To say it’s been a challenging few years for women-owned businesses, and small businesses in general, is an understatement. The impact of Covid-19 on female business owners caused and left lasting impacts. With the number of women-owned small businesses decreasing by 25% in the early stages of the pandemic, impacts are still being felt.
Today, 42% of all U.S. businesses are owned by women (13 million), employing over 9.4 million workers. With an estimated 849 new women-owned businesses opening every day, women are fighting to earn their share of the market back and survive the pandemic.. To help product businesses scale, inventory funding is available – and it doesn’t have to cost so much that profitability takes a huge hit. Read on to learn more about the benefits of being a woman-owned business and resources available.
What are the pros and cons of owning a business as a woman?
Business owners, regardless of gender, face pros and cons. Women in particular though, may face a targeted set of pros and cons. Let’s take a look.
PROS
- You are the boss. Being your own boss means ultimate flexibility and control.
- Ability to meet family demands and needs personally and financially.
- Full control over your present and future career. As a business owner, you lay the roadmap and invest time where it’s most suitable.
- Strong Emotional Intelligence. Studies have proven that female business owners demonstrate a high Emotional Intelligence score. This means you have the ability to better understand your own emotions and guide others.
- Support is all around. From family members to friends to networks specifically geared towards female entrepreneurs, there are many support systems to help you succeed.
CONS
- A lot of responsibility is associated with being your own boss which can be burdensome. Remember, as a business owner, there’s no paid time off per say. Before starting a venture you should be confident and comfortable with managing time, making decisions, exploring new things, and getting help when needed.
- Personal and family needs may suffer. It’s important to draw boundaries as a business owner. Your family and personal needs should remain a priority – even though you’ve put your blood, sweat, and tears into your business.
- Risks may increase as a paycheck every so often depends completely on your efforts.
- Self motivation can be a struggle, but is necessary for success.
Top benefits for women based business owners
Minority businesses are recognized, and while women are not typically considered as a minority, they are considered by some as a disadvantaged group. In pursuit of supporting more women–owned businesses, consumers often search for or favor them. Getting certified as a women-owned business can help you take advantage of more benefits such as the following.
- Gain a competitive advantage. Government entities and other companies often seek women-owned businesses to work with. Registering as a women-owned business can increase your visibility, thus giving you an advantage. At least 5% of all federal contracting dollars are invested in women-owned small businesses. Plus, private companies can get tax breaks for working with women-owned businesses.
- Increased access to educational and networking opportunities. Mentorship opportunities are available for women-owned businesses with a WOSB or WBE certification. Other opportunities can include invites to annual summits, webinars, networking functions, and so forth.
- Lead generation. Leads are important, as is word-of-mouth. While creating a reliable reputation for your business is critical, certifying your business can allow you to submit bids for government contracts, thus increasing your business potential and earning. Businesses that obtain WBE certification can also access a database of Fortune 500 companies that may be interested in supplier diversity.
How to get certified as a woman based business owner
You may want to certify your woman-owned business to get more access to private and government contracts. There are three types of certificates you can obtain, including:
#1. Women-Owned Small Business (WOSB) program
To be eligible for the WOSB program, a business must:
- Must qualify as a small business under the definition set by the SBA size standards
- Minimum ownership requirement of 51% female who are U.S. citizens
- Women must manage day-to-day operations and be involved with long-term decisions
#2. Economically Disadvantaged Women-Owned Small Business (EDWOSB)
To be eligible for the EDWOSB program, a business must:
- Meet requirements (see WOSB program requirements for details)
- Minimum of one woman owners with a personal net worth of $75,000 or less. If there is more than one female owner, all must meet requirements.
- Minimum of one woman owner with $350,000 or less in adjusted gross income based on previous three years. If there is more than one female owner, all must meet requirements.
- Minimum of one woman owner with $6 million or less in personal assets. If there is more than one female owner, all must meet requirements.
#3. Women’s Business Enterprise (WBE)
To be eligible for a WBE certification, a business must:
- Must be a for-profit organization located in the U.S.
- Ownership must be 51% female, or a group of women, but for an inheritance, contributed a proportionate amount of capital to gain ownership
- If there’s a governing board, it must be controlled by one or more women
- Top executive officer must be a woman and must have technical expertise in the firm’s primary business function
- All female business owners must be legal residents or U.S. citizens
To apply for the WOSB or EDWOSB certifications, it’s free. You can apply directly through the U.S. Small Business Administration’s (SBA) website. You will need the following:
- Active registration in the System for Award Management.
- Birth certificates, naturalization papers or unexpired passports for each female business owner.
- Articles of organization/incorporation, partnership or joint venture agreements, voting agreements, and any amendments to specified documents.
- Issued stock certificates and stock ledger.
- Assumed/fictitious name certificate.
- For EDWOSB, your three most recent personal tax returns will be required. Include W-2s and all schedules for each woman business owner and her spouse.
- For EDWOSB you will need an IRS Form 4506-T, Request for Tax Transcript for each woman business owner and her spouse.
To apply for WBE certification, the application fee and re-certification fees are the same based on the company’s revenues ranging from $350 to $1,250 (certificates last for one year). There is also a scholarship fund for first-time applicants with under $500,000 in revenue. You will need the following:
- Commercial tax returns for 3 previous years
- Financial statements corresponding to tax returns listed above
- Debt instruments
- Commercial bank signature authorization card and corporate banking resolution
- Proof of capital and/or equity investment by female owners
- Employee list
- Most recent employee payroll
- W-2’s and/or 1099 forms from every owner, officer, or director
- Written business history
- Professional or local business licenses if applicable
- Resumes of all owners, directors, and key personnel
- Proof of gender
- Proof of Citizenship or legal residency
- And more…
Do grants for women owned businesses exist?
Yes! There are several grants available to women-owned businesses. Below are some examples:
- Launch program
- Visa’s She’s Next program
- Amber Grants
- SBIR & STTR programs
- Ms. Foundation for Women
- Cartier Women’s Initiative Award
- GrantsforWomen.org
Are there tax benefits to being a woman-owned business?
Yes. If you’re looking to hire employees, tax credits are available. The Work Opportunity Tax Credit allows a credit against your business income tax up to 50% of wages when hiring from populations such as former state or federal assistance recipients, ex-offenders, or veterans. Maximum wages will vary depending on the targeted group, with a range of $6,000 – $24,000 per annum.
Also, if you are a minority business in a low-income area, you can qualify for the New Market Tax Credit (NMTC).
Tips to qualify as a woman based owned business
Our best tip is to make sure you at least meet the basic requirements, which include the following:
- Must be at least 51% owned and controlled by women who are U.S. citizens
- Have women manage day-to-day operations who also make long-term decisions
Other resources for women entrepreneurs
If you’re looking for good guidance, consider reaching out to a mentor. Some places that you can find a female mentor include:
- Ladies Get Paid
- 27 Angels
- BOSS
- Women Who Startup
- Female Founders Association
- Lean In Network
- Awesome Women Entrepreneurs
If you’re looking for funding, you may be surprised – or not – that only 16% of small business loans go to women entrepreneurs. Places to look for funding include:
- The SBA’s Office of Women’s Business Ownership
- Entrepreneurial Winning Women
- Female Founders Fund
- SoGal Ventures
- The Tory Burch Foundation
- Women’s Venture Fund
- Women Who Startup
- Kickfurther
How Kickfurther can help
Kickfurther funds up to 100% of your inventory costs on flexible payment terms that you customize and control. With Kickfurther, you can fund your entire order(s) each time you need more inventory and put your existing capital to work growing your business without adding debt or giving up equity.
Why Kickfurther?
No immediate repayments: You don’t pay back until your new inventory order begins selling. You set your repayment schedule based on what works best for your cash flow.
Non-dilutive: Kickfurther doesn’t take equity in exchange for funding.
Not a debt: Kickfurther is not a loan, so it does not put debt on your books. Debt financing options can sometimes further constrain your working capital and access to capital, or even lower your business’s valuation if you are looking at venture capital or a sale.
Quick access: You need capital when your supplier payments are due. Kickfurther can fund your entire order(s) each time you need more inventory.
Kickfurther puts you in control of your business while delivering the costliest asset for most CPG brands. And by funding your largest expense (inventory), you can free up existing capital to grow your business wherever you need it – product development, advertising, adding headcount, etc.
Closing thoughts
Overall, you can see that there are many benefits to being a women-owned business. Not only are there unique funding opportunities for female entrepreneurs, but there are also large support networks and plenty of fans. But, being an entrepreneur is not easy, in fact 70% of new businesses fail to keep their doors open more than five years. However, now that you know about the many creative funding opportunities like grants and Kickfurther, you will give yourself a leg up on the competition and increase your chances of being the 30% that make it over the long-term. Knowledge is power; and you now have more power than ever to make your dreams turn into reality!
Interested in getting funded at Kickfurther? Here are 3 easy steps to get started:
#1. Create a free business account
#2. Complete the online application
#3. Review a potential deal with one of our account reps & get funded in minutes
Learn more about inventory financing options for women entrepreneurs from Kickfurther.
