Is an 8(a) Certification right for your company?

As defined in our Glossary of Terms the 8(a) certification is offered by the United States Small Business Administration (acronym SBA (pronounced S-B-A)).  This enrolls a SMALL business in the SBA’s nine year Business Development Program.

A major feature of this program is the ability to participate in federal procurements that are specifically set aside for 8(a) certified businesses. If your company is interested in doing business with federal agencies and it meets the disadvantaged SBA standards, the 8(a) certification program might be a good fit for you.

Beyond procurement assistance, the SBA has a variety of mentoring, educational and loan opportunity programs that go along with the 8(a) program.  As an 8(a) your business may be able to participate in one or more of these programs.

Though the 8(a) process is similar to applying for any diverse certification there are a few important differences. To be eligible for the 8(a) certification/program a business must be meet the SBA’s small business sizing definition (which can be found on the SBA’s 8(a) Business Development Program’s FAQs). Like other certifications the business must be owned and controlled at least 51% by socially or economically disadvantaged owners who are United States citizens. The business must also show potential for success.

In the United States a disadvantaged individual is a person who is an American Indian or Alaskan Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander, or a person whose ethnicity is Hispanic or Latino. Women are considered among the minority group because historically, they have had limited access to educational and professional opportunities. Veterans and Service Disabled Veterans of the U.S. Armed Forces (Air Force, Army, Coast Guard, Marines and Navy) are also considered disadvantaged individuals. However, the SBA allows individuals who do not meet these designated groups to apply for the 8(a) certification/program if they can establish a claim of social disadvantage with what they term a “preponderance of evidence.” For more information on this please see the SBA’s 8(a) Business Development Program’s FAQs.

So what else is different? The SBA requires a written narrative, which we think this is one of the most difficult tasks for entrepreneurs. In this narrative, the owner must write about his/her personal experiences and how these experiences might have had a negative impact on the owner’s ability to enter or advance in business.  This can include educational, financial, racial, gender, geographical and employment related events throughout the owner’s life.  Some questions to think about:

• Were you ever denied access to mentoring, on-the-job training, apprenticeships, etc. required to gain the necessary skills to advance in your field?
• Were you ever subjected to significant variations in salary and/or fringe benefits from those of equally qualified contemporaries?
• Were you ever denied salary increases, bonuses or commissions for reasons that were different than those required of other individuals possessing equivalent qualifications?
• Have you experienced a “glass ceiling” for reasons that were different than those applied to other individuals of equivalent qualifications that kept you from advancement into management positions?
• Have you ever been excluded from participating in company groups or functions for reasons different than those applied to other similarly situated individuals which had a negative impact on your ability to enter or advance in business?
• Have you ever been denied employment opportunities for reasons different than those applied to others who were not socially disadvantaged individuals?
• Were you ever subjected to social pressures that discouraged you from pursuing professional or higher education or to select career opportunities that might naturally prepare you for business ownership?

If the answer to one or more of these questions is yes, you will need to write about your specific experiences. Most entrepreneurs usually talk about these difficulties in a positive way, as issues that helped motivate them to do better on their own.  Overcoming hurdles is a good thing, having obstacles placed in your path was not.