One of the most valuable attributes of an individual and a business is honesty. No one likes being lied to or taken advantage of. Here at Holomua we pride ourselves in being honest and straightforward. To that end, we felt it was important to put together a candid blog post about the SBA 8(a) program. The 8(a) program is not for every business. Hopefully, our honesty will help you determine if the program is right for you.
TRUTH: The 8(a) application is not something that a business should jump into. It is also not something you can do in one sitting. It is a process that involves fully understanding the program regulations and eligibility requirements, and then putting together a comprehensive application package. This means gathering personal, financial and business information and documentation. It also may mean preparing narratives and other documents. Moreover, it involves communicating with the SBA when they have questions about the application and meeting their often short deadlines.
Simply put, you need to be prepared before applying for the program. Not only should you understand what the program is and determine if it’s a right fit (i.e. does the Federal government procure your product or service using the 8(a) contract vehicle), but you should also know what the application process entails and be ready to devote the time and resources to see it through.
MYTH: After my business is 8(a) certified, I can do whatever I want. It’s my business.
TRUTH: Upon acceptance, all 8(a) participants are required to sign a participation agreement. By signing this agreement, you agree to comply with all 8(a) program regulations. For example, 8(a) participants must get approval from SBA for all ownership, management, business structure and name changes. Additionally, it means every year that a business is in the 9-year program it will go through an annual review process (that looks a little like the application process) and demonstrates that the business is still eligible for the program. In short, even though you own your business, after getting into the 8(a) program, you give up some of your ability to make changes and decisions as you please because you must comply with program regulations. Failure to comply with program regulations could result in severe consequences, including probation or program termination. These consequences are real and we have seen businesses suffer as a result.
MYTH: Once my business gets into the 8(a) program, we will be guaranteed contracts.
TRUTH: As an 8(a) participant, you are not guaranteed anything. If you want contracts, you have to work for it. Too often we hear businesses have an unrealistic expectation that contracts will fall into their laps if they are in the 8(a) program. Businesses that are committed to building a strong performance record, establishing and fostering relationships with customers and partners, having a business development strategy, and actively pursuing development and training opportunities with SBA are the businesses that succeed. If you are not willing or able to do this, you should really take a step back and decide if the 8(a) program is for you. As alluded to above, the 8(a) program is cumbersome and time consuming, both during the application process and after, so make sure you are ready for that commitment. There are huge benefits and opportunities for 8(a) participants, but be ready to work hard for it.
Do you need help as you explore the 8(a) program and consider our thoughts on the program? If so, contact us at (808) 369-9710 or via e-mail at email@example.com. You can also schedule a free initial consultation at http://www.holomuaconsulting.com/initial-consultations.html.