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8(a) certification tips from an industry expert

March 24, 2023//by Hutch
8(a) certification tips from an industry expert

Note: This post has been updated with the latest information from SBA on their 2023 social disadvantage requirements.

The Small Business Administration’s (SBA) 8(a) program is a valuable tool that helps small businesses win government contracts. 

Hutch Program Manager Stephanie Chin sat down with Monica Randall — CEO of The Randall Group and Hutch coach — and Summer Bazemore — CEO of Ey3 Technologies and Hutch graduate — to discuss the 8(a) certification process. 

Monica worked at SBA for 23 years before founding The Randall Group in 2011. She’s now leveraging her extensive experience and insider knowledge of the 8(a) program as a Hutch coach. And Summer, who has over 20 years of experience in systems engineering and computer science, received 8(a) certification for Ey3 in June 2022. 

The combined knowledge and experience of Monica and Summer resulted in a fascinating and informative discussion full of useful tips for anyone interested in getting their 8(a) certification. 

What is 8(a)?

At Hutch, we understand how difficult it is to own and run a small business. This is one reason why we encourage the entrepreneurs in our cohorts to consider 8(a) certification. 

8(a) is a nine-year program that helps disadvantaged small businesses win government contracts. It’s a valuable certification that allows small businesses to go after contracting opportunities that are set aside for those who hold 8(a) certification.

“As a small business,” says Summer, “it can be hard to get into the right spaces and make the right partnerships quickly. But being 8(a) certified is advantageous to us and allows us a better chance of success.”

8(a) certification helps small businesses reach clients and win contracts they may not have access to without it.

If you want to learn more about why Ey3 decided to get 8(a) certified and what they learned from the process, check out our post discussing their 8(a) journey.

Tips to know before applying.

Taking the time to prepare as much as you can before applying for 8(a) will ensure a smoother process. It will also allow you to hit the ground running as soon as your application is approved. Here are a few tips to help make that process easier.

Eligibility.

One of the first steps to your application process will likely be determining your eligibility for the program. SBA’s eligibility requirements are that: 

  • You must be a small business.
  • You must not have previously participated in the 8(a) program.
  • Your firm must be at least 51% owned and controlled by US citizens who are socially and economically disadvantaged. As of August 21, 2023 you’re required to submit a social disadvantage narrative to establish your eligibility. 
  • You must have a personal net worth of $850 thousand or less, adjusted gross income of $400 thousand or less, and assets totaling $6.5 million or less.
  • You must demonstrate good character.
  • You must demonstrate your potential for success, such as having been in business for two years.

SBA also has a useful Am I Eligible? tool that helps your small business determine if you qualify for the 8(a) program

But, while these are valuable starting points, it’s hard to know what these requirements actually mean and how SBA evaluates them. Learn more about 8(a) eligibility and if it’s right for your business. 

Your vendors should be very familiar with the 8(a) process.

Begin working with vendors and service providers who are familiar with 8(a) as early as you can. 

“If you’re just getting started and you plan to get your 8(a),” says Summer, “make sure that your vendors and service providers are very familiar with the process. If they understand and have some experience at it, you’ll be set up to be successful when you begin this process”

For Summer, she particularly recommends looking for accountants who are familiar with 8(a) as early as you can. Doing so will ensure that your taxes are organized according to SBA’s standards. It will also help you avoid lengthy amendments during the application process. 

But it’s not only financial advisors who can help ensure a smoother 8(a) application process. Consulting companies like The Randall Group are also valuable resources that can help guide you through every step of the process. 

Without the help of Monica and The Randall Group, Summer says that she “doesn’t know if we would have been successful. Just knowing everything that went into the application process and that we had to put together.”

Remember: you don’t need to do this process on your own. There are many experienced vendors and service providers out there who can help you on your 8(a) journey. And working with them early on is a great way to create a smoother application process.

Marketing.

Many people might assume that marketing your 8(a) certification should only begin once you’ve been certified. But this would be too late. Instead, you should begin marketing while you’re still in the application process.

“Start marketing immediately,” says Monica. “8(a) is all about marketing and building relationships. It’s one of those certifications that you need to know how to leverage. And you need to tell both your potential and existing clients that you’ve been certified or that you’re working on your certification.”

8(a) certification isn’t enough on its own. Without marketing yourself and your certification, you’ll fail to win the contracts that will be available to you through the program. Taking the time and expending the effort to invest in marketing will help you fully leverage 8(a). 

Common application mistakes.

8(a)’s application process is notoriously difficult and mistakes are common. Each mistake will delay when your application is approved. But it’s important to remember that most mistakes are solvable. If you find that there are any that you can’t mitigate before you begin the application process, that probably means you should put off applying until you can. 

Character issues.

SBA conducts an FBI background investigation on the individual on whom eligibility is based to ensure they have good character. And a common mistake is failing to include — or simply forgetting — something on your record. Even if it occurred decades ago and was ultimately dropped, it’s still important to disclose. 

“If you submit your application and leave something out,” says Monica, “that will go against your character evaluation and result in an automatic rejection” as it can seem as though you’re purposefully hiding it. 

Being thorough and disclosing any character issues in your application will help you avoid the automatic rejection that not disclosing them could necessitate.

Financials not being in order.

This can be something as simple as your company’s retained earnings. Over her 33 years of experience, Monica has “seen in almost every letter that every client has ever received from SBA after submitting their application that the retained earnings didn’t carry forward from one year to the next.”

Monica’s biggest piece of advice to address this mistake is to “go back and check that your retained earnings are being correctly carried from one year to the next.” 

Operating at a loss.

It’s also important to ensure that your company isn’t operating at a loss. This requirement is necessary because it demonstrates to SBA that you have the money required to fund contracts and win work. 

This might seem like an easy requirement to fulfill when you first apply. But the lengthy nature of the application process can mean that by the time your application is ready to be approved, your business might no longer be as financially stable as it had been. This will then cause the application process to stop.

Keeping a close eye on your finances, keeping your business in good standing, and waiting to apply until your firm’s finances are strong will help you avoid any delays that operating at a loss would bring.

Your firm’s infrastructure isn’t strong.

Finally, you’ll want to ensure that your firm’s infrastructure is strong. An important aspect of this is having meeting minutes not only recorded and preserved, but also easily available as you’re required to share them with SBA. 

Even if you’re a sole-member LLC, SBA requires that you meet with yourself at least once a year and document the minutes of that meeting. This might seem a bit ridiculous, but it’s a requirement that will be important for your certification. And if you don’t do this from the beginning, you’ll have to go back and date two years’ worth of these minutes.

This work, while it might seem difficult and tedious, will result in you having a better company, internally. 

Myths about 8(a) certification.

8(a) is a well-known and popular certification program. But there are still some myths and misconceptions surrounding it. Recognizing these myths will help you understand what the program entails and what you can expect from it. 

8(a) will make you rich with minimal effort.

8(a) is a valuable certification that can do a lot for your company. But it’s important to remember that it’s also a business development program. It wasn’t created or designed to make individuals rich. 

8(a) certification allows your small business to compete with other businesses that are the same or a similar size to yours. This gives you the opportunity to bid on contracts that you wouldn’t normally have access to. While this creates amazing opportunities, it also requires a lot of work. 

According to Monica, “8(a) can make you a millionaire and it can make your business humongous.” But it’s going to take a great deal of effort to reach that payoff. 

SBA will hold your hand throughout the process.

Another common misconception is that when you get certified, SBA will hold your hand throughout the program. Whether this is by finding you clients and contacts, or handing you contracts.

By getting certified, you will have access to one-on-one business development assistance. You’ll also have technical help and mentorship opportunities. But SBA expects you to come into the program with a certain level of knowledge. 

By requiring applicants to have been in business for at least two years, SBA assumes that you already have customers and that you know how to get work, fund a contract, and perform well. 8(a) is a business development program aimed at small businesses that are ready to hit the ground running on their own. 

If this isn’t what you were expecting when you started looking into 8(a), you can always wait to apply until you feel that you have a better knowledge base. You can also utilize a consulting firm like The Randall Group, who will help you identify knowledge you might be missing. They’re “available to answer questions and send over information,” says Monica. “Even if it necessitates a lot of back and forth, in the end it ensures that, by the time you get approved, you’re ready to get to work.”

8(a) certification TLDR.

8(a) is a valuable certification that can give your small business an edge in a very competitive environment. But, if you’re still not sure if 8(a) is right for you and your business, our post “Is 8(a) right for you?” can help.

Watch our LinkedIn Live to hear Stephanie, Monica, and Summer share their 8(a) certification tips.