8a Company

There are many benefits to running an 8a company. Obviously, with the 8a program being a SBA designation, the primary benefit is for federal contracts. However, there are plenty of tremendous benefits that derive from the 8a program.

Federal Contracts

Selling to the federal contract can be easier for an 8a company. Indeed, lightning does strike and there are purchasing officers who will buy from you simply because you’re an 8a company. Once heard from a GSA official that exact story, a lady who’s business is office supplies received her 8a certification and began to make a lot of money just because in the CCR vendor database she had her 8a, HUBZone, and being woman owned business. This is the exception and not the rule.

The reality is that even with 8a certification an 8a company will need to work at acquiring sales and contracts. Certification is only another arrow in the quiver. Once one learns to weild their certification, is can become an formidable sales asset. 8a companies can be contracted with without competition for contracts under $3 million dollars and contracts can be designated 8a set-asides, meaning only 8a companies can compete for those contracts. Once contracting officers see the value of keeping incumbent 8a companies (see my hub on the Definition of Procurement), there will be no better ally for your company. They will do what they can to work with you, and will begin to utilize your 8a status.

Other Governmental Minority Programs

Getting your certification as an 8a company is a slow and convoluted process, but most who set out make it eventually. The same can be said for other minority certifications outside of the federal government, like state and local governments. They often want the same paperwork and assurances that your company is truly minority owned and not just a shell company. They have their own minority assistance programs which can help you acquire contracts and sales with them. The benefit to having 8a certification is that these programs often take having it in leiu having to go through a more formal vetting process. This substitution makes your state or local certification much easier and quicker to acquire.

Government Prime Contractors

Prime contractors with the government also have small and disadvantaged business requirements also. They are on the lookout for 8a companies to do business with or subcontract with. Sometimes as part of their governmental contracts they set-aside a portion of the contract just for disadvantaged businesses. This can be your “in with” with the large contractor. Also, just like a federal contracting officer, prime contractor also like to continue to do business with 8a companies they know and have utilized before. The upside is that they have little incentive to compete contracts, and can meet their requirements by just giving your company a subcontract. But these tidy arrangements only happen after they know your company and it has proven itself. However, your 8a certification can be your foot in the door.

Corporate Diversity

Large public corporations will have a diversity program and an 8a company will have a leg up. The company’s certification will authenticate a company as being minority owned. This will allow the corporate diversity personnel to give you all access they can.

Realize that the corporate diversity department will not have anything canned for you, but what they do have is access to all departments. It will be up to work all leads and make it happen. There are times when departments within the corporation will inquire about possible businesses to do work with and guess who the diversity personnel will recommend? The businesses they are most familiar with, those that that have been actively working within the corporation.

Minority Owned B2B

Utilizing the SBA database one can find a number of registered businesses. Searchable by company size, age, location, industry code, and any number of other variables the database can produce a list of businesses. This list is often utilized by other minority businesses to find a company for a service or product. This is the golden rule at work, if a minority company wants business as a minority business, they need to give other minority business work.

Also, the SBA database can bring opportunities from companies that would like to utilize an 8a company for a teaming or joint venture arrangement. There are times the government may approach an 8a company to utilize another business for a contract that all parties win. The government gets what it wants, the utilized business gets the work, and your business just got money for doing little work or prospecting.

Visit my hub on SBA HUBZone for reasons it is a great place to start government contract set-asides and certifications.