SBAs 8(a) Program Can Help Some Companies Compete

Q: A friend told me that as a woman of Native American descent I might be eligible for a special SBA program that will help me start a small business. He said I could compete for government contracts through this program. Can you tell me what SBA program he's referring to?-- Clara P.

A: Your friend is probably referring to the Small Business Administration's (SBA) 8(a) Business Development (BD) Program. The 8(a) Program (named after the section of the Small Business Act from which it comes) is an SBA program created to help small disadvantaged businesses better compete in the U.S. marketplace and within the arena of government procurement. The SBA provides business development, technical assistance and other services to the small businesses that are accepted into the 8(a) program.

The 8(a) program is reserved for what the SBA calls "socially disadvantaged individuals." Socially disadvantaged individuals are defined as those who have been subjected to racial or ethnic prejudice or cultural bias because of their membership in a disadvantaged group.

The SBA has designated the following groups as socially disadvantaged:

· Black Americans · Hispanic Americans · Native Americans (Native American Indians, Eskimos, Aleuts, and Native Hawaiians) · Certain Asian Pacific Americans · Other individuals who can prove that they meet the SBA's criteria to be considered socially disadvantaged

One point where your friend is incorrect is that the 8(a) program is for new companies. The 8(a) program is primarily for companies that have been in business for a minimum of two years, though that rule may be waived if your company is able to meet some pretty strict management, financial, and performance criteria.

Obtaining 8(a) status is no guarantee that a company will be successful in obtaining government or other contracts, but it certainly doesn't hurt. The Small Business Act mandates that all small businesses have the opportunity to provide goods and services to the U.S. government. To help ensure that mandate, the SBA negotiates annual procurement preference goals with every Federal agency and reviews each agency's results to make sure the goals were met.

The statutory goals are: 23 percent of all prime contracts go to small businesses; 5 percent of prime and subcontracts for small disadvantaged businesses; 5 percent of prime and subcontracts for women-owned small businesses; 3 percent of prime contracts for HUBZone small businesses; and 3 percent of prime and subcontracts for service-disabled veteran-owned small businesses.

A HUBZone (Historically Underutilized Business Zone) is a designated area within urban and rural communities that has been given preferential contract award consideration in an effort to stimulate economic development. A company may qualify for HUBZone status if it is owned or controlled by one or more U.S. citizens, has at least 35 percent of employees who live within the designated zone, and has a principal office located there. HUBZones are a whole 'nother topic that we can discuss at another time. Suffice it to say that a company that obtains both 8(a) and HUBZone status may be entitled to double dip in the government procurement trough, that's why you often find a number of 8(a) companies specifically moving into HUBZone areas to take advantage of the perks both programs offer.

The U.S. government purchases billions of dollars in goods and services every year, everything from staples to those wonderfully expensive toilet seats. Obtaining 8(a) status allows small businesses to compete for a portion of that business.

The basic requirements for applying for 8(a) status are your company must be a small business as defined by the SBA, must be owned and controlled by one or more socially and economically disadvantaged individuals who are U.S. citizens, and must show a potential for success. The SBA defines a small business as "one that is independently owned and operated, is organized for profit, and is not dominant in its field."

As expected, the 8(a) program has its fans and its detractors. It's fans are those companies that obtain 8(a) status and thereby get preferential treatment when competing for government procurement contracts.

The program's detractors are typically those companies that fail to obtain 8(a) status or that do not meet the definition of socially disadvantaged, i.e. businesses owned my white American males (that's a can of worms we won't open this week).

You can learn more at the SBA's website (sba.gov) or by calling your local SBA office.

Here's to your success!

Tim Knox

Small Business Q&A is written by veteran entrepreneur and syndicated columnist, Tim Knox. Tim serves as the president and CEO of three successful technology companies and is the founder of DropshipWholesale.net, an online organization dedicated to the success of online and eBay entrepreneurs.

RELATED ARTICLES

Profits are within 6 Degrees of Freedom
How far away is the person you need to meet?

Boy oh Boy, The Obstructions and Obstacles
The bad things starts with the letter 'O'?.like Obstacles, Obstruction, Obscene?.overly-poor? There's bound to obstructions and obstacles in everything that we do in life. Like riding a bicycle. We get a few scrapes and bruises and think that we're never going to ride a bike ever again. We try to blow bubblegum and we blow it up in our own face and have our laughing friends jeering at us. We try to dress up only to find out that we look dowdy. Everything in life, there's an obstacle.

Increase Your Profits with a Point of Sale (POS) System
Whether you operate a chain of restaurants, a mom-and-pop convenience store, or a medium-sized retail shop, you are in business to make money. And, one of the most critical aspects to your profit and loss is your ability to track information? you need to know which products are making you money, what items need to be re-ordered, who your customers are, and so on. This is where today's point of sale (POS) systems play such a valuable role.

Are You a Small Business Casualty?
When a person knows and knows not that he knows. Teach him.

Getting Behind in Your Work? You Need a Virtual Assistant!
If you don't know what a Virtual Assistant (or VA) is, don't worry. I only came across the term myself about a year ago. It seemed like a high-tech occupation that I would know little about until I stumbled across some information and found out that I was a Virtual Assistant! Not only that, I realized that small businesses were missing out on the opportunity to improve their efficiency by neglecting the vast talent so easily available online.

Do I Have to Do EVERYTHING Myself?!
The air in my client's office nearly crackled with her irritation. A scheduling snafu had left a client without important services. "I guess I just have to do everything myself," she ranted.

Setting Up a Pressure Washer Rig to Clean Concrete
Maximum efficiency in the cleaning industry is a key to survival and higher rates of income. The trailer or tuck unit needs to be set up so that you can use a garden hose and external water supply, because you never know when you are going to need one for concrete or other types of jobs. Any new rig should also come with quick releases between the tank and the intake tube to the pressure washer. There should also be a valve that is turned so the water is running from the black tank that now holds the external water that comes in if you are running thru an unmodified hot water pressure washer skid unit with a float tank.

Challenging the Gospel of Growth -- Must Business Grow to Survive?
A cherished business doctrine is that growth must be a primary business purpose: "grow or perish" is a mostly unquestioned truth. At South Mountain we favor certain kinds of growth, but not expansion for its own sake, which author Edward Abbey described as "the ideology of the cancer cell." We embrace growth to achieve specific goals, but always with consideration of the consequences: it may disrupt and endanger treasured qualities. We look for ways to develop and thrive without enlarging, thereby holding to limited growth. When we grow, it is by intention rather than in response to demand. We think about "enough" rather than "more"-enough profits to retain and share, enough compensation for all, enough health and well-being, enough time to give our work the attention it deserves, enough communication, enough to manage, enough headaches.

How Small Business And Nonprofits Can Afford Multimedia For The Web
Multimedia is everywhere on the Internet, whether in the form of floating ads at major websites, streaming video or animated presentations. Of course, there is a good reason why multimedia has become such an integral part of the web experience: it's an effective tool for capturing attention or provoking visitors to buy or contact the site owner. For these reasons, many educational institutions, businesses, and other organizations desire multimedia presentations. Unfortunately, at first glance multimedia, often appears prohibitively expensive for small businesses and non-profits. The following represent a number of ways to control the high cost that typically accompanies multimedia production without losing quality. We believe these suggestions will ensure that you save money but still feel good about your investment.

Presentations and Sales Automotive Detailers
Many auto detailers fall short in their sales presentations. I have often shopped the competition to see what their knowledge base was to gage their worthiness as a formidable competitor in the market place. What I have found is that many auto detailers lack the specific knowledge needed to help their business grow and to present themselves as experienced in their work to the customers.

(P)Refer to Grow Your Business
(Although this article is geared towards small business owners, the information is just as applicable to a similar personal situation, only the action is slightly different.)

6 Steps to a Successful Medical Spa Expansion
According to the American Society for Aesthetic Plastic Surgery, since 1997, nonsurgical procedures have increased by 471 percent. Jeff Russell, CEO of MedSpa Financing, comments "Medical Spas are a natural progression of medical practice expansion, having a medical doctor run them gives them the credibility and public confidence needed for their success."

Franchise Territories are Generally Delineated On a Map; Why?
If you own a mobile service or home based franchise your exclusive territory will be delineated on a map in the attachment of your franchise agreement. You will be assigned generally a single city, county or region and another franchisee or team member of the same system will not compete with your although may be right around the corner. You will only drive or be required to service clients as far as your exclusive territory boundaries. Unless of course there is no franchisee in the next city over, then might be willing to temporarily expand your market region if it is okay with the franchisor. You may go to that city periodically for special people or special clients that have needs of services. This is why we have exclusive territories in the franchising industry.

Creating a Power Plan
Part of the power plan is making sure you have all the necessary contact information within a company. It is one thing to have the CEO's information, as he is the decision-maker, but it is quite another to have the information on others that you may be working with directly. You will not likely work directly with the CEO on any project or product purchase; you will be referred to the appropriate person. The information you gather on others should be the same as the information you gathered on the CEO. You will need to know the personality type to give you that inside edge, and also how much influence they have on the decision to make a purchase; you may find that these other contacts have an authorized spending limit following a set of guidelines.

Starting a Small Business? ?Tips from a Veteran
Congratulations, you are starting a small business! You are taking charge and going for your piece of the American dream! Your excitement is high, and the adrenaline is pumping! Everyone dreams of freedom and owning a successful business, but not everyone can successfully create that reality. Now that you've made the commitment to give it a shot, let me give you the single most important tip that I can give you to insure your success. Businesses that succeed whether large or small all begin with a business idea. Your challenge is to determine if your idea will be a winner or a loser.

Site Selection - Slice of Life, A Car Wash and Detail Center DownTown
There is a continual trend we are seeing which I can remember participating in over a decade ago, when cities were trying to figure out how to increase sales tax revenues when the large box stores outside of town came into nearby or surrounding areas. For instance a big and easy example would be Wal-Mart. Sam was smart and built his stores just outside of town near towns, which drew from neighboring towns of 5,000 or more from three to five directions. If you look at an over lay of Wal-Mart stores to an atlas of that state you will see the rural America can get anything they need at the best price without driving all that far.

Choose Your Own Guru
What is a guru?

Lack of Vigilance Can Harm the Bottom Line
The easiest way to lift profits is to cut the fat out of costs.

A Key to Success: Be Consistent
Over the years I heard the best way to learn something is toto teach it. Well, this week's topic, practicing consistentbehavior, is definitely something I need to learn and practicemore effectively.

Awning Cleaning Business Case Study: Entrepreneurship 101
It is most fascinating to study how entrepreneurs spot opportunity in the market place. "My name is Lance Winslow and I am a serial entrepreneur, I admit I am addicted and need help." ..."Hello Lance." Let me explain how I formed one of my companies which became a franchise system in itself and became a module under the umbrella company I had formed many years the prior. I at first saw it as another business to fit into our growing niche of cleaning businesses. It was to be called the Awning Wash Guys. This is an interesting case study in how businesses form and how companies seek, find and exploit opportunity in the market place. Here is the story:

home | site map | www.1001topwords.com