Women-owned business enterprises (WBEs) are a powerful force not just in the supplier diversity space, but also throughout the American economy. At CVM Solutions, we wanted to learn more about what is driving WBEs in 2017—what makes them tick, what challenges they face, and what they expect in the future. So, we came up with a novel idea to find out this information: We asked them.
Earlier this year, we surveyed 277 diverse suppliers, almost half of whom were WBEs. We accumulated an impressive amount of data, pored through the results, and compiled our findings in our comprehensive 2017 State of Supplier Diversity Report—Diverse Suppliers.
The answers women-owned businesses provided for our survey were fantastic, enlightening, and definitely important in assessing the state of supplier diversity and WBEs’ successes and challenges amid today’s economic landscape. Here are some of the highlights from our findings:
1. 90 percent of responding WBEs are certified as such.
Of the 133 survey respondents that identified themselves as a women-owned business enterprise, 90 percent are certified as such by the Women’s Business Enterprise National Council (WBENC) or another agency. These results followed the trend by other categories of diverse suppliers, which also said they were officially designated by their respective certification agencies. The finding is interesting because generally, the majority of WBEs nationwide are not certified. The disparity between that fact and our survey data suggests that WBEs who are active in the supplier diversity community (and, thus, were more eager to participate in our survey) already know that certification opens doors for them that might have otherwise been mostly closed—yet another argument on why being certified is so important.
2. WBE respondents were overwhelmingly SMBs.
Only one of the WBEs that answered our survey employs more than 500 workers. Moreover, about 88 percent of respondents are classified (though not necessarily certified) as small businesses with fewer than 100 employees, and 41 percent have fewer than 10 employees. These numbers were statistically similar to minority-owned business enterprises’ numbers, but MBEs—for whom we got almost the same number of responses as WBEs—featured 10 more respondents of more than 501 employees. The results possibly suggest that women-owned businesses, which tend to be a bit more white-collar, are more likely to be mid-sized (yet still thrive) compared with other diverse supplier categories.
3. WBE respondents were the most established.
WBEs in our survey enjoyed the highest rate of diverse businesses operating for four years or more, at 85 percent. Although the numbers for other diverse supplier categories weren’t significantly less (ranging from 76-81 percent), the high mark shows that businesses owned by women are among the most stable and successful among all diverse suppliers.
4. WBE respondents do their fair share of business with Fortune 1000 companies.
Of our 133 WBE respondents, 106 report doing business with Fortune 1000 companies. Of those 106, just 15 report that at least 75 percent of their business is with this top tier of clients. Despite the overall success WBEs have found, there is still room for progress, further hinting at the importance of certification, networking, and advocacy.
5. But they are less likely to pursue government contracts.
Just 52 percent of WBE respondents say they pursue government contracts, below the overall survey result of 59 percent, and significantly less than the 66 percent result of MBEs and 92 percent for veteran-owned businesses (the latter of which had a small sample size). Does this finding suggest the products/services WBEs offer generally aren’t a good fit for government contracts, or possibly that WBEs are generally overlooked for these contracts and, therefore, are less actively trying to secure them?
6. WBEs find clients the same ways other diverse suppliers do.
Our survey asked diverse suppliers how they found companies to partner with, and respondents could give more than one answer. Networking events led the way, with 66 percent of respondents citing it as a way they find partners, followed by registration sites at 51 percent, and RFPs at 46 percent. When we looked at the data for WBEs compared to all other diverse suppliers, the numbers generally followed the overall results, with two notable exceptions: women-owned businesses are less likely to email (35 percent, as opposed to 43 percent) and use cold calls (25 percent versus 31 percent) than non-WBEs.
7. Others’ supplier diversity efforts factor heavily on WBEs’ decisions.
We asked this unique question: “As a consumer, does an organization with a supplier diversity program influence whether or not you will buy from them?” Forty-eight percent of all respondents reported they were strongly influenced, and another 36 percent said they were slightly influenced. Interestingly, our WBE respondents were even more confident with their responses, with 89 percent at least slightly influenced. Supplier diversity isn’t just a means to achieve success for women-owned businesses—it’s an important philosophy that guides their decisions.
These findings are only a sampling of what we learned in this report and its companion survey, 2017 State of Supplier Diversity Report—Supplier Diversity Programs. Both reports can be downloaded together, and if you want to participate in next year’s survey, drop us a line.
If your a woman owned business then check out out definitive guide for more information.