Guest post by KLA Intern Ana Kutcher
Three years ago, our CEO Kim Lundgren took a risk and started Kim Lundgren Associates. What started as a small project with one local government has now grown into a thriving business with an increasing client pool. We’ve come a long way!
Being a woman-led company in a widely male-dominated field isn’t always easy. Entrepreneurship has historically been a man’s game, but in the past few decades the US has made significant steps to help support traditionally underrepresented groups, like minorities and women like Kim, own successful small businesses. One of which is the Disadvantaged Business Enterprise certification program --- and KLA recently became certified.
Fast facts from the U.S. Census Bureau as reported by CNBC:
- Women launch an average of 849 new businesses per day
- There are 11.6 million women-owned companies across America
- Those companies employ nearly 9 million people and generate more than $1.7 trillion in revenue
What is DBE and How Does It Help Your Company?
So what is a Disadvantaged Business Enterprise, and how does a DBE certification benefit a company and a community?
Here’s a quick history of DBE courtesy of the National Law Review: “DBE was initially a federal program designed to ensure that funds allocated for...highway construction projects were used to foster equal competition amongst firms in a nondiscriminatory manner. However, in recent years DBE’s use has been expanded by other governmental entities.”
The US Department of Transportation defines DBEs as a “for-profit small business where socially and economically disadvantaged individuals own at least a 51% interest and also control management and daily business operations.” Disadvantaged groups such as African Americans, Hispanics, and women fall under this category, and the DBE certification provides their businesses with equitable opportunities to compete for federally-funded contracts. This is a chance to level the playing field that has been unfairly balanced for decades.
What’s even better is that the DBE certification isn’t the only opportunity to get support as a women-owned small business. Programs like the Women Owned Small Business (WOSB) certification and the Women’s Business Enterprise (WBE) are also built to help companies like KLA meet their business development goals. In 2015, $17.8 billion of all federal funding contracts eligible for small businesses were awarded to WOSBs. That’s a significant feat and step in the right direction -- though it’s still just 5% of all contracting dollars (a goal established by the federal government more than 20 years ago), so we have a ways to go.
For African Americans, Hispanics and Native Americans, in addition to DBE there is also a Minority Business Enterprise or MBE certification.
Why DBE is a Huge Opportunity for Community Equity
For local governments, DBEs (and similar certifications) represent a huge opportunity to walk the equity talk. Governments at all levels have either mandated specific DBE procurement requirements or have promised to infuse planning and other processes with equity. If you want to reach out to and include more minorities as you craft a vision for the community’s future, an easy way to start is by having city staff, consultants and contractors reflect the community’s diversity. Many localities, companies banks also offer specific programs and support for DBEs including competitive grants, loans for entrepreneurs and trainings.
Even though most localities have some DBE mandates, it is often focused on work that has traditionally been male-dominated (note the roots in highway construction). One way to make the process even more effective is to mirror those requirements in sectors -- like planning and communication -- in which women have emerged as leaders.
Once requirements are set, enforcement is crucial. New Orleans recently commissioned a study of the city’s DBE program amid accusations it was not working as intended. The results showed progress for minority- and woman-owned businesses in securing government contracts but struggles competing for private sector work. This type of review and accountability is critical to ensure that these certifications are used as intended and that equity goals are being pursued.
The US needs more companies led by historically marginalized groups and more work allocated to them. Promoting equity in the business world and in every community is a challenge, but certifications like DBE are designed to get us there.
We encourage other businesses to pursue DBE certification if you're eligible, and we hope that local governments recognize the tremendous potential from an inclusion and equity standpoint that robust, enforced DBE procurement practices offer.