When and How to Register Your Business as a “Small Business”
by Caron_Beesley, Community Moderator
- Created: August 1, 2012, 7:34 am
- Updated: September 24, 2013, 11:55 am
Own a small business? Perhaps you’ve heard about small business certification, but do you actually need to certify your business as small?
For most small businesses, the answer is no.
But if you want to take advantage of business opportunities such as selling to the government (a.k.a. “government contracting”), then you have to obtain some form of certification. Why? The federal government sets aside a variety of contracts for competition among small businesses, women-owned small businesses, service-disabled veteran-owned small businesses, and disadvantaged small businesses. To qualify for these “set-asides,” certification is a must.
So how do you go about certifying your small business to qualify to compete for the nearly $100 billion worth of goods and services that Uncle Sam buys from small businesses each year? Read on.
Does Your Business Qualify as a Small Business?
Your business isn’t small just because you think it is. The government maintains “size standards” that define the maximum size that a company (and its affiliates) can be to qualify as a small business.
A size standard, which is stated in either the number of employees or average annual receipts, represents the largest size that a business (including its subsidiaries and affiliates) may be to remain classified as a small business by SBA. Generally, most manufacturing companies with 500 employees or fewer and most non-manufacturing businesses with average annual receipts under $7 million will qualify as a small business. However, there are exceptions by industry. They’re listed here: Summary of Size Standards by Industry.
To help you assess whether you fall into the SBA’s definition of small business, check out SBA’s table of small business size standards.
These size standards also apply to service-disabled veteran-owned small businesses, women-owned small business and small disadvantaged businesses (such as Native Americans). However, it’s important to note that these businesses must also meet specific eligibility criteria in order to compete for exclusive government contracts that are set aside for these groups. Read more about these set-aside programs and eligibility requirements here:
- Service-Disabled Veteran-Owned Small Business Concerns
- Women-Owned Small Business Federal Contracting Program
- 8(a) Business Development Program for Disadvantaged Businesses (this blog also does a great job of explaining how to get certified for this program: 8(a) Certification & Minority Business Certification—How Does a Business Get Certified?)
Certifying Your Small Business
Now that you’ve figured out whether you qualify as a small business, you can get registered as a government contractor. This is a fairly simple process and involves applying for a D-U-N-S number and registering in the government’s System of Award Management (SAM) (SAM replaced what was formerly known as the Central Contractor Registration (CCR) database on July 29, 2012). SAM is a repository of all businesses that sell – or want to sell – to the government. Read more about this process here.
Certifying as a Disadvantaged, Women- or Veteran-Owned Business
Businesses that qualify for government contracting programs and contracts under these categories follow the same certification process as small businesses described above. When you register your business in SAM, you can self-identify yourself as belonging to one of these groups.
Other Government Contracting Set-Aside Programs to Know About
In addition to offering set-asides to disadvantaged businesses as well as service-disabled veteran- and women-owned businesses, the federal government also has programs that help small businesses in urban and rural communities compete for government business. One of these programs, known as HUBZone, has its own certification process. If you think this might benefit your business, read more about it here: HUBZone Certification—How Does a Business Get Certified?
For more information on how to sell your products or services to the government, visit the Government Contracting Guide and take advantage of the online courses in the SBA Government Contracting Classroom.
- Women Business Owners – How to Win Your Share of Government Business
- Successful Government Marketing – A Primer for Small Business
- From Service to Business – Essential Tools and Programs for Veteran Entrepreneurs
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