Released on: March 24, 2008, 7:49 am

Press Release Author: DEV DAAS/Technoflickers

Industry: Small Business

Press Release Summary: Q: A friend told me that as a woman of Native American
descent I might be eligible for a special SBA program that will help me start a
small business.

Press Release Body: Q: A friend told me that as a woman of Native American descent I
might be eligible for a special SBA program that will help me start a small
business. He said I could compete for government contracts through this program. Can
you tell me what SBA program he\'s referring to?
-- Clara P.

A: Your friend is probably referring to the Small Business Administration\'s (SBA)
8(a) Business Development (BD) Program. The 8(a) Program (named after the section of
the Small Business Act from which it comes) is an SBA program created to help small
disadvantaged businesses better compete in the U.S. marketplace and within the arena
of government procurement. The SBA provides business development, technical
assistance and other services to the small businesses that are accepted into the
8(a) program.

The 8(a) program is reserved for what the SBA calls \"socially disadvantaged
individuals.\" Socially disadvantaged individuals are defined as those who have been
subjected to racial or ethnic prejudice or cultural bias because of their membership
in a disadvantaged group.

The SBA has designated the following groups as socially disadvantaged:

. Black Americans . Hispanic Americans . Native Americans (Native American Indians,
Eskimos, Aleuts, and Native Hawaiians) . Certain Asian Pacific Americans . Other
individuals who can prove that they meet the SBA\'s criteria to be considered
socially disadvantaged

One point where your friend is incorrect is that the 8(a) program is for new
companies. The 8(a) program is primarily for companies that have been in business
for a minimum of two years, though that rule may be waived if your company is able
to meet some pretty strict management, financial, and performance criteria.

Obtaining 8(a) status is no guarantee that a company will be successful in obtaining
government or other contracts, but it certainly doesn\'t hurt. The Small Business Act
mandates that all small businesses have the opportunity to provide goods and
services to the U.S. government. To help ensure that mandate, the SBA negotiates
annual procurement preference goals with every Federal agency and reviews each
agency\'s results to make sure the goals were met.

The statutory goals are: 23 percent of all prime contracts go to small businesses; 5
percent of prime and subcontracts for small disadvantaged businesses; 5 percent of
prime and subcontracts for women-owned small businesses; 3 percent of prime
contracts for HUB Zone small businesses; and 3 percent of prime and subcontracts for
service-disabled veteran-owned small businesses.

A HUB Zone (Historically Underutilized Business Zone) is a designated area within
urban and rural communities that has been given preferential contract award
consideration in an effort to stimulate economic development. A company may qualify
for HUB Zone status if it is owned or controlled by one or more U.S. citizens, has
at least 35 percent of employees who live within the designated zone, and has a
principal office located there. HUB Zones are a whole \'nether topic that we can
discuss at another time. Suffice it to say that a company that obtains both 8(a) and
HUB Zone status may be entitled to double dip in the government procurement trough,
that\'s why you often find a number of 8(a) companies specifically moving into HUB
Zone areas to take advantage of the perks both programs offer.

The U.S. government purchases billions of dollars in goods and services every year,
everything from staples to those wonderfully expensive toilet seats. Obtaining 8(a)
status allows small businesses to compete for a portion of that business.

The basic requirements for applying for 8(a) status are your company must be a small
business as defined by the SBA, must be owned and controlled by one or more socially
and economically disadvantaged individuals who are U.S. citizens, and must show a
potential for success. The SBA defines a small business as \"one that is
independently owned and operated, is organized for profit, and is not dominant in
its field.\"

As expected, the 8(a) program has its fans and its detractors. Its fans are those
companies that obtain 8(a) status and thereby get preferential treatment when
competing for government procurement contracts.

The program\'s detractors are typically those companies that fail to obtain 8(a)
status or that do not meet the definition of socially disadvantaged, i.e. businesses
owned my white American males (that\'s a can of worms we won\'t open this week).

You can learn more at the SBA\'s website (sba.gov) or by calling your local SBA office.

Here\'s to your success!


Web Site: http://www.start-ownbiz.com

Contact Details: Technoflickers