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Crowdfunding Sites: Top 3 Tips to Get Funding Once and For All

By Marco Carbajo, Guest Blogger
Published: April 9, 2014

The internet has fundamentally changed the way we do business on a national and global scale. With over 2 billion internet users and growing, the speed and the way in which we communicate, share ideas, and even invest in businesses have changed forever.

Now anyone with a computer or mobile device and an internet connection can research, review and become an investor in a business with a push of a button. With the growing popularity of crowdfunding sites, it's clear the idea of advertising to the general public through a crowdfunding platform is far more effective at drawing in investors as opposed to finding traditional investors the old fashion way.

To put it bluntly, crowdfunding empowers entrepreneurs.

It offers them the ability to raise capital without giving up equity or accumulating debt. Instead, these rewards-based crowdfunding platforms allow entrepreneurs to raise capital from the public in exchange for tangible products or other relative rewards.

It’s simply one of the best ways to cast a huge net for attracting investors to a business. However, with all the hype and popularity buzzing around the internet, many entrepreneurial hopefuls need to be aware that just because launching a crowdfunding campaign is simple doesn’t mean it’s easy.

There is a big misconception on what it really takes to reach a funding goal and achieve success in crowdfunding. It’s not as simple as creating a campaign and clicking the submit button and waiting for an idea to go viral. The set it and forget it attitude is the number one reason why crowdfunding campaigns fail.

Did you know of the roughly 60,000 unsuccessful crowdfunding campaigns launched, about 40,000 failed to reach even 20% of their funding goal? The good news is you can succeed in crowdfunding, you just need to know how to prepare for it.

Here are three key tips for crowdfunding success:

1) Perfect Your Pitch – An incredible pitch is crucial for crowdfunding and can make or break landing an investor. People have to be sold on you, your idea and your vision before they will ever invest in your business.

For starters, write up your preliminary draft, include pictures and record a video explaining your vision, the offer and why you should get business funding. Let your passion shine through!

Send your pitch to family and friends so you can get feedback and make any necessary changes. Once you perfected the pitch, start locating initial backers before launching your campaign.

Remember, you don’t have to swim with the sharks; in crowdfunding, you get to swim with the goldfish.

2) Test Your Rewards – Every successful campaign started with a dedicated following. The obvious rewards would be to provide backers with a digital copy, physical product, souvenirs, combined rewards, etc. depending on your business idea.

Start by testing your reward ideas with your personal network, make necessary adjustments and perfect your rewards package so it is unique, eye-catching and memorable.

3) Get Pre-Pledges – Pre-pledges are commitments from those people who fully support your business idea and will be there to invest on day one when you launch your campaign. Since the majority of crowdfunding sites provide a 30-90 day time frame for each campaign, it’s vital to launch with momentum.

Did you know the most successful crowdfunding campaigns had their campaigns go live only after they had 20-30% of their business funding secured by initial backers? Let's face it; nobody wants to be the first person to fund money into a newcomer's campaign.

Once you perfect the pitch, test your rewards, get pre-pledges and choose a reputable crowdfunding platform, you will need to establish a marketing strategy to reach your target audience so you can advance the momentum of your campaign once you go live.

Crowdfunding sites are a strong stepping-stone for acquiring investors for a business. While for some it can be a viable option, entrepreneurs do need to conduct their due diligence to decide if this business funding option is best for them.

About the Author:

Marco Carbajo
Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

What to Know About Small Business Investment Companies (SBICs)

By kmurray, Contributor and Moderator
Published: April 9, 2014 Updated: April 9, 2014

When it comes to financing, you probably already know that SBA doesn’t lend money directly to small business owners and entrepreneurs, but has various programs to help get small business ventures financed through local lenders. But did you also know that the Small Business Investment Company (SBIC) Program has been helping small business access capital for more than fifty years?

 

What’s the SBIC Program?

The Small Business Investment Company (SBIC) Program is a multi-billion dollar program that, in fiscal year 2013 alone, invested $3.5 billion in financing dollars to small businesses! So how does it work?

SBICs are privately owned and managed investment funds. They’re licensed and regulated by SBA and use their own capital plus funds – borrowed with an SBA guarantee – to make equity and debt investments in qualifying small businesses.

The SBA doesn’t invest directly into small business through the SBIC Program, but provides funding to qualified investment management firms that are experts in certain sectors or industries. For every $1 an SBIC raises from a private investor, the SBA will typically provide $2 of debt capital (with a cap of $150 million). Here’s a look at how it works:

SBIC flow chart depicts private investor funds and SBA funds funneling into SBICs funneling into small businesses

Firms combine their own capital with funds borrowed from the federal government at low rates. In turn, they invest these funds in promising new ventures. And it’s all done with zero taxpayer dollars!

 

What are the benefits of the SBIC Program?

There are benefits for the SBICs and the small business recipients!

Small businesses that qualify for assistance from the SBIC program can receive equity capital, long-term loans and expert management assistance. SBICs benefit small business owners by opening up greater access to equity capital and expert guidance they may not otherwise get through traditional venture capitalists.

Investment managers participating in the SBIC program can add to their own private investment capital with funds borrowed at favorable rates through the federal government.

And ultimately, the national economy benefits from the SBIC program as the small businesses financed by SBICs continue to create jobs and generate tax revenues over the program’s life.

 

Want to learn more about the SBIC Program? Visit the SBIC Program pages, including the FAQ. Still have questions? Email askSBIC@sba.gov.

About the Author:

kmurray
Katie Murray

Contributor and Moderator

I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Thanks for joining our online community here at SBA.gov!

To request a copy of the archived documents listed below, please contact the Office of Advocacy via email at advocacy@sba.gov.

February 12, 2003 - Final rule, National Pollutant Discharge Elimination System Permit Regulation and Effluent Limitations Guidelines and Standards for Concentrated Animal Feeding Operations published in the Federal Register.

 

To request a copy of the archived documents listed below, please contact the Office of Advocacy via email at advocacy@sba.gov.

February 10, 2000 - Final rule, Control of Air Pollution From New Motor Vehicles; Tier 2 Motor Vehicle Emission Standards and Gasoline Sulphur Control Requirements; Diesel Fuel Quality Controls, published in the Federal Register.

 

How to Use Business Books To Grow Yourself, Your Team, Your Business

By smallbiztrends, Guest Blogger
Published: April 3, 2014

Business books are valuable in that they do more than simply teach you how to run your business more smartly. They’re conversation starters, continuing education tools for your staff and more.

 

Educate Yourself

 

The primary benefit of business books is, naturally, that they help you achieve better results in business. Don’t know a thing about social media marketing? Pick up a book and teach yourself. Curious about the latest leadership technique? A book can help you with that too.

 

Books only help if you commit to reading them. You’re busy. We all are. But if you set a goal for yourself to leverage the knowledge inside books, you end up a smarter business owner.

 

It’s not necessary to fly across country or spend lots of money on expensive conferences to glean information from business experts. Instead, budget about $150 a year to buy a book each month on Kindle and get all that knowledge (probably more) from the convenience of your favorite easy chair. Don’t have a budget for books? Then don’t forget your local library. Many even offer digital books these days.

 

Share Your Knowledge

 

If you blog for your business, books provide great subject fodder. Writing about what you learn is also a wonderful way to process that information and really understand it. As you read, take notes or bookmark pages (yes, you can digitally bookmark as well) so you can come back to pull quotes for your content.

 

As you continue to master your industry as an expert, you’ll end up imparting what you’ve learned. So that book knowledge can be translated into content for speaking engagements, webinars, social media updates ... even data for your own authored book!

 

Give It as a Gift

 

Business books also make fantastic business presents. When you run across a great book, buy copies for key members of your team who you think would benefit and give the books as gifts to each. You could even start a mini book club within your organization and discuss the principles in a book. Not only does this make your team smarter, but it also helps you bond.

 

Clients appreciate good books too. Send a book you've read to a favorite client along with a note about what you've enjoyed in it (e.g., "I especially loved Chapter 7!")  Doing so will build relationships with your clients, and they will appreciate your ongoing investment in your business expertise.

 

Pay attention when talking to clients or contacts to get clues about what topics they’re interested in. For example, if a long-time client mentions he struggles with analytics, that’s the perfect cue for you to send him your favorite book on the subject. People notice when you pick up on their interests, and it makes for a more personalized gift.

 

Thirst for More

 

There will never, ever be a shortage of books. Every day, new ones are published, especially with the surge of self-published authors. It can be a challenge to know which ones are worth reading, and which aren’t. At the next Chamber of Commerce meeting or industry mixer you attend, ask others if they've read any good business books recently. Get recommendations from friends and colleagues. Ask your social network what to read. Join GoodReads and see what your friends are reading.  And check out the Small Business Book Awards to see what the community believes are top books for entrepreneurs and small business people.

 

Make time for reading business books, just like you make time for marketing, sales, and other components of your business. While the results may not be directly obvious, books do help you succeed as a business owner.

About the Author:

smallbiztrends
Anita Campbell

Guest Blogger

My name is Anita Campbell. I run online communities and information websites reaching over 6 million small business owners, stakeholders and entrepreneurs annually, including Small Business Trends, a daily publication about small business issues, and BizSugar.com, a small business social media site.

Local Resources Explained – Women’s Business Centers, Export Centers, Veteran Business Outreach Centers, Procurement Technical Assistance Centers

By kmurray, Contributor and Moderator
Published: April 2, 2014 Updated: September 22, 2016

You know from our blog post SBA, SCORE, and SBDCs Explained – 3 Essential Local Resources for Small Business Owners that there are a number of resources available to help your business succeed.

There are also a few resources available to specific small-business audiences such as women, veterans and those interested in guidance about exporting or government contracting.

1. Women’s Business Centers (WBCs)

Women's Business Centers (WBCs) provide counseling, training and networking opportunities for women across the United States and its territories. With a network of nearly 100 educational centers, women around the country can receive tailored assistance to help them start and grow their small businesses. WBCs seek to "level the playing field" for women entrepreneurs, who still face unique obstacles in the business world.

Offerings vary by location, but you can expect to come into a WBC and get help with questions about developing a business plan; financing and funding sources; certifying your business; bookkeeping; and more.

SBA’s Office of Women’s Business Ownership (OWBO) oversees the WBC network, which provides entrepreneurs (especially women who are economically or socially disadvantaged) comprehensive training and counseling on a variety of topics – and in several languages.

2. Export Assistance Centers

Export Assistance Centers are customized for small business owners and entrepreneurs interested in taking their business global. There are a number of unique challenges you’ll face in the business of exporting, but rest assured that there’s help tailored for your needs!

Staffed with professionals from SBA, Department of Commerce, Export-Import Bank and other public and private organizations, Export Assistance Centers can help you with a variety of topics:

  • Trade Counseling: planning and strategy; legal and regulatory issues; documentation and product requirements; trade problems; trade finance and insurance
  • Business Matchmaking: contact lists and identifying potential partners; trade missions; trade shows; in-country promotions
  • Market Intelligence: country and industry reports; customized market research; background reports; trade data and analysis; commercial diplomacy

Some Export Assistance Centers even have SBA representatives who are available to help you with all of your SBA export financing needs.

3. Veteran Business Outreach Centers (VBOCs)

If you’re a veteran interested in entering the business world from the military word, then consider the services available from your local Veterans Business Outreach Center. One of sixteen centers available can assist you with business topics that are unique to you and questions you may have as you enter into your business ventures. So, what can you expect?

  • Pre-Business Plan Workshops: You’ll have the chance to work directly with a business counselor during entrepreneurial development workshops.
  • Concept Assessments: You’ll get help gauging your entrepreneurial needs and requirements.
  • Business Plan Preparations: Important to all business owners is a business plan, so you’ll get help developing and maintaining a business plan.
  • Comprehensive Feasibility Analysis: Following the preparation of your business plan, a VBOC will help you identify and analyze its strengths and weaknesses. You’ll use the analysis results to revise the strategic planning portion of the business plan, with the ultimate goal being to increase the likelihood of success.
  • Entrepreneurial Training and Counseling: Working with other SBA resource partners, VBOCs conduct entrepreneurial training and counseling sessions specifically for service-disabled veteran entrepreneurs.
  • Mentorship: When needed, VBOCs conduct on-site visits to ensure you’re following your business plan. Additionally, VBOCs review monthly financial statements to determine if you should change your business plan to achieve targeted goals.
  • Other Business Developmental Related Services: VBOCs also provide assistance and training in topics such as exporting, franchising, marketing, accounting and more.

As you can see, these extensive services can go a long way to help you on your way to success with a career in small-business ownership. Another great benefit of visiting a VBOC is the chance to meet other entrepreneurs like yourself – the opportunity to network and exchange experiences with folks going down a similar path can also be tremendously valuable.

4. Procurement Technical Assistance Centers (PTACs)

If you’d like to go into business with some of the biggest customers around – the government – then you’ll probably benefit greatly from visiting a Procurement Technical Assistance Center. They provide local, in-person counseling and training services (either for free or at a nominal cost) to enable you to succeed with government contracting. Here are some questions you can expect to answer when you visit a PTAC:

  • Is my business ready for government contracting? It’s not the simplest task to pursue government contracts, and can be especially challenging for your company if you don’t have the resources to handle a contract. A PTAC representative can sit with you one-on-one and determine if your business is ready, and help position you for success.
  • Where do I register? There are numerous databases to register with to get involved with the government marketplace, including the Department of Defense’s Central Contractor Registration (CCR), GSA Schedules, and other government vendor sites. A PTAC representative can help you determine where and how to register.
  • Is my business eligible for any small business certifications? Did you know that some government contracts are set aside for businesses with special certifications? Examples include woman-owned, small disadvantaged businesses and HUBZone businesses. A PTAC representative can help you obtain these certifications if you’re eligible.
  • What about contract opportunities? A PTAC representative can look into past contracts to see what types of contracts have been awarded to businesses like yours. This will give you a good idea about the overall business landscape and potential competition. A PTAC can also help you identify and bid on a contract, and if you are awarded the contract, measure your performance and help with contract audits.

So regardless of who you are and what kind of business you’re starting – or the type of business you’d like to do – SBA and its resources partners are here to guide you along the way. You don’t have to go it alone. These and others are available to help you start up, succeed and grow

About the Author:

kmurray
Katie Murray

Contributor and Moderator

I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Thanks for joining our online community here at SBA.gov!

How to Work With Freelance Designers

By Rieva Lesonsky, Guest Blogger
Published: April 1, 2014 Updated: April 1, 2014

Small business owners often outsource to freelance designers to create their logos, marketing materials and more. While using online services where hundreds of designers bid on your project at the lowest possible price can have its place, there are times when you need an ongoing, personal relationship with a designer—someone you can work with over and over again and count on to deliver every time.

How can you develop this kind of working relationship? Here are some tips.

Start by choosing your designer wisely. Your local chamber of commerce, personal and business connections, other small business owners and social media networks are good places to look for designers. If you see a small business with a marketing piece, ad or signage that really stands out to you, contact the business owner and ask where he or she had it done. Good designers will have professional websites where you can check out their portfolios to see whether they’ve done projects similar to yours. Ideally, you want to look for a designer who is not only familiar with current design trends, but also has some experience in your industry and working with small businesses.

Make a shortlist of several options and contact them for more information about their services. Find out:

·         How does the designer charge? Some designers charge by the hour, others on a per-project basis. If the designer uses a standard contract, ask to see it. Check out factors such as how many revisions are included in the price, whether you will own all rights to the finished product (very important if the designer is creating your logo), and whether the designer charges a percentage of the fee even if you aren’t satisfied with the work.

·         Who will be working on your projects? Is this a one-person shop or does the designer have partners or employees? You might be impressed with one designer’s skills, only to find out a much junior person will be working on your projects. Does the designer outsource to other designers? This isn’t necessarily bad, but if the designer is outsourcing to the same type of online design services you were trying to avoid, there’s not much point to hiring him or her.

·         What other companies does the designer work for? Asking about clients will give you an idea not only of whether the designers is conversant with your industry, but also where you may fall in the pecking order. If a designer has lots of big clients, the reality is you may find your projects falling to the bottom of their priority list. Be sure to address this concern honestly.

·         Where is he or she located? Today, it’s possible to work well with designers across the country or even across the globe. However, communicating about design issues can be difficult for small business owners. It’s often easier to discuss visual issues in person, and if this is the case for you, you’ll want to choose a local designer who can come by your office.

Once you’ve selected the designer, keep the relationship happy and successful by:

·         Clearly communicating what you want. Find examples of the type of design you like and explain what you like about them—is it the color? The use of type faces? The graphics or photos?

·         Being open to suggestions. You hired a designer for his or her expertise, so use it. You don't have to accept designs you hate, but do give the designer a chance to explain the reason behind the design. Perhaps he or she will change your mind.

·         Limiting your requests for revisions. There’s nothing a designer hates more than umpteen emails asking to change this, that and the other. It’s OK to have a lot of input into the design, but instead of sharing every thought as it pops into your head, take some time to review the work, think about it and discuss all the changes you’d like at one time.

·         Setting clear expectations and deadlines. As with any working relationship, be sure you are clear about your standards. Using project management and scheduling tools like Zoho, Trello or Google Drive is a great way to ensure you have the latest versions of files all in one place so everyone can look at them and share their input.

About the Author:

Rieva Lesonsky
Rieva Lesonsky

Guest Blogger

Rieva Lesonsky is CEO and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rieva and visit SmallBizDaily.com to sign up for her free TrendCast reports. She's been covering small business and entrepreneurial issues for more than 30 years, is the author of several books about entrepreneurship and was the editorial director of Entrepreneur magazine for over two decades

SBA's Disaster Loan Program Explained

By kmurray, Contributor and Moderator
Published: March 31, 2014 Updated: April 1, 2014

Did you know that in the wake of a disaster, SBA provides low-interest disaster loans to homeowners, renters, businesses of all sizes and private, nonprofit organizations? In the aftermath of hurricanes, floods, earthquakes, wildfires, tornadoes and other disasters, SBA is the primary source of money from the federal government for long-term recovery assistance.

Am I eligible?

SBA’s Disaster Loan Program is not exclusively for small businesses. These low-interest, long-term loans are available for damage to private property owned by individuals, families, businesses of all sizes and private nonprofits not fully covered by insurance.

While property owners usually have some insurance coverage, often it does not cover all losses or even the type of hazard that caused the damage. And that’s where a disaster loan comes into play.

What can I use the loan for?

There are actually a few different types of disaster loans available. SBA can provide up to $2 million in disaster assistance for businesses.  This includes loans to cover physical damage and economic injury losses. Some applicants will qualify for both an economic injury loan and a physical disaster loan.  Meanwhile, the dollar limit for the combined loans is $2 million.

Physical damage is probably what you think of first when it comes to a disaster – the more tangible damages done during a disaster. Businesses and nonprofit organizations of all sizes can apply. A physical disaster loan can address losses not fully covered by insurance and can go toward repairing or replacing:

  • Real property
  • Machinery
  • Equipment
  • Fixtures
  • Inventory
  • Leasehold improvements

Economic injury means that because of a disaster, you’re unable to meet your business obligations and pay ordinary and necessary operating expenses. So, an economic injury disaster loan (or EIDL) provides the necessary working capital (of up to $2 million) to help your small business or private nonprofit organization survive until normal operations resume after a disaster.

Renters can also apply for disaster loans of up to $40,000 to repair or replace their disaster damaged personal property (like furniture, rugs, clothing, appliances—anything damaged by the disaster).  Homeowners may borrow up to $200,000 to repair or replace disaster damaged real estate, plus an additional $40,000 to cover personal property losses.

How does the process work?

  • After a presidential disaster declaration, first register with FEMA. In most cases, you'll be referred to SBA for possible loan assistance. Then you should apply online, which is the fastest way to receive a decision about your loan eligibility.
  • Your loan processing is next. SBA will conduct a credit check and an onsite inspection to determine your losses. A loan officer will work with you to approve or decline a loan.
  • Generally, within five days of signing SBA’s loan closing documents, your first disbursement is made. A case manager will work with you to meet all your loan conditions and schedule the rest of your disbursements until you receive the full loan amount.

So when disaster strikes, remember that SBA is here to help. Check out this short video to learn more about how, and get more details here about the disaster assistance program.

About the Author:

kmurray
Katie Murray

Contributor and Moderator

I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Thanks for joining our online community here at SBA.gov!

Growing Importance of Business Plan Competitions

By Tim Berry, Guest Blogger
Published: March 26, 2014

Are you aware of business plan competitions? If you’re an entrepreneur, they’re an excellent opportunity to present your business and compete for cash and in-kind prizes or, worst case, really good feedback from serious business people. If you’re lucky enough to be invited to judge, it’s a chance to spend a few days reviewing real-world startups.

I’ve been judging business plan competitions for almost 20 years. As I write this I’m looking forward to another season judging venture competitions including the University of Texas’ Venture Labs Investment Competition, the Rice University Business Plan Competition, and the University of Oregon New Venture Championship. Each of these three events pit grad-level business students from all over the world against each other as they compete for cash and in-kind prizes. They submit business plans, do business pitches and answer detailed questions.

I find judging these competitions fun, interesting and for me a great way to keep up with the evolution of high-level startups, business planning and entrepreneurship education.

The University of Texas started this, as far as I know, with the first “Moot Corp” in 1984. Moot Corp became Venture Labs Competition three years ago. It’s the oldest and possibly most prestigious – although Rice University is a serious rival. All of its entrants have won other business plan competitions to get to that one.

The Rice University contest is the richest. Recent winners have won cash prizes of hundreds of thousands of dollars and total prizes of more than $1 million including in-kind services (like free rent, consulting, legal work, etc.)

I’ve been judging the University of Oregon competition since 1997. I’ll never forget arriving on a Thursday morning to discover, to my horror, that I’d committed myself to all day Thursday, Friday and Saturday. My horror changed to real interest as the teams began their pitches. By Saturday I had enjoyed it so much I made sure to stay on the list for the future years. And I’ve missed only one year since then.

One obvious change I’ve seen in this area is the tremendous growth in the number of contests, the interest in contests, the prize money and the seriousness of the startups that enter.

The most important change is an amazing increase in the viability of the competing startups. The early Moot Corps were almost entirely hypothetical business plans developed by students as academic exercises. Nowadays most of the entrants in the major business plan competitions are real companies with real prospects. Of the three I judge, a clear majority of the startups that enter will eventually get financed and launch. Both Rice and Texas track angel investments and venture capital financing landed by former contestants in the hundreds of millions of dollars. Winners almost always have viable products, believable management teams, and credible growth prospects.

Another change is the length, style and content of the business plans submitted. Today’s business plans are much shorter than they used to be, as page limits have gone from 30-40 to 10-20. Judges have to read plans and they want shorter, sharper and more summarized. And – sadly, in my opinion – financial projections seem to be less rigorous.

Another development is that because of the continuing increase in interest, there is now a good website dedicated entirely to listing competitions, at www.bizplancompetitions.com. You’ll be amazed at how many events they list. And I hope you find one you can attend, enter or judge. If you have any interest in startups, it’s a great experience.

About the Author:

Tim Berry
Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 46 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including his latest, 'Lean Business Planning,' 2015, Motivational Press. Contents of that book are available for web browsing free at leanplan.com .

SBA’s 8(a) Certification Program Explained

By kmurray, Contributor and Moderator
Published: March 26, 2014 Updated: September 2, 2016

Did you know that the SBA has a program designed to help small, disadvantaged businesses compete in the federal marketplace? If you’re interested in government contracting, the 8(a) Business Development (BD) Program offers a broad scope of assistance to small businesses for which you might be eligible.  

The 8(a) BD Program has been essential for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. Ultimately, the program helps thousands of aspiring entrepreneurs to gain a foothold in government contracting.

Am I eligible?

Generally, to be approved into the 8(a) BD program and become certified, your small business must be owned and controlled at least 51% by socially and economically disadvantaged individuals who are American citizens.

You should also be able to demonstrate potential for business success and possess good character. You can read more details about eligibility requirements by visiting this page on our site.

What are the benefits?

So, how can the program help you? Once certified, you can take advantage of specialized business training, counseling, marketing assistance and high-level executive development provided by the SBA and our resource partners. You may also be eligible for assistance in obtaining access to surplus government property and supplies, SBA-guaranteed loans, and bonding assistance for being involved in the program. You can receive sole-source contracts (up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing). While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages you to participate in competitive acquisitions.

8(a) businesses can also receive sole-source contracts (up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing). While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages you to participate in competitive acquisitions.

In addition, 8(a) businesses can form joint ventures and teams to bid on contracts. This enhances your ability to successfully compete for and perform larger prime contracts. You can also participate in the 8(a) BD Mentor-Protégé Program which allows companies to learn the ropes from other more experienced businesses.

What else should I know?

Participation in the 8(a) BD Program is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage; the overall goal of which is to graduate 8(a) businesses that will go on to thrive in a competitive business environment.

While participating in the program, you’ll have to maintain a balance between your commercial and government business. There’s also a $100 million (or five times the value of your primary NAICS code) limit on the total dollar value of sole-source contracts that you can receive while in the program.

To make sure you stay on track to accomplish goals and follow requirements, the SBA district offices monitor and measure the progress of participants through annual reviews, business planning and systematic evaluations.

 

Related Resources

About the Author:

kmurray
Katie Murray

Contributor and Moderator

I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Thanks for joining our online community here at SBA.gov!

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