Women-Owned Small Business

Women-Owned Small Business
Name	Women-Owned Small Business
Type	Business designation
Industry	Small business
Founded	1980s
Area served	United States

Women-Owned Small Business A Women-Owned Small Business designation identifies small enterprises principally owned and controlled by women for purposes of federal contracting, procurement goals, and targeted assistance. The designation intersects with policies administered by agencies such as the Small Business Administration, statutes like the Small Business Act, and court decisions affecting affirmative action and contracting practices. It shapes participation in programs linked to the Federal Acquisition Regulation, procurement set-asides, and supplier diversity initiatives used by corporations such as General Motors, Walmart, and PepsiCo.

Definition and Criteria

The formal criteria for qualification typically require at least 51% ownership and control by one or more women, day-to-day management by women principals, and certification under rules established by the Small Business Administration and the Department of Defense. Businesses must meet size standards set by the Small Business Administration size regulations tied to industry classifications in the North American Industry Classification System. For the Women-Owned Small Business set-aside in federal procurement, documentation often references ownership records, corporate governance documents, and eligibility under the Federal Acquisition Regulation and related procurement statutes. Jurisdictional interpretations have been contested in cases before courts such as the United States Court of Appeals for the Federal Circuit and sometimes reach the Supreme Court of the United States.

History and Development

The evolution traces through affirmative procurement policies of the late 20th century, influenced by landmark initiatives like the Women’s Business Ownership Act of 1988 and programmatic expansions under successive administrations. Early market interventions paralleled efforts by organizations including the Small Business Administration and advocacy groups such as the National Association of Women Business Owners and the U.S. Women’s Chamber of Commerce. During the 1990s and 2000s, federal rules and corporate supplier diversity programs advanced, intersecting with policy debates involving entities like the General Services Administration and legislation debated in the United States Congress. Court rulings and administrative guidance—from agencies such as the Department of Labor and the Office of Management and Budget—shaped contemporary certification regimes.

Certification and Federal Programs

Certification pathways include self-certification, third-party certification by entities like the National Women Business Owners Corporation or state-level agencies, and federal certification administered by the Small Business Administration through the 8(a) Business Development Program and specific Women-Owned Small Business federal contracting procedures. Programs tied to contracting opportunities include set-asides, the Women-Owned Small Business Federal Contract Program, and subcontracting plans enforced in part by the Federal Acquisition Regulation and monitored during procurements by agencies such as the Department of Defense, Department of Veterans Affairs, and General Services Administration. Private-sector certification programs by organizations like the Women's Business Enterprise National Council also facilitate corporate supplier diversity sourcing used by companies such as AT&T, Microsoft, Amazon (company), and Bank of America.

Economic Impact and Statistics

Women-owned businesses contribute significantly to employment and revenue generation, with data often collected and reported by the U.S. Census Bureau through the Survey of Business Owners and analyzed by research centers such as the Brookings Institution, Pew Research Center, and the Kauffman Foundation. Reports show growth in the number of women-led firms comparable to trends reported by the National Women’s Business Council and used by policymakers at the Department of Commerce and Federal Reserve. Sectoral concentrations appear in professional services, healthcare, and retail—domains where companies compete with multinational firms like Johnson & Johnson, CVS Health, and Starbucks—and influence supply chains for corporations such as Apple Inc. and IBM.

Challenges and Barriers

Barriers include access to capital from sources like Bank of America, venture capital firms in Silicon Valley, and community lenders; disparities persist in interactions with institutions such as the Small Business Administration loan programs and private equity markets. Market access obstacles involve contracting barriers within agencies like the Department of Defense and procurement systems used by corporations like ExxonMobil and Boeing. Legal and regulatory hurdles have been litigated in courts including the United States Court of Appeals for the Second Circuit and the United States District Court for the District of Columbia, while social factors are addressed by advocacy bodies such as the National Organization for Women and the American Association of University Women.

Support Programs and Resources

Support mechanisms comprise federal programs offered through the Small Business Administration, mentorship and training via entities like SCORE, incubators and accelerators in networks connected to universities such as Harvard University, Stanford University, and Massachusetts Institute of Technology, and nonprofit intermediaries including Accion and the National Association for Female Executives. Corporate supplier diversity offices at firms such as Coca-Cola, Intel, and Procter & Gamble provide procurement pipelines, while philanthropic initiatives from foundations like the Bill & Melinda Gates Foundation and the Ford Foundation fund capacity-building. Local and state resources include development programs by agencies like the New York State Department of Economic Development and the California Governor's Office of Business and Economic Development.

Notable Examples and Case Studies

Prominent examples of women-led companies and programs include founders and leaders associated with firms such as Spanx, The Honest Company, Eventbrite, Stonyfield Farm, Anita Roddick's The Body Shop legacy, and executives who have engaged in supplier diversity with corporations like Walmart and Target Corporation. Case studies by research organizations such as the Sloan School of Management at Massachusetts Institute of Technology, the Harvard Business School, and think tanks like the Brookings Institution illustrate pathways from startup to federal contracting success, often citing partnerships with accelerators linked to Y Combinator and investment rounds involving firms in New York City and San Francisco.

Category:Small business