April 13, 2023
Diversity and inclusion are essential values for businesses to uphold. Supplier diversity is an integral part of this commitment, where companies aim to source products and services from diverse businesses owned by minorities, women, and other underrepresented groups. But did you know that maximizing tax savings is another significant benefit of supplier diversity? In this blog post, we’ll discuss how buying from women-owned companies can help businesses save on taxes, as well as the other benefits of supplier diversity.
The Benefits of Buying from Women-Owned Companies
- Tax Savings: The federal government offers tax incentives to businesses that purchase goods and services from women-owned companies. The Women-Owned Small Business (WOSB) Federal Contracting Program provides federal contracting opportunities for women-owned small businesses in industries where they are underrepresented. By purchasing from these companies, businesses can take advantage of tax incentives, such as a tax credit for hiring and training employees and tax deductions for expenses related to supplier diversity programs.
- Increased Innovation: Studies have shown that diverse companies are more innovative and better able to solve complex problems. By purchasing from women-owned companies, businesses can tap into a diverse range of perspectives and ideas, which can lead to more innovative products and services.
- Improved Reputation: Companies that prioritize supplier diversity and work with women-owned businesses are viewed more positively by customers, employees, and investors. By aligning with values such as diversity and inclusion, businesses can improve their reputation and brand image.
“Working with Women-Owned company, RA United Enterprises, has not only helped us save on taxes but has also opened up new opportunities for innovation and growth. We’ve been able to tap into a diverse range of perspectives and ideas, which has resulted in more creative and successful deals.” – RAUE Customer, 2023
- According to the National Women’s Business Council, women-owned businesses account for 42% of all businesses in the United States.
- The Women-Owned Small Business (WOSB) Federal Contracting Program provides a set-aside program for WOSBs to compete for federal contracts in industries where women-owned small businesses are underrepresented.
- The Tax Cuts and Jobs Act of 2017 provides a tax credit for businesses that hire and train employees from targeted groups, including women-owned businesses.
- According to a study by McKinsey & Company, diverse companies are 33% more likely to outperform their peers in profitability.
In conclusion, maximizing tax savings is a strategic business decision, and supplier diversity is a key component of this strategy. By buying from women-owned companies, businesses can take advantage of tax incentives, tap into a diverse range of perspectives and ideas, and improve their reputation. As a result, they can save on taxes while promoting diversity and inclusion, which is a win-win situation for both parties.