It has been said that one of the hardest things to deal with during crisis management for a business is the firm’s own internal inertia. Dealing with business inertia is like putting children to bed, it can be very difficult to get them in bed on time and then hard the following morning to get them up again.

During the times of the COVID-19 Pandemic, businesses have already had to adapt their business models to greatly reduce human contact. Firms may want to eliminate non-performing products or services that they were on the fence about previously. Businesses should also focus on what potential new revenue streams are available.

Some adaptive business models I have seen work successfully:

1. A firm that films equestrian events is remarketing films from past year’s shows. People that are sitting at home on their couches unable to complete are buying them up resulting in massive profits for the photo shooting business that otherwise would have no revenue this year.

2. A local brewery/pub unable to have customers come into their establishment is making small creative batches of beers and releasing them online at set times. The creative brews are selling out online in under an hour.
    
3. A manager of a large high-end franchise restaurant has gone strictly to carry out, they had no carryout service before.

4. A local bakery that normally sells donuts has shifted to making bread, as many grocery stores are limiting bread purchases to 3 items. Their small tent outside the bakery is selling out of loaves every morning.

5. An RV rental business is renting RVs to hospitals as places their staff can go in small numbers for breaks.

All these businesses, and their respective pivot, required some risk, trial and error, and initiative. Furthermore, they required overcoming the inertia in the organization.
 
6. Going into Federal contracting as an alternative revenue source using the 8(a) Certification to obtain preferential treatment.

With respect to idea #6, here are some of the most common reasons firms gain inertia and fail to move forward with an 8(a) application.
   
1.) INERTIA:  Your company cannot get 8(a) certified if it has not been in business for at least 2 years.

There is a waiver process for businesses looking to obtain their 8(a) Certification sooner than 2 years. The typical requirements are that:
 
a. The owner of the firm has significant industry experience. 
b. The business has one tax return with revenue and an income.
c. The owner of the firm works full-time for the applicant concern.
d. The firm has revenue from its inception greater than $150,000.
e. The business and owner meet all other 8(a) requirements.

Note:  A 2-year waiver is not needed if the company is only changing the organizational structure of the business. For example:  Changing a sole proprietorship to a corporation.
  
2.) INERTIA:  Your company cannot get 8(a) certified if your past application has been rejected by the SBA.

The SBA rejects 70% of all applications completed by non-professionals largely in part due to lack of completeness. A firm having its 8(a) application rejected on the first attempt is very common.
  
3.) INERTIA:  The 8(a) Certification really can’t do that much for my business.

In 2019, 8(a) certified companies received over $40 Billion dollars in government contracts, which represents over 7+ million dollars in annual revenue per 8(a) firm.
  
4.) INERTIA:  My company should be a well-established mid-tier business before I apply for the 8(a) Certification.

The SBA gives 8(a) companies the ability to engage in Joint Venture Partnerships and Mentor Protégé Arrangements with larger governmental contractors. These relationships can greatly increase a firm’s growth rate by providing the 8(a) firm with expertise, bonding, insurance, and financial capabilities, as well as other assistance.
  
5.) INERTIA:  I must be a 100% member of a minority group in order to prove to the SBA I am socially disadvantaged.

An individual that can trace 25% of their blood-lineage to a presumed disadvantaged minority group is eligible for an 8(a) Certification given adequate supporting documentation showing the person holds themselves out to be part of that minority group.

If you are interested in exploring how an 8(a) Certification could boost your future business development potential and capabilities, I always recommending contacting an industry expert such as ez8a. They can be reached at (859)442-3300 and do not charge for an initial consultation.