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  • Writer's pictureSusie Mehring

Why Work with a Woman-Owned Business?

Updated: Jun 17

why work with a woman-owned business

Collaborating with a woman-owned business offers numerous advantages. While there was once a perception that engaging with diverse suppliers was merely an act of charity, businesses now recognize the substantial value it can bring to their bottom line. Leading companies like Walmart, Accenture, and Johnson & Johnson are among those embracing procurement’s best-kept secret: Supplier Diversity.

How does Supplier Diversity provide a competitive advantage?

Supplier Diversity becomes a competitive advantage by allowing a company to:

  1. Tap into a more creative, innovative, and agile supplier base. The majority of minority-owned businesses are small to medium-sized. That means those businesses have to be more flexible, continuously finding creative ways to pivot and distinguish themselves from their larger competitors. If a business continues to use their traditional supplier list, they risk missing out on the depth and breadth of innovation that naturally occurs when having a more diverse supply base.

  2. Experience true collaboration. One way that minority-owned businesses stand out from their larger counterparts is by offering exceptional customer service. The small diverse supplier offers an opportunity to develop truly collaborative relationships, further allowing a business to capitalize on the supplier’s creativity and help shape it as the customer/supplier relationship grows.

  3. Reduce direct and indirect spend. Building a large database of suppliers from which to source, allows a buyer to analyze the prices, locations, service levels, deliverable dates, and range of goods and to choose those that work best for them. Because suppliers are looking to give the best deal they can to win the business, a buyer can promote competition and thereby reduces their direct and indirect spend.

  4. Tax advantages. The federal government allows tax breaks for companies who partner with minority and women-owned businesses. They also provide a tax incentive that reduces tax liabilities for firms that use diverse suppliers for labor or services for a project funded by federal or state grants/loans. Eligibility for such tax incentives leaves a company with more capital to improve their business.

  5. Build a reputation of stewardship and inclusion. Supporting woman-owned businesses contributes to greater diversity and inclusion in the business world. This helps create a more varied and representative business landscape.

  6. Expand their network. Companies implementing supplier diversity programs are more likely to penetrate new markets and thereby, gain new customers. As the buyer reaches out to more and more suppliers, they can become privy to a supplier’s networks and alliances, opening the door to a volume of fresh business opportunities.

  7. Promote Corporate Social Responsibility (CSR). Many companies prioritize CSR initiatives, and supporting woman-owned businesses aligns with efforts to promote social responsibility and equality.

  8. Become eligible for certain government contracts and programs. In some regions, there are government programs and initiatives that encourage the inclusion of women-owned businesses in procurement processes. Working with such businesses may enhance your eligibility for certain contracts or programs.

The ROI on Supplier Diversity

A Hackett Group study found that companies that participate in a long-term supplier diversity program:

  • Generate a 133% greater ROI than companies that rely upon traditional vendors

  • Add $3.6M to their bottom line for every $1M they spend in procurement costs

  • Have lower overall operating costs and spend 20% less on their buying operations, all while employing half the procurement staff

In Summary

Working with a woman-owned business can be advantageous for various reasons. Supporting diversity and inclusion is a key benefit, as it contributes to a more equitable business landscape. Women-owned businesses often bring unique perspectives and innovative solutions to the table, fostering creativity and resilience. Additionally, research suggests that diverse teams, including those led by women, tend to outperform homogeneous ones, leading to better business outcomes. Collaborating with a woman-owned business not only aligns with principles of social responsibility but also promotes economic empowerment, as it encourages the growth and success of enterprises owned and operated by women. Overall, choosing to work with a woman-owned business can positively impact both the business community and society at large.

To learn more about the advantages of working with a woman-owned business, contact us at

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