The SBA’s 8(a) Certification allows small minority-owned businesses the ability to obtain preferential treatment in the award of federal contracts. This advantage allows these firms to average over $5MM per year in federal contracts. There are millions of eligible minority-owned businesses, however there are only around 6,000 8(a) certified firms. Part of this low 8(a) program membership rate has to do with motivation, why someone chooses to do what they are doing.
Setting Goals - Motivational speakers often remind us that there are two types of motivation.
Intrinsic Motivation: This is motivation that comes from enjoying what we are doing. [You become the best you can be out of a personal desire to become the best.]
Extrinsic Motivation: This comes from external factors that are given by or controlled by others or outside forces. [You become the best because your drill sergeant has decided you will become the best.]
Once you decide it is time to get an 8(a) Certification, the first challenge is knowing where and how to begin the process.
-Should you attempt to do this on your own?
-Should you work with your accountant or attorney to complete it?
-Should I work with PTAC to complete the task or should I hire a firm that specializes in the 8(a) application?
Only the person spearheading the 8(a) application, which is generally the owner of the firm, can make this decision. Here is the list of pros and cons for the four methods of completing your 8(a) application.
Advantage: Lowest Cost Method
Disadvantage: Competently and correctly completing an application you will be tasked with only one time for most business owners is far less profitable than focusing on their core business.
Advantage: Trusted professional you work with all the time and is familiar with your business.
Disadvantage 1: Unless they have completed many 8(a) applications in the past, they can make costly missteps in the application process that can harm your firm’s ability of gaining acceptance into the 8(a) BD Program.
Disadvantage 2: These professionals are generally working on an hourly rate, and thus this is usually the highest cost method for obtaining your 8(a) certification.
Advantage: It’s free
Disadvantage 1: Generally, less time consuming than completing the application on your own, however from our experience people working through the application with PTAC usually end up working on the application for a year.
Disadvantage 2: PTAC will simply help the firm assemble the application, but usually do not place a high level of scrutiny on all parts of the application. Therefore, the firm could spend all this time and ultimately find out they weren’t a good candidate for an 8(a) at the time they submitted their application.
Advantage 1: The firm should in theory be able to obtain the 8(a) Certification in the least amount of time possible.
Advantage 2: The consulting firm should have the ability to pace the application so that it gets completed.
Neutral: Specialized Consultants are not free, but generally the cost is between $4,500-7,000 to complete the application, compared with $12,000-$20,000 using a firm's accountant or attorney.
Disadvantage: Hiring a professional that you don’t know can cause concerns in terms of competency and security of your firm’s information. This can be overcome by checking reviews and references, but should still be a concern.
Hopefully this fully piques your interest, and gets you off the dime. Obtaining your 8(a) Certification can greatly enhance the growth of your business, and if utilized properly, can be a life-changing pivot for everyone ultimately involved. If you have interest in exploring your firm’s true potential in the 8(a) Business Development Program, I always recommend contacting an industry expert such as ez8a or Advance 8a. Neither charge for an initial consultation.