B Corporations: Everything You Need to Know

4 min read • Mar 11, 2021 • Mary Kate Miller

As businesses look toward solving 21st century problems, many have made their purpose and mission an integral part of the business structure. You may have even seen some of them talk about their B Corporation status. But what, exactly, is a B Corporation, and how could certification help your small business?

What Is a B Corporation?

A B Corporation is a certified business distinction that recognizes a business’s balance between profit and purpose. B Corporation status is a standardized marker that lets your customers see a business’s dedication to mission-driven work. A certified B Corporation is also  “legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and environment.” 

Who Certifies B Corporations?

B Lab, a nonprofit, assesses B Corp applications and determines certification. 

The Benefits of Becoming a B Corporation

If your business sells itself as mission-driven, the benefits of acquiring B Corporation status are clear. B Corp certification is becoming the predominant standard in certifications for purpose-driven businesses. Similar to the way the Leaping Bunny logo immediately signals that a beauty company doesn’t test on animals, B Corp status is a way of saying, “We treat our people, our planet, and our community well, and you don’t have to just take our word for it.”

As more companies secure B Corp certification, the marker has gained traction and credibility. Companies like Ben & Jerry’s, Eileen Fisher, Allbirds, Stonyfield, and Klean Kanteen are all leaders in the mission-driven business space. They’re also all certified B Corps. When your business receives B Corp certification, it strengthens the value proposition of your mission-driven branding. It also puts you into the B Corp directory, giving you access to a customer base that’s specifically looking for companies that value purpose as much as they value profit. 

B Lab provides B Corps with a series of resources to support their growth and development. This community brings like-minded business owners together to help them develop, grow, and thrive. You can access events, programs, and discounts

Resources provided to B Corps include:

  • B Hive: An online community
  • B Local: An opportunity to form a collective of local B Corps in your region for collaborating, networking, and sharing best practices 
  • B Corp Leadership Development: Day-long conferences hosted by local communities
  • B Work: An impact jobs board to help you attract talent committed to your mission
  • B the Change: A publication where you have the opportunity to tell your story

On top of all that, you have the opportunity to participate in the Inclusive Economy Challenge. In short, if you run a business that’s dedicated to its impact, this community has a plethora of ways to help you grow your impact and your business at the same time. 

What Does B Corporation Certification Cost?

B Corporations pay an annual fee that starts at $1000 and scales with revenue. There is no fee to apply. 

The B Corporation Certification Process

To be certified as a B Corporation, your small business must first meet all the B Corp certification requirements. 

Time in Business

Your business needs to have at least 1 year of operating to be considered for B Corp status. This is because the certification body uses a 12-month period to evaluate an application. If your startup is less than a year old, you can still apply for Pending B Corp Status. After a year, you’ll be eligible for full B Corp Status. 

B Impact Assessment (BIA)

The first step in applying for B Corp certification is to complete the B Impact Assessment (BIA). The assessment is free and confidential to complete, and it will evaluate your business based on the following components:

  • The positive impact your business has on its workers, community, customers, and environment
  • The impact of your day-to-day operations
  • The impact of your business model

The assessment is around 200 questions. The specific questions you’ll be asked to answer depend on your business’s size, sector, and market. 

How the BIA Is Scored

You will receive a numeric score based on your answers in the BIA. You need a minimum score of 80 to receive a B Corp certification.

 

Disclaimer: The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice. All information, content, and materials available in this post are for general informational purposes only. Readers of this post should contact their attorney, business advisor, or tax advisor to obtain advice with respect to any particular matter.

Mary Kate Miller

Mary Kate Miller is a writer based in Chicago, IL. She specializes in covering finance (personal and business), investing, and real estate. Her mission in life is to give readers the confidence and the knowledge needed to grow their wealth by making financial topics more accessible. When she's not writing about topics like business loans, you can find her playing armchair financial advisor to the Real Housewives.