Federal Support for Women-Owned Small Businesses
Survey reveals 99% of women-owned businesses are dissatisfied with current federal support, highlighting an urgent need for systemic reforms.
Current Challenges and Disparities
Women-owned small businesses in the United States express significant dissatisfaction with federal support, according to a recent survey by Goldman Sachs' 10,000 Small Businesses Voices program. The survey, involving nearly 900 women entrepreneurs across 47 states and Puerto Rico, reveals a staggering 99% of respondents believe the federal government needs to enhance its support for their enterprises. This sentiment is underscored by the 89% of these business owners who feel they do not compete on an equal footing with male-owned businesses, and 72% who would rate the government's support programs at a 'C' level or lower.
Certification Hurdles
A central issue highlighted is the arduous process of obtaining certification as a women-owned small business through the Small Business Administration (SBA). This certification is crucial as it opens doors to compete for federal contracts in sectors where women are traditionally underrepresented. However, only 36% of the surveyed businesses are certified, with many citing the process as overly complex and not worth the potential benefits. Indeed, the SBA has met its goal of assigning 5% of federal contracts to women-owned businesses only twice in the past three decades.
Systemic Issues and Inefficiencies
The system itself is riddled with inefficiencies and challenges, from delayed program implementations to a lack of compliance with regulations by federal contracting officers. An audit revealed that approximately 3.5% of contracts meant for women-owned businesses were awarded to ineligible companies, indicating issues with fraud control. Moreover, the system’s design makes it particularly cumbersome for smaller enterprises, as noted by entrepreneurs like Shaniece Bennett and Kate Isler, who attest to the significant burden of the certification process, often outweighing the potential benefits.
Recommendations for Improvement
Several potential reforms could better support women-owned businesses:
Streamlining Certification: Simplifying the certification process could make it more accessible and less burdensome for small businesses.
Adjusting Contract Requirements: Unbundling contract requirements to allow smaller, specialized businesses to compete could foster greater diversity and equity in federal contracting.
Technology and Process Modernization: The SBA acknowledges the need for ongoing technology improvements to enhance customer experiences, suggesting that modernization is key to improving support services.
Legislative Actions and the Path Forward
The reauthorization of the SBA, which has not occurred since 2000, presents a significant opportunity to update and refine programs and goals to better meet the needs of today’s small business owners. This reauthorization could address systemic issues and align the agency’s capabilities with the current economic landscape, particularly for women entrepreneurs.
Given the bipartisan support for improving small business support, there is potential legislative momentum for these changes. However, the challenge remains to prioritize these reforms amidst other pressing national issues. Advocates like Janetta King stress the importance of this legislative action to address the evident gaps and ensure the federal government more effectively supports women-owned businesses.
In a recent podcast interview, Robert F. Kennedy discussed with Lloyd Chapman, President of the American Small Business League, the pressing issue of gender-based discrimination in government contracting. Kennedy pledged that, if elected, he would enforce policies to significantly boost the share of federal contracts awarded to women-owned small businesses from the current 5% to at least 25%. This increase could potentially channel $100 to $200 billion annually from federal infrastructure spending to these businesses, potentially creating millions of jobs. Such a shift would not only provide substantial financial resources to women-led firms but also enhance their influence in political spheres, potentially increasing the number of women in Congress and even the presidency.
Conclusion
The profound disconnect between women-owned small businesses and the federal support mechanisms designed to assist them highlights a critical need for systemic reform. By addressing certification barriers, refining contract requirements, and modernizing administrative processes, there is potential to significantly enhance the entrepreneurial environment for women, contributing to a more equitable and dynamic economic landscape.
