Small Business Certifications: Where Do I Start?

For many small, privately held businesses, navigating the world of small business certifications can be a daunting task.  Certification options abound for women, minority, veteran-owned, and small disadvantaged businesses.  What does it all mean, and where does one start?

The website of the U.S. Sm
all Business Administration (SBA) explains it well: “Small business certifications are like professional certifications; they document a special capability or status that will help you compete in the marketplace.”  Here, I address women-owned business certifications, a topic on which our office receives frequent inquiries.

Women-owned businesses may seek certification through both governmental and private entities, and while certification requirements vary, both generally require that one or more women own at least 51 percent of the business and manage the business.  In other words, a woman holding a 51 percent or greater ownership interest in a company in which her husband is CEO isn’t going to cut it.  She must be responsible for both the long-term decision making and day-to-day management of the company.  

Typically, a business primarily focused on serving as a supplier to governmental entities will want to become certified by a governmental agency, whereas a business that primarily works in the private sector and with large, publicly traded companies should seek certification from a third-party certifier.  For Minnesota businesses, governmental certifiers include (i) the SBA, (ii) the State of Minnesota, and (iii) the City of St. Paul.  Third-party certifiers include the Women’s Business Enterprise National Council (WBENC) and the National Women Business Owners Corporation (NWBOC).  

The SBA administers the Women-Owned Small Business Federal Contract Program, which authorizes federal contracting officers to set aside certain federal contracts for eligible women-owned small businesses.  

The State of Minnesota and its agencies administer the Targeted Group/Economically Disadvantaged Small Business Program (the TG Program) and the United States Department of Transportation Disadvantaged Business Enterprise Program (the DBE Program).  Upon certification under the TG Program, the business is added to the state’s vendor list, and the TG may be eligible for up to a 6 percent preference in selling its products or services or bidding on construction projects to the State.  The DBE Program is a federally-funded certification program intended to help disadvantaged people, including women, participate in the planning, construction and management of the country’s transportation system.  The Minnesota Unified Certification Program (MnUCP) makes certification decisions with respect to participation in the DBE Program.
   
The Central Certification Program (CERT) is a small business certification program administered by the City of St. Paul and recognized by Hennepin County, Ramsey County, and the City of St. Paul.  Certification makes you eligible to participate in activities specifically designed for certified vendors.    

Two of the most prominent third-party certifiers are the WBENC and NWBOC.  Each certification provides women-owned businesses with access to supplier diversity and procurement executives at major corporations and federal, state and local government entities.  The application fees for these certifications start at $350, and certifications are usually valid for just one year.  

This is merely a high-level overview of the reasons companies may seek certification and the types of certifications available to Minnesota companies.  As you consider whether certification may be right for you, keep in mind that the process is lengthy and rigorous.  Numerous document requests must be fulfilled and on-site visits may be required.  Recertification may also be required on an annual basis, but the numerous benefits that accompany certification may make it all worthwhile.

What Would Brandeis Think?

In 1890, Louis Brandeis and Samuel Warren wrote their seminal Harvard Law Review article “The Right To Privacy,” suggesting that government and the media had gone way too far in invading the privacy rights of individuals and arguing that legal remedies were necessary to combat the then-intrusive technology known as “photography.”

What would Brandeis think about Snowden, the Internet, Google Glass® and drones?

I am not sure what his views would be on new technology or government surveillance, but I do believe that Brandeis would have enjoyed A Legal Guide to Privacy and Data Security, a Minnesota CLE class presented this past Monday, and that he would have found the presentations and discussions intriguing.  

The CLE, attended by over 150 lawyers, covered issues from the origins of privacy rights to issues of data breach and security. Topics also included big data as well as key federal, state, and global privacy laws and regulations. The Privacy Guidebook prepared by Gray Plant Mooty was used as the written material for this CLE. 

In setting the stage for the day, I invoked Brandeis as an early champion of privacy rights, as evidenced by both his law review article and his dissent as a Supreme Court Justice in Olmstead v. United States (1928). In Olmstead, the Supreme Court found that wiretapping the phones of a bootlegger was not a violation of the Fourth Amendment. There was no trespass since the phone lines were tapped from outside the bootlegger’s home. Brandeis disagreed, stating that it should make no difference where the physical connection with the telephone wires was made. According to Brandeis, the Constitution “conferred, as against the Government, the right to be let alone—the most comprehensive of rights and the right most valued by civilized men.”

Brandeis became a champion of the right to privacy during his tenure as a member of the Supreme Court from 1916 to 1936.  Jurists have continued to expand upon his early views on privacy and still look to his Olmstead dissent and his law review article as support for further legal protection of privacy. 

While you may have missed your opportunity to attend a live presentation of this CLE, there will be two video replays in Minneapolis—September 4 and September 23—with others scheduled at later dates in Duluth, Mankato, St. Cloud, Marshall, and Moorhead.  Click here to view the CLE brochure and information on the video replays.

Someone Finally Did Things Right! Lessons from Robin Williams’s Estate Plan

Last week we tragically lost an entertainer who played a major role in my life, and, I am sure, in the lives of many others as well. Most of the time when I write about celebrities and their estate plans it is to point out something they may have done wrong, but today I am pleased to report that I am able to discuss one celebrity who may have done things right.  Early reports, citing TMZ (seriously, where do they dig this stuff up and how ridiculous is it that I am citing it?), indicate that Robin Williams may have used a revocable trust as his primary vehicle to transfer his assets at death. 

There are a number of reasons a revocable trust may be the perfect estate planning tool, but primary among them is privacy: a revocable trust is a private document that normally will be unavailable to the public, an important consideration for a public figure. In contrast, consider the cases of Phillip Seymour Hoffman and James Gandolfini, among others, whose wills and dispositions from their large estates were on public display.  A will is a public document, filed with the court in a probate proceeding, and as such is available to the public; a trust is not automatically subject to probate or court jurisdiction.  If a client-say a celebrity, an athlete, or even a resident of a small town full of nosy neighbors—ever has a need for privacy, the revocable trust is the preferred instrument.

A revocable trust can also reduce (but not eliminate) the possibility of intra-family drama surrounding the estate plan.  A revocable trust avoids a probate proceeding, without which no notice to family members and heirs is necessary.  Only the named beneficiaries need to get notice of the distribution from a trust, unlike in probate where all defined heirs, along with named beneficiaries, are required to receive notice.  This means that a child or someone else who intentionally may have been excluded as a beneficiary will receive notice and will be an interested party in a court-supervised probate proceeding.  It is still possible to bring action to determine the validity of a trust, or to contest distributions from a trust, but a party who might wish to press such claims may never even receive notice that the trust exists.

Just because Robin Williams appeared to use a revocable trust instead of a will as his primary estate planning vehicle doesn’t mean his estate plan was perfect, but it does mean he was able to ensure that the division of his assets will remain private.

One caveat: revocable trusts are only helpful if you have actually transferred your assets to the trust.  In many jurisdictions if you have more than $50,000 or $100,000 in assets titled in your own name, and not in the name a trust or a designated beneficiary or in common ownership with another person, a probate proceeding will be necessary even if a revocable trust exists.

What: T. J. Stiles, The First Tycoon: The Epic Life of Cornelius Vanderbilt (Alfred A. Knopf, 2009)

Why:  How one man, starting with little but his ambition, built a transportation empire and shaped the infrastructure of the American economy in the process.

It is not unheard of for entrepreneurs with whom members of our Entrepreneurial Services Group work bemoan how they are hampered by legal regulation at almost every turn. How much more they could achieve if only the government would keep its nose out!

So what was it like in the good old days? Enter T. J. Stiles, whose biography of Cornelius Vanderbilt quite justifiably won the National Book Award for nonfiction in 2009 and the Pulitzer Prize for Biography in 2010. In the interests of full disclosure, I note that I take a certain vicarious pleasure in these achievements, as both Mr. Stiles and I were history majors at the same small Midwestern liberal arts college, he being of somewhat newer vintage than me.

Stiles gives us a front row seat to the development of an economic empire that began with a ferry plying its trade between Staten Island and Manhattan and ended—many, many millions of dollars later—with a near-monopoly in the railroad industry. All mostly accomplished by Vanderbilt’s drive to run any business in which he was involved better than any of his competitors.

Along the way, we witness the growth of the stock market, the transformation of the corporation from a vehicle for public works to an engine of private business, and the boom in transportation that drove American economic growth in the 19th century. Vanderbilt was a part of it all, and himself played a crucial role in the transformation of the United States from an agrarian-based society to an industrial giant.

In all of this, the law lagged behind the growth, but the growth clearly drove the law. Vanderbilt himself resorted to the courts only rarely, preferring to use his economic power to punish rivals. Vanderbilt’s obituary quotes a letter he purportedly sent to partners who had double-crossed him. The letter actually never existed, but perfectly captures Vanderbilt’s attitude: "Gentlemen: You have undertaken to cheat me. I won't sue, for the law is too slow. I'll ruin you. Yours truly, Cornelius Vanderbilt."

Perhaps Vanderbilt’s life is best summarized by this dust-cover blurb: “He was a visionary who pioneered business models. He was an unschooled fist fighter who came to command the respect of New York’s social elite.” This is an excellent read, an inspiration for any entrepreneur, but at some 585 pages not for those adverse to commitment or faint of heart.

Musings About the Minnesota Fringe Festival

This past weekend I was able to take in a couple of shows that are part of the Minnesota Fringe Festival. For those (like the couple who attended with me) who are Fringe “virgins,” the Minnesota Fringe Festival, one of many such festivals in the US, is the largest “nonjuried”  festival (meaning shows are selected by lottery) and reportedly the third largest fringe festival of any sort in the nation. This shouldn’t come as a surprise if you already knew that Minneapolis is second only to NYC in live theatre per capita.

The Fringe Festival is a collection of shows performed at a host of venues over 11 days (this year, 169 shows and 19 venues from July 31 through August 10). Each show is 60 minutes or less and they are conveniently scheduled to permit seeing more than one show on a given day or evening. While the content of shows is wide-ranging (comedy, drama, dance, youth, opera, etc.), frequent readers (and others who know me) won’t be shocked to learn that both shows I attended were musicals.

It was a typical Fringe experience. One of the shows, Top Gun: The Musical, was basically a one-joke parody—light on substance and a cast not up to the task. The other, Pretty People Suck (And Other Undisputable Facts About The Universe), was as good as anything I’ve ever seen at the Fringe. Clever songwriting, excellent acting—something that, with a little work, could have a future life.

One of the things that struck me about the shows was just how many creative and (sometimes) talented people work tirelessly to bring these works to the stage. Given the economics, they aren’t doing it for the money (although a few shows, including one of my favorites of the last decade, sometimes graduate from festivals like this to commercial productions). 

Just like someone else I know really well, they probably do this because of the challenge of the creative process and the reward of seeing something you create come to life. I suppose it isn’t all that different from the rush that entrepreneurs get from creating a successful business out of nothing more than an idea—but without all the equity return.

The Fringe runs through Sunday, so you still have a chance to take in a performance!

What: Peter Cohen, The Gospel According to the Harvard Business School: The Education of America’s Managerial Elite (Penguin Books, 1973)

Why: For those of you who want a dose of pure 1970 angst, here you go.  If you are genuinely interested in what it’s like to study for an MBA, there have got to be better choices than this. 

Every once in a while, if for no other reason than to placate my co-editor, I actually pick up and read a book that is directly on topic—something, say, with the word “business” in the title. A few days ago, while rooting around in boxes long ago consigned to the attic and until recently forgotten, I came across this book, which I had apparently read as a law student.  Perfect!

Except that it wasn’t. Oh sure, there is some engaging discussion here about decision-trees and other stuff B-school types learn in the ordinary course. But perhaps the most profound insight Cohen has to offer is to conclude, with respect to one case study, that the problem presented was “a bag of worms that’s intertwined.” Did he really have to earn an MBA to produce such piercing insights?

I have to admit, though, that the historian in me did find the cultural subtext of the book somewhat interesting. Cohen attended B-school during the dark days of 1970, and student protests, the first Earth Day and the Kent State incident feature prominently.

As a memoir of those times, the book does have some redeeming value. Taken out of its historical context? Not so much. This is not a book that has aged gracefully. I came of age during this period, but I was genuinely shocked by certain assumptions and stereotypes of that period, particularly regarding women in the business world. Here’s one guy, describing a coworker: “She was a young girl in her early forties.” Girl? Forties?  Really?  

I guess this only goes to show that, as a society, we have come some distance since those late Mad Men days.