Getting Certified: Women- and minority-owned businesses
author Claire Swedberg
Changes in public sector and commercial job requirements are making it increasingly beneficial for construction-based women or minority businesses, which is, basically, any business where 51 percent of the ownership is in the hands of a minority, disabled or female business person. The percentage of women- or minority-owned businesses—contractors or suppliers—ranges typically from 5 to 20 percent.
Most local and state public projects come with some kind of minority-contracting requirements. As a result, the need for minority contractors is growing, perhaps faster than the businesses are growing. In fact, some contractors find it hard to find qualified women- or minority-owned businesses in the area when they need them.
Women and minorities have plenty of presence in the business world but not nearly as much in construction. Women own 47 percent of businesses in the United States, according to the National Association of Women Business Owners (NAWBO), but that statistic plummets when you enter traditionally male industries. The nature of the electrical industry, which has many family-owned businesses, has typically resulted in the companies being passed on to male children.
The industry is gradually changing. Construction is one of the three industries with the greatest growth in women-owned businesses, along with agriculture and manufacturing. More women are going into the electrical trade. There are more female electricians than there were 10 years ago, although, specific figures documenting that growth are hard to come by. Contracting firms that used to pass the business onto sons are increasingly passing the company onto daughters.
When looking at the minority-owned businesses, you find, in total, there are 4.1 million in the United States, though that doesn’t translate to the number in the electrical trade. Nationwide, electrical minority businesses are even less common than electrical women-owned businesses.
However, the number of minority-owned businesses is increasing in some areas. The growth of African-American-owned businesses is outpacing non-minority growth, according to the Minority Business Development Agency (MBDA). And while those who are in the business enjoy some advantage in the case of government minority requirements, none of those interviewed for this story felt the government and other end-user requirements could make or break their business.
“There are concerns for those in the construction industry whether male or female or minority,” said Erin Fuller, NAWBO executive director, adding that the concerns include accessing capital, second- to third-round financing, and cash flow as well as meeting payroll demands.
According to Fuller, about 4 percent of large corporate contracting opportunities go to women-owned businesses. In 1996, Congress passed a law requiring 5 percent of federal contracting go to women-owned businesses. So far, that figure is running at about 3 percent, she said.
“That’s not exactly a piece of the pie; it’s a crumb. I don’t think there’s an effort to exclude,” Fuller said, adding most new businesses have to make an effort to become part of the structure. “[However,] a lot of barriers have diminished and some of the incentives for state and local government set up a strong business case for a woman to put her money into the construction industry.
“The industry itself is so cyclical, so directly impacted by the economy, there is very little buffer,” she said. “In general, contracting, whether electrical or anything else, is a tough industry. For women, you certainly would have to be thick-skinned, but that applies to business owners in general.”
Do women have to work twice as hard as men to gain respect? Fuller doesn’t think so.
“I think that’s crap,” she said. “They have to build networks, to be aggressively extroverted in courting business. Business development is the key strategy.” That is true for minorities, women and all new business owners, she added.