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You may have asked yourself if your business qualifies for 8(a) certification. You may not know what the basic parameters are. Or you are just curious what 8(a) certification. Whether you’re on the cusp of making an important move for your organization, or this is the first time you’ve even heard of the designation, you should be equipped with a good understanding. Read on. First, are you a minority owned business? Let’s see.
The 8(a) ‘Business Development Program‘ helps small, disadvantaged businesses compete in the marketplace. The purpose behind the program is to offer a useful tool and assistance with businesses. But this help is only available to those that have traditionally been at a disadvantage in the American marketplace. What is the purpose? According to https://www.sba.gov/content/about-8a-business-development-program, where the SBA (Small Business Administration) goes into some finer details about this often-obscure government program, the point is to help “socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. The program helps thousands of aspiring entrepreneurs gain a foothold in government contracting.”
Sound good! But is it a little vague? The benefits of becoming 8(a) certified are actually rather interesting. Here are just a few of them…
You have the ability to win sole source government contracts without a bid or competition is gigantic. These are often large. This is one reason that a disproportionately large percentage of the fastest growing businesses in the United States are 8(a) certified in recent year. 8(a) firms are selected first and have less competition to deal with when finding government contracts.
In 2011, an average of $3,000,000 was spent per 8(a) certified firm! It’s easier for federal clients to purchase your product. This is because 8(a) contracts cannot be protested. And they have less red tape overall. Less paperwork means less hassle for customers. And that means more money for you.
8(a) firms have the latitude to partner with large successful firms. They often benefit from their assistance in achieving contract goals. Of course, the mentor is incentivized too. They have access to certain federal government contracts after entering into a joint-venture arrangement with the protégé. Granted, the (business development) Mentor-Protégé program has it’s own caveats and nuances. But it’s an important boon that you may be able to utilize if you become 8(a) certified.
On average, 8(a) contracts are quicker to be awarded than contracts gained by other methods. This means you can get to work, earn money for your business, and enjoy that critical growth! The advantages are even greater than this short list. Though the basic premise is that you’ll get some preferential treatment when it comes to procuring government contract work. And all while cutting through red tape. But am I even eligible?
We’ve scratched the surface on why it’s both useful and financially advantageous to get certified. But discovering whether it’s worth it or even possible for you might be a more complicated story. Look at it from SBA’s perspective. They’re trying to benefit people who need the benefit based on actual societal disadvantages. For example; are you a United States citizen who is: Hispanic, Asian, Black, Native American? Or has your ethnic background experienced chronic discrimination based on gender, culture, race, veteran status, or disability? If you can prove it to the SBA then you just met one important criteria for getting certified. But it’s more than this. Because other factors are accounted for and have to be verified. Your wealth is another such factor. If your personal net wroth is over $250k, it’s likely you don’t have a shot at getting that coveted certification.
But let’s boil down the 3 main requirements to get a SBA 8(a) certification: First, you have own a small business by the SBA’s standards. (including those we already mentioned). Second, you need to be unconditionally owned or controlled by one or more disadvantaged individuals. (with a few caveats). That’s right. You can’t just employ individuals who qualify. You need to be one of these people. Finally, you need to show that your organization is potentially effective at garnering success. Basically, they want to see that what you’re doing is viable as a business. Therefor, they don’t throw good money after bad.
Learn more details about 8(a) certification status. And see how professional consulting firms like Business and Financial Solutions can help you. Give us a call today at 855-557-2222. And get linked up with the experts. We have offices in Frederick and Rockville MD and Vienna VA. However, we proudly serve clients in all 50 states.
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