## The Shifting Value of Small Business Certifications
Erin LaCombe found a specialized niche for her firm, but it’s far from a safe harbor. Like many small business owners, she gained a competitive advantage by earning an official stamp of approval validating her firm’s status as woman-owned.
Now,the value of such stamps – known as certifications – is being challenged by abrupt shifts in federal policy rippling through the small business economy. Small business owners must reassess the importance of completing the expensive and time-consuming certification process. Simultaneously occurring, the organizations that operate the certification machinery are seizing on new ways to stay relevant.
Twenty years ago, LaCombe founded CV Strategies, which concentrates on complex and technically challenging communications surrounding utility, construction, water districts and other high-profile projects.Her 20-person team helps clients make their cases to the public, regulators and public officials.Even in that rarified category, competition is “brutal,” LaCombe told Straight Arrow News (SAN). “You’re one of hundreds of competitors that ‘fit the qualifications,'” she said. “I have to stand out. once I’m in the room, our work carries it, but I’m looking for the differentiator, and this is a big one.”
The “big one” is a certification from the California Public Utilities Commission validating that CV Strategies is, actually, owned and operated by a woman. With that certification in hand,she is a favored partner for bigger companies that don’t have status as a woman,ethnic or other type of minority business.
For decades, corporations and governments at all levels have aimed to level the economic playing field by granting a competitive edge to small, presumably disadvantaged businesses. Certifications have been pivotal, as they ensure that small companies’ claims are valid.
behind the scenes, the certification process has been a cornerstone of status and revenue for a few nonprofits. But new data from the National Minority Supplier Development Council found that in 2024, small businesses that didn’t renew their certification had higher revenues than peers. the NMSDC reported in its just-released annual report, diverse small businesses accounted for nearly $600 billion in production and supported 2.2 million American jobs.
### Diversity in the bull’s-eye
Dismantling long-running diversity programs has been a hallmark of the Trump governance’s first year. On Jan. 21, the administration ordered the Office of Federal Contract Compliance Programs to stop enforcing regulations that required federal contractors to follow certain supplier diversity directives by April 21. At the Small Business Administration, programs intended to help small, disadvantaged and women- and minority-owned businesses are on hold.
Inclusive Supply Chains Boost Small Businesses
Erica T.Kuhlmann,CEO of the Women’s Business Development Center in Chicago,said government contracting rules influence how companies do business,strengthening the case for helping small businesses grow through certification and related programs.
“Companies are still committed to diverse and inclusive supply chains as they see them as a good long-term investment,” Kuhlmann explained. “Companies have changed how they talk about it – they now call them ‘inclusive supply chains.’ They are focused on the impact of investing in the small businesses in their communities. The focus has shifted from how much money they spend with diverse suppliers to the positive changes in the community.”
Showing the positive effects of spending with small businesses is a valuable service for Kuhlmann’s agency.
“We already track results for our grants.We can offer to track the impact for companies – that’s a good prospect for us. We have the systems and tools to do that,” she said.
Jill Sasso, COO of the Women’s Business Enterprise National Council (WBENC), agrees. WBENC is a nonprofit that sets national standards for certifying businesses owned by women. WBENC’s 14 regional partners handle the actual certification process.
WBENC has always highlighted its network of 21,000 certified women-owned businesses as a valuable networking opportunity, along with the large corporate contracts that are a major benefit for many small businesses, said Sasso.
During the pandemic, WBENC found that holding its workshops and networking events online allowed it to include a wider range of small businesses. Now,more of its programs are open to everyone.
While still focused on its main goals,WBENC also emphasizes the job-creation aspect of its work,said Interim President and CEO Nedra Dickson.Women-owned businesses “fill a need in the supply chain,” she said. “There’s a demand. That’s significant. The goal is still to create jobs and businesses in the U.S.”
The Grand Rapids Model
Grand Rapids, Michigan, may be a good example of how to do this.
As 1976,the city has helped small businesses owned by people facing significant challenges,Amaad Hardy told SAN. He i