Welcome to Golden nugget Friday, today’s topic we will discuss how Small Businesses, Women, Veteran or Indian owned business in the United States can access over $500B dollars in contracts thru programs with US Small Business Administration. This topic was inspired by Peg Stessman’s interview earlier this week, if you have not already listened to episode 011 I suggest you do. Peg tells her story and shares tips & best practice to manage bank loans to ensure you don’t experience the bank pulling your loan with 90 days to repay. Hear how her company set and achieved their BHAG (Big, Harry, Audacious, Goal) and Achieve 40M in Revenue in under 10 years. She explains how their next BHAG came from the employees and when it was rolled out to the company it was epic!
To give you a bit of background on this program, the U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy. Although SBA has grown and evolved in the years since it was established in 1953, the bottom line mission remains the same. The SBA helps Americans start, build and grow businesses. Through an extensive network of field offices and partnerships with public and private organizations, SBA delivers its services to people throughout the United States, Puerto Rico, the U. S. Virgin Islands and Guam.
Did you know the U.S. government is the largest single purchaser of goods and services in the world, buying everything from armored vehicles and cutting-edge scientific research, to paper clips and super computers? Every year, the federal government awards more than $500 billion in contracts, and a significant share of those contracts are made specifically available for award to small businesses.
The U.S. Small Business Administration provides assistance primarily through its four programmatic functions:
1. Access to Capital (Business Financing)
SBA provides small businesses with an array of financing for small businesses from the smallest needs in micro lending - to substantial debt and equity investment capital (venture capital).
2. Entrepreneurial Development (Education, Information, Technical Assistance & Training)
SBA provides free individual face-to-face, and internet counselling for small businesses, and low-cost training to nascent entrepreneurs and established small businesses in over 1,800 locations throughout the United States and US territories.
3. Advocacy (Voice for Small Business)
Created in 1978, this Office reviews Congressional legislation and testifies on behalf of small business. It also assesses the impact of the regulatory burden on behalf of small businesses. Additionally, it conducts a vast array of research on American small businesses and the small business environment. The Chief Counsel of this office is appointed by the President of the United States.
4. Government Contracting (Federal Procurement)
The Small Business Administration sets goals with other federal departments and agencies to reach the statutory goal of 23 percent in prime contract dollars to small businesses & Small Disadvantaged Businesses. This office also provides small businesses with subcontracting procurement opportunities, outreach programs, and training. They have specifically designated
– 5%, to businesses that are women-owned (WOSB)
– 5% to service-disabled veteran-owned businesses (SDVOSB)
– 3%, to businesses that are located in historically underutilized business zones (HUBZone firms)
– 3%. to small businesses that have access to long-lasting development opportunities, which means working with small businesses to help them to become and remain competitive, as well as encouraging federal agencies to award more contracts to small businesses.
Peg Stessman has been a part of the WOMEN-OWNED SMALL BUSINESS FEDERAL CONTRACT PROGRAM and it has helped her company grow to over 44 Million in Revenue.
Have a quick listen to what Peg had to say about the program.
Peg inspired me to elaborate on the Women Owned program so you too can participate, if eligible. Women-Owned program became effective February 4, 2011, aimed at expanding federal contracting opportunities specifically for women-owned small businesses. This program authorizes contracting officers to set aside 5% of the $500B/year of federal contracts for eligible women-owned businesses and economically disadvantaged women owned small businesses (EDWOSB) in specified industries where it has been determined are underrepresented. According to my calculations that is not a small number we are talking twenty five Billion dollars per year! To be eligible, a firm must be at least 51 percent owned or controlled by one or more women. The women must be U.S. citizens and must be “small” under its primary industry in accordance with SBA’s size standards established for under the North American Industry Classification code.
Four steps on how you register for Government Contracting
Once you have classified your company based on the established size standards, you are ready to begin registering to do business with the government. Follow these easy steps to certify your business as small and obtain the registrations you need to begin bidding on government proposals.
1. Obtain a D-U-N-S Number
You will need to obtain a Dun & Bradstreet D-U-N-S® Number. This is a unique nine-digit identification number for each physical location of your business. The assignment of a D-U-N-S Number is free for all businesses required to register with the federal government for contracts or grants. Visit the D-U-N-S Request Service to register or read a quick overview here.
2. Register your Business with the System of Award Management (SAM)
You need to register your business with the federal government's SAM, the primary database of vendors doing business with the federal government. This registration is sometimes referred to as "self-certifying" your small business. Federal Acquisitions Regulations (FAR) require all prospective vendors to be registered in SAM prior to the award of a contract, basic agreement, basic ordering agreement, or blanket purchase agreement.
SAM is also a marketing tool for businesses. SAM allows Government agencies and contractors to search for your company based on your ability, size, location, experience, ownership and more. SAM also informs searchers of firms certified by the SBA under the 8(a) Development and HUBZonePrograms.
3. Find the NAICS Codes for Your Company
You may also find that you need a North American Industry Classification System (NAICS) code for administrative, contracting and tax purposes. The code classifies the economic sector, industry and country of your business. For Federal contracting purposes, you will need to identify in SAM all the NAICS codes (industries) applicable to your business. Read Identifying Industry Codes for more information.
4. Obtain Past Performance Evaluations
Businesses interested in getting on the U.S. General Services Administration (GSA) Schedule for contracts should obtain an Open Ratings, Inc. Past Performance Evaluation. Open Ratings, a Dun & Bradstreet Company, conducts an independent audit of customer references and calculates a rating based upon a statistical analysis of various performance data and survey responses.
Golden Nugget Reflection:
As I reflect on my experience having applied for Government export grants as well as Women or minority owned programs such as the Small Business Administration. If your application is successful it can provide your company a competitive advantage over your competition. It provides a level playing field when you are bidding for Government contracts as you would only be competing against other approved small business not large organization that have more resources such as advanced infrastructure and financial backing.
No matter what country you live in, our suggestion would be to investigate what government incentives are available for your business.
Lastly I will share the Lessons I have Learned:
Applying for Federal Government Programs like SBA take time to complete sometimes over a year with multiple submissions, and leaves you completely frustrated if unsuccessful! You may want to consider hiring a consultant or attorney for some or all of the application completion process. Many small business owners who apply for the Program on their own, actually do more harm than good by not knowing the Program rules and regulations and therefore can cause themselves to be ineligible.
The fact is that not everyone can get Certified. As of August 2015, there are only 6,657 active SBA Program participants. The bottom line is that it is very important to get your Application done right the first time it is submitted. Remember cost is not always the best determination when choosing the right consultant. Here are three very important points to take into account when you consider hiring a consultant.