As more and more compressed gas distributor owners get closer to retirement age, they are faced with the decision to either pass ownership of their business to their children, relatives, or consider selling it.
For family-owned businesses that are looking to transition ownership to someone in their family, there are several additional legal and financial steps that will most likely be required. And if the owner has a daughter or female relative, there may be an additional opportunity to consider: converting the family-owned business into a 51% woman-owned business.
If you or someone you know is in this situation, there may be some alternatives to consider as you try to transition your company into a woman-owned business. What’s more, there may be additional opportunities you can create for the future.
But becoming a certified WBE/WOSB company (Women’s Business Enterprise and Woman Owned Small Business) is no easy task if you are not already operating as a woman owned business. The process of qualifying as a new business seems to be much easier and faster because the owner is usually building from the ground up as ‘new’.Whereas, if your existing business is family owned, then planning for additional time and costs need to be allocated to make sure the company is truly woman owned. This will include modifying your legal documents, accounting books, etc.
The Women’s Business Enterprise National Council (www.WBENC.org) is an excellent resource, and they will walk you through the pre-certification process, schedule an on-site visit, and they will need to conduct an audit of your company’s financials. This helps keep the WBE organization genuine and eliminate companies that may try to sneak in that would not actually qualify as “woman-owned”.
To date, the number of certified WBE women-owned businesses have grown to a total of roughly 17,000 companies. Most of the growth has been in the Service industry at 63% of that total, while the chart below shows a much smaller growth rate of 16% for women-owned businesses in the manufacturing sector. Of which, I think it is safe to say women-owned compressed gas businesses would be a much smaller percentage as a niche. On the positive side, there is tremendous future growth potential for women-owned businesses in the industrial gas industry.
Once you begin to conduct your own research and try to justify how your company would benefit as woman-owned certified business, finding the information might be challenging until you are able to contact the WBENC. The map opposite shows WBENC’s 14 Regional Partner Organizations. We found the WBENC-Midwest groups out of Chicago and St. Louis to be particularly very helpful.
Relating to the practical aspects of converting to WBE/WOSB there are several additional things to consider that can directly relate to the bottom line of your business operations. Based on my opinion, experience, customer feedback, and research, here are several pros and cons to consider before your company takes the next step. Refer to the Pros/Cons list below.
Topics To Consider When Converting To A WBE/WOSB Business
• Access to direct bid contracts with both clients, distributors, and suppliers as qualified subcontractors
• Qualify to bid on State, FED, EDU, MED, MIL and other government funded projects
• Impressive networking opportunities with loyal WBE members
• Hiring dedicated WBE staff can help ramp up and accelerate overall prospecting activity
• Qualify as either primary contractor or subcontractor depending on bid specs
• Inclusion enforced by corporations and government agencies help ensure all qualified parties are considered in the bidding process
• WBE sales cycles seem to be much faster than our standard business sales cycles
• WBE’s annual audits help keep applicants honest and WBE membership clean
• Factor 6-12 months to qualify and complete WBE and WOSB certifications
• Expect 3-6 months to convert your family-owned business to a 51% woman-owned business
• Factor additional expenses for your legal and accounting fees
• Siblings, family members, and/or business partners may not initially agree to the 51% women-owned conversion due to history and team dynamics
• WBE requires additional time/costs to recertify annually. Time consuming, but doable.
• May require additional marketing costs to promote the WBE/WOSB certifications
• Additional employee expenses may be needed to help launch your WBE/WOSB business
• Your new WBE employee/department could become too political rather than business profit centric if not managed properly
• Government related bid projects have much longer sales cycles than standard sales cycles
An additional source to consider that is much more focused towards the compressed gas industry is found at GAWDA’s website. They have a dedicated web page that specifically covers Women of Gases & Welding. They have a well-organized web page that outlines their leadership team, agenda, future events, and have excellent additional resource hyperlinks to refer to.
Next month will mark the first full year as a certified WBE (Women’s Busines Enterprise) company for Label Solution Inc. In addition, this past February, we received our WOSB (Woman Owned Small Business) Certification through both the WBENC organization and the Small Business Administration. Even with all the chaos of last year’s pandemic fallout and presidential election, both new certifications have already proven to be a good investment to our product label business.
Why did Label Solutions convert their existing business to a WBE company? The answer is that we simply listened to our customers. Plus, we saw strong revenue potential in how the women-owned businesses networked with one another. Back in 2018, we received several requests from our customers and prospects about how they were proactively trying to include WBE and MBE (Minority Owned Businesses) businesses as part of their corporate goals and initiatives.
Obviously, it is not required for women business owners to join either the WBE/WOSB organizations. But there seems to be better opportunities available when having both certifications let alone just one. The WBE network gives you the opportunity to do business with other WBE members and WBE’s corporate sponsors throughout the US.
While the advantage to being a WOSB is that it qualifies your company to compete on government funded bid contracts for municipality, state, and federal agency projects. Keep in mind these agencies include K-12 schools, universities, military, medical, most governmental departments, and all their prime contractors.
Agencies that do business with WOSB companies can take full advantage of the prime contractor and/or subcontractor bid status by allowing the government client to qualify for two (2) check marks that help comply with their government funded guidelines. And since we are WOSB certified, it means that the advantage is both a Woman-Owned & Small Business.
Karen Stevens, President/co-owner at Label Solutions Inc., said, “The WBE certification helped Label Solutions establish even stronger relations with our corporate clients and it allowed us to identify additional vertical market sector growth to help diversify our overall business model. We have both the WBE and WOSB certifications complete, and we’ve already identified new revenue potential from both our new WBE network customer base and with newly identified government agencies. For example, if we have one of our gas customers (Supplier or Distributor) approach us to be a subcontractor for their primary contract bid for a local university or military base project, we can qualify as long as the bid specs match our production capabilities. All in which helps the primary contractor further qualify for the project under our WOSB certification.”
Qualifying to become a WBE/WOSB business from an executive approach, it makes sense to consider converting to both WBE/WOSB status as an option for aging gas distributor owners that have daughters, female relatives, and/or women business partners that are qualified and are willing to handle 51% ownership responsibilities. It may take a little longer to complete the certifications than what you initially thought, but it will most likely be one of the best proactive groups to network with for years to come. Especially once we are all back to 100% of doing business and traveling again.
For more information about our WBE/WOSB program or this article, contact Kailyn Brown toll-free at 800-299-9200 or write to email@example.com. Kailyn is our new WBE Diversity Specialist at Label Solutions.
About the author
Rob Freeman is the Vice-President of Revenue Operations at Label Solutions, Inc. He specializes in helping companies accelerate sales, monetize brand strategies, and improve customer loyalty. Missouri-based Label Solutions is a WBE (Women’s Business Enterprise) Certified commercial label converter that produces durable pressure-sensitive product labels for some of the top industrial manufacturers and retail brands in North America.