Business Owners: How B Corporation Status Could Help to Strengthen Your Brand and Grow Your Business
James Zahansky, AWMA®
Principal/Managing Partner, Investment Advisor & Chief Goals Strategist
Business owners and investors alike may consider factors beyond profitability and an ROI when determining what’s important to their business. Similarly, consumers want to know that the companies that they’re buying from are considering more than just the bottom line. Consumers, investors and employees alike are gravitating toward companies that are considering their impact on the world at large and working to be a force for good. That’s where B Corporations come in.
What Is a B Corporation?
A B Corporation (B Corp) is a special designation provided by B Labs, a non-profit organization that certifies that an organization is operating at the highest standards of social and environmental purpose. Businesses who qualify for a B Corp designation have a great deal of public and legal transparency while demonstrating that they’re providing value to their employees, community and the environment.
The majority of businesses with B Corp designations are small- to medium-sized private companies; however, companies like Ben and Jerry’s and Patagonia have earned B Corp certifications for their commitment to larger goals as well.
Benefits of a B Corp Certification
There are several benefits to qualifying for a B Corp certification. You and your business will be held to social and environmental standards and are required to be completely transparent about your efforts in those areas. This transparency can attract customers who want to make sure that their consumerism lines up with their values.
Becoming a B Corp may also attract employees who are aligned with your company’s values. Because employee culture is a central tenet of a B Corp, you may be better equipped to hire and retain top talent in your field.
There are potential financial benefits to becoming a B Corp as well. As part of the B Corp community, you’ll have access to data that will allow your business to become sustainable in a cost-effective way. Becoming certified helps your business identify wasteful spending, making your company more solvent in the long run. If you want to see if your company could qualify to become a B Corporation, or wish to make modifications to your company to become a B Corp, it may be beneficial to consult a financial advisor.
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How to Obtain B Corporation Certification
The process to become certified as a B Corp is rigorous. It can take anywhere from six to 10 months for the evaluation process to be completed, and only one in 13 companies will end up qualifying for B Corp certification.1
The first step is to complete the free online B Impact Assessment (BIA). B Labs determines your business’s impact on its employees, the environment and the community to see if you qualify to become a B Corp. Once certified, B Corp businesses are required to make legal changes to their business, including updating their Articles of Incorporation to reflect the values. The legal requirements vary depending on the size of your business and your location.1
If you’ve met these initial requirements, you’ll then meet virtually with the B Labs staff to review your business and the BIA. Once certified, you must complete a BIA and verify your score with B Labs every three years to maintain your B Corp status.1
B Corporation Considerations
If your business is driven by both a mission and profit, you may want to consider applying for a B Corp certification. While businesses large and small have B Corp certifications, becoming a B Corp can help you stand out from the crowd by verifying that your company’s commitment to social values is more than just performative and that your business is committed to stakeholders as well as shareholders.
Just make sure you talk with your business team before moving forward on a B Corp certification, including your financial advisor, legal counsel, and tax professionals.
At Weiss, Hale & Zahansky Strategic Wealth Advisors, we help our business owner clients through all aspects of business finances, including working through the potential benefits and drawbacks of obtaining B Corp certification. If you’d like to learn more about exploring this option for your business as well as how our comprehensive Plan Well. Invest Well. Live Well.™ strategic process can help you reach your business and personal financial goals, contact us at (860) 928-2341 or schedule a complimentary consultation on our website.
Principal/Managing Partner James Zahansky, AWMA®. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. Weiss, Hale & Zahansky Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259, 860-928-2341. www.whzwealth.com.
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