have in common is that competition is fierce.
When competing against so many companies for clients, often the business owner will eye government entities. However, they will soon discover that competition for government contracts is just as intense.
Business certification allows a business owner to gain an edge on the competition while trying to sell to the government. If a business owner takes this route, they will find there are many opportunities for a variety of certifications, as well as many levels of operation they could qualify for, and many levels of government they can work with.
There are prospects for shelter contracts and sub-contractor projects and certification opens the doors to diversity programs with the various county, state, federal and even corporate entities.
If a business is 51 percent majority-owned by a woman, a minority or a Veteran, certification could present opportunities for a business to grow.
If a business owner is considering seeking out certification, there are many things to consider, such as the differences between entities, whether or not certification guarantee contracts and how much financial and time dedication is required?
Certifications Are Not One Size Fits All
If a business owner is seeking certification, it is important to understand that certifications are typically not transferable between government entities. If a business owner is certified at the state level, that certification will be recognized by all state agencies, but not necessarily individual counties or cities within that state.
Each entity has its own criteria or guidelines that they follow. Criteria that each consider is pretty standard across the board:
There has to be majority owner (owns at least 51 percent) who can demonstrate management and control of the business. Ownership itself is not enough to meet the standard in today’s climate.
Who is that owner? Is that owner a female, LGBT, a minority person by ethnicity, or a veteran or a service-disabled veteran?
Must be able to provide detailed proof that they are the majority owner
Certifications Do Not Guarantee Contracts
A common misconception about being certified is that the offers are going to start pouring in. This is not a realistic expectation. Becoming certified is simply a marketing tool. And like any other tool that is available to you, you have to be able to build and develop a strategy on how you’re going to use it to your benefit.
However, some government agencies utilize what they call shelter markets or preferred markets. Though the language is varied, the goal is still the same. The government seeks out certain businesses for individual opportunities. So, there is a very complex equation that they go through in determining if an opportunity can be sheltered or preferred. If there are enough certified companies that could potentially respond to that opportunity, only those businesses that are certified become privy to it.
Should I Collect Them All?
Business owners must continue to be strategic with their time. Each certification requires a lot of time from an applicant. Just gathering all of the documents for each certification takes time.
A business owner could seek certifications from each government agency, but they must realize the time and effort that is needed for each one.
The most effective way to utilize this tool is to create a strategy to determine which government entity is right for the business and dedicate time and resources to that. Because again, just because you receive a certification, it does not mean you are guaranteed a contract. You still have to develop a marketing strategy for each one, and they all have different requirements. Also, some certifications cost money or require you to become a member, so it could also be a quite expensive endeavor to seek out more than one certification.
Becoming certified is a benefit for most business owners. Taking the time to do your research or seeking out the help of no-cost economic development resources to help you determine which certification is right for your business is the key to success.
Yanina Rosario, CGBP is an associate director and business consultant at the Florida SBDC at University of South Florida.