How to Apply for the 8(a) Business Development Program
Per the U.S. Small Business Administration (SBA), the federal government’s goal is to award at least five percent of all federal contracting dollars to 8(a)-certified small businesses. Program participants can receive sole-source contracts worth up to $4 million for goods and services and $6.5 million for manufacturing. Additionally, program participants can partner with other eligible businesses to further their ability to compete in the American economy.
The 8(a) Business Development Program offers a host of valuable resources to participating small businesses. By following these steps, you can determine whether your business is eligible for the program and learn how to get certified.
5 Steps to Applying for the 8(a) Business Development Program
1. Check Eligibility
The SBA has created a checklist of qualifications to be considered for the program. You can also check your eligibility on the SBA’s Certify website. In addition to qualifying on a business-level and meeting the ownership and financial criteria, you must demonstrate how you’re a socially disadvantaged individual. In other words, you’ll need to show how your personal experiences have affected your ability to succeed in business.
Certain types of businesses are excluded from applying. This includes franchises, non-profit organizations, brokers and packagers, and businesses owned by other disadvantaged firms.
Also, it’s important to note that if you’ve participated in the program previously, you won’t qualify. Another disqualifying factor is if you don’t have good character (as defined by the SBA).
2. Meet the Two-Year Rule
The SBA uses the length of time you’ve been in business as a gauge of potential success. Since many businesses fail in the first two years of being operational, the SBA requires that businesses be open for two or more years to participate in the program.
The easiest way to show that you’ve been conducting business in your industry for at least two full years is to submit copies of your two most recent federal tax returns. If you only have one year of business tax returns, you’ll need to submit a waiver request.
3. Gather More Information
Next, the SBA will require you to take an online training and self-evaluation course. This allows them to determine if you’re ready to apply for the 8(a) Program. You can also contact your local SBA office to verify that you’re prepared to submit the documentation and forms.
4. Apply to Get Certified
Your application to be certified as an 8(a)-business, including any supporting documentation, can be submitted electronically to the SBA. Additionally, you may be required to mail signed hard copies. Although you can submit a printed application, the SBA recommends you submit an electronic application to expedite the process.
Your application will initially be reviewed for completeness, and you have 15 days to provide additional information if requested. Once the application is considered complete, the SBA typically makes its final decision regarding 8(a) Program eligibility within 90 days.
5. Create a Business Plan
Once you’re certified, you’ll need to submit a business plan. This plan must be approved by an SBA Business Opportunity Specialist (BOS) before you’re eligible for program benefits. It should include the following:
- An analysis of market potential
- Evaluation of your strengths and weaknesses as a program participant
- Specific goals for business development
- A transition management plan
- Estimates of future contract awards
In addition, you should review your approved business plan with your SBA BOS. Then, forecast your needs for 8(a) Program contracts for the next year on an annual basis.
Conclusion: Small Disadvantaged Businesses
Although the process to become 8(a)-certified can be lengthy, participating in the program may be beneficial. If you think you meet the eligibility requirements, start by contacting your local SBA office to establish a relationship. They can help you get organized so that you have the appropriate documentation and application forms.
Lastly, if your application happens to be rejected, ask for feedback. It may improve your chances of being approved the next time you apply.
Editor’s Note: This post was updated for accuracy and comprehensiveness in May 2019.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.