There are some simple, incontrovertible truths that can very much help you, the small business entrepreneur, formulate your overall 8(a) strategy. I am going to do this in quiz form to not only make this more interactive for you, but also to emphasize not only some common misconceptions that people have, but also how things can and do go wrong when folks are asleep at the wheel. Play along….
Answer B – I receive several calls per year from firms that did not obtain any business from their 8(a) Certification. Therefore it’s important that a firm going into the SBA 8(a) BD Program take full advantage of the potential that exists within it. The average 8(a) firm has sales of between $6-8 million per year, however some firms never get off the ground. This is why it is important that 8(a) firms develop a marketing plan early in their firms 8(a) nine-year duration.
Answer C – Generally it takes an 8(a) firm around five years to reach peak sales. After that point 8(a) firms in many cases are more focused on renewing and replacing their existing federal business.
Answer E – Firms that work in a construction specialty generally have a harder time obtaining sales than a General Contractor. This is because selling to the government is a relationship based business and therefore HVAC, Roofing or Plumbing work gets delved out by the General Contractor the procurement officer already has the relationship with.
Answer D – Information Technology is the largest industry for 8(a) firms making up approximately 30-40% of annual sales. General Contracting is the second largest industry with around 25% of 8(a) annual sales.
Answer A – 80% of all Federal Construction spending occurs with the DoD. The majority of this spending is for expansion and upkeep of military bases. Therefore 8(a) Construction firms do well all throughout the United States.
Hopefully these simple truths regarding the SBA’s 8(a) BD Program expand your knowledge, helping your small business in working to develop your overall 8(a) Strategy. If you have more specific questions as to your firm’s 8(a) Certification eligibility and potential, I always recommend contacting an industry expert such as ez8a or Advance 8a. Neither charge for an initial consultation.
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