I recently reread what I consider to be a great business book. Ready, Fire, Aim: Zero to $100 Million in No Time Flat by Michael Masterson.
The book has many great lessons in business but what I think is the most important takeaway are that businesses have four stall points. These points seem to occur over and over again, no matter the industry, region, or any other factors. These stall points are based upon a hundred plus businesses the author studied/consulted with during the course of his career, as well as the businesses he personally owned. Getting past these stall points is critical to the long-term success of your firm, therefore it is paramount that you aware of them. It is my belief that an 8(a) Certification can help get a firm past these stall points.
The value of an 8(a) Certification is that it helps drive businesses from Stage 1 to Stage 2.
In Stage 1 the owner of the firm should be focused on selling his or her product. The average 8(a) Certification holder makes well over $5MM per year in federal sales. These sales are aided in part by the sole source and set-aside contracting opportunities an 8(a) firm is able to obtain using their SBA certification.
In Stage 2 the owner of the firm has maxed out the sale of their single product, generally exhausting their initial market. They now have to transition into generating new products to sell to continue to grow their business. An 8(a) Certification in my opinion is one of the lowest cost ways to virtually “add a new product” to the firm’s repertoire as 8(a) firms have the ability to reach new markets for the firm. The author of Ready, Fire, Aim feels that it takes approximately 10, $1MM products to move out of this business stage. Therefore, adding an 8(a) Certification has the potential of giving your firm access to the federal government for your new products.
If you need assistance exploring your firm’s potential becoming 8(a) certified, I always recommend contacting an industry expert such as ez8a or Advance 8a. Neither charge for an initial consultation.