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If you are a small business owner competing for government contracts, you might have heard about the 8(a) Business Development Program. This program is open to small businesses that are at least 51 percent-owned by socially and economically disadvantaged individuals. This includes women, minorities, veterans, the LBGT community, and people with disabilities.
The U.S Small Business Administration says that the federal government’s goal is to award 5 percent of federal contracting dollars to 8(a) certified small businesses. The 8(a) Business Development Program offers a host of valuable resources to participating small businesses. By following these steps, you can determine whether your business is eligible for the program and learn how to get certified.
5 Steps to Applying for the 8(a) Business Development Program
Check Eligibility
The SBA has created a checklist of qualifications to be considered for the program which can be found on their website. You need to also be able to demonstrate how you are socially disadvantaged in addition to qualifying on a business-level meeting. This means you will need to show how your personal experiences have affected your ability to succeed in business.
Franchises, non-profit organizations, brokers, packagers, and businesses owned by other disadvantaged firms are excluded from applying.
It is important to note that if you have participated in the program before, you will not qualify. Another disqualifying factor is if you do not have good character.
The Two-Year Rule
The SBA uses length of time you have been in business as a gauge of potential success. The SBA requires that your business be open for two or more years to participate in the program because many businesses fail in the first two years of operating.
The easiest way to show that you have been conducting business in your industry for at least two full years is to submit copies of your two most recent federal tax return. If you only have one year of business tax returns, you’ll need to submit a waiver request.
Gather Information
The SBA will require you to take an online training and self-evaluation course. This allows them to determine if you are ready to apply for the 8(a) Program. You can also contact your local SBA office to verify that you are prepared to submit the documentation and forms.
Apply to Get Certified
Your application to be certified as an 8(a) business can be submitted electronically to the SBA. You might me required to mail signed hard copies. Although you can submit a printed application, the SBA recommends you do it electronically to expedite the process.
Your application will be reviewed for completeness, and you have 2 weeks to provide additional information if needed. When the application is complete, the SBA will make its final decision regarding 8(a) Program eligibility within 90 days.
Create a Business Plan
When you are certified, you will need to submit a business plan. This must be approved by an SBA specialist before you are eligible for program benefits. It should include the following:
- An analysis of market potential
- Evaluation of your strengths and weaknesses as a program participant
- Specific goals for business development
- A transition management plan
- Estimates of future contract awards
In addition, you should review your approved business plan with your SBA specialist. Then, forecast your needs for 8(a) Program contracts for the next year on an annual basis.
The Bottom Line
Participating in the 8(a) program can be beneficial. If you meet the eligibility requirements, contact your local SBA office so they can help you get organized and get the appropriate documentation and application forms.
