Supplier diversity: Why women-owned businesses have a unique advantage in the U.S.

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Wednesday October 29, 2014

Women executivesFor small women-owned companies in Canada, doing business in the U.S. — especially with Fortune 500 companies — may seem like a pipe dream.

But women here have a little-known advantage when it comes to doing business in the U.S. — and that advantage extends to doing business with those seemingly unattainable large, multinational corporations.

Supplier diversity

It’s part of a larger initiative called supplier diversity, a concept designed to build relationships with groups considered underutilized within their procurement areas, according to Mary Anderson, president of WBE Canada, a certification counsel that aims to educate more women about the opportunities available to them through certification in supplier diversity programs.

These programs are nothing new in the U.S. — in fact, they’ve been around for more than 40 years and target a number of underutilized groups from minorities to veterans.

“But the concept is new to Canada and new to Canadian businesses,” said Anderson. WBE Canada certifies majority-owned, managed and controlled women’s businesses, and then facilitates opportunities for them to meet potential buyers and get access to bids for corporate contracts.

“You’d be surprised at the receptivity of these organizations that you may not have even considered, like hotels in Las Vegas,” she said. “They are wide open to women businesses and quite eager to have them. We’ve had women businesses selling products to their gift stores.”

Others open to women-owned business enterprises (WBEs) include those in the automotive supply chain, agri-business and retail (like Wal-Mart and Target).

Many of these organizations have strict requirements around diversity, “so there is a lot of expectation that tier-one suppliers will open their doors to opportunities,” said Anderson.

General Motors, for example, must meet a supplier diversity goal of eight per cent of total U.S. and Canada global spend, meaning the company is actively seeking qualified WBEs through various partnership initiatives.

“There are other organizations interested in diversifying their supply chain that haven’t made these rigid requirements but are great to work with — and some are retailers in the U.S. that will expect the certification that we provide,” said Anderson.

Selling to the U.S. government

Any company that wants to sell to the U.S. federal government needs to be an active exporter to the U.S., said Judy Bradt, CEO of Summit Insight. “Trade agreements don’t require it, but U.S. government buyers are some of the most risk-averse on earth. If you’re unknown, you represent a great big ball of risk.”

Certification could open doors to conversations with large companies that are prime suppliers to the U.S. federal government (the Women’s Business Enterprise National Council, or WBENC, in the U.S. has more than 300 members and about 70 per cent of those are prime contractors with the feds).

“What they’re looking for is capable suppliers,” said Bradt. “Being part of an organization gives you an opportunity to walk through the door, but you still have to have something to say and something to bring to the table.”

Accreditation as a WBE

So what are the criteria for accreditation? The business must be at least 51 per cent owned, managed and controlled by one or more women. The process of certification requires the submission of documents of ownership, as well as an on-site assessment. In addition to certification, WBE Canada provides mentoring, training, tools, best practices and in-depth programs.

If you’re doing business in the U.S., it’s worthwhile to find out if your U.S. clients have a supplier diversity program, said Anderson. (It’s easy enough to do: Look on their website or Google it.) It’s also valuable to register on their site when you get certified.

“Some sites don’t have a way to register a Canadian entity, so we go in and help with that,” said Anderson. “There are some, quite frankly, that are only looking for U.S. providers, but this is a way to investigate (the market), so it’s an untapped idea of business development and a way to start.”

WBE Canada has about 250 certified suppliers in Canada and 23 organizations that support it, some of which have North American supply chains (such as BlackBerry and BMO). From that perspective, it can be a bit easier to get an “in,” she said. “Those are great starting points in the journey.”

In Canada, the accreditation is gaining visibility, particularly among U.S. organizations that have operations in Canada, though WBE Canada has been heavily promoting the Canadian certification in the U.S. through trade shows and other events.

One of the ways WBE Canada gets women in front of potential U.S. suppliers is through matchmaker events and “reverse trade shows,” where registered diverse suppliers can introduce themselves to suppliers, make connections and start conversations. Once a connection is made, WBEs can then bid on contracts based on their own merit.

“The value for women is it opens the door to the people you want to introduce your products and services to,” said Anderson. “And it’s a way to create credibility with U.S. suppliers.”

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Expand in the USA conference

Registration opens in November, 2014 for the two-day conference, Expand in the USA, being held at The International Centre, in Mississauga, Ontario. The conference will be focusing on strategic planning and financing for small and medium size Canadian companies looking to achieve significant growth south of the border. See the agenda at: www.expandintheusa.com/agenda.