More than just a useful tool to keep in the marketing toolbox, specialty certification through the U.S. Small Business Association (SBA) helps a construction business stand out among the competition and is well worth the time and effort.
With so many contractors and subcontractors to choose from across a wide range of trades, how does a builder decide who to hire for the next project? The obvious answer, in most cases, is the price. The best estimate often gets the job. But what about the times when bids are similar and there is no clear choice?
The reputation of the contractor is usually the next consideration. Word of mouth can certainly carry a business to success, but in this ever-widening world and saturated market it can feel like shouting into the void at times. To alleviate this problem, the SBA offers specific designations to highlight what makes a smaller company worthy of a second look. These exclusive certifications show clients right up front that a company holds itself to a higher standard. It also helps clients to make more informed decisions regarding where their spending power goes—some prefer to specifically support veterans, women or other disadvantaged groups.
Service-Disabled Veteran-Owned Small Business (SDVOSB) is one example of a certification granted by the SBA. Working in conjunction with the Veterans Administration (VA), the SBA grants this designation to small business owners with a disability acquired or worsened during active duty. The application process can be somewhat daunting so the VA assigns a trained counselor as a guide to navigate each step of verification and ensure compliance.
Proving eligibility includes providing access to preexisting financial documentation such as stock ownership and tax records. For the SDVOSB designation, veteran and disability statuses are evaluated by a verification body according to federal regulations. Fraudulent claims are taken seriously and carry a penalty, making it difficult for those trying to “game the system”—in other words, these designations truly are high-quality, properly earned credentials.
The most common certifications available through the SBA include:
- Socially/economically disadvantaged companies (8(a) Business Development) and companies located in underutilized areas (HUBZone);
- Veteran-Owned Small Business (VOSB);
- Women-Owned Small Business (WOSB) and Economically Disadvantaged Women-Owned Small Business (EDWOSB); and
- Leadership in Energy and Environmental Design (LEED), TRUE Zero Waste.
Another advantage of earning a certification is the ability to join the exclusive pool of contractors who qualify for government set-aside contracts. Federal, state and local governments prefer to award contracts to small businesses—in fact, it’s mandated that 23% of federal contracts go directly to small businesses—but the business must meet certain requirements to apply.
Requirements vary depending on the designation; however, a few criteria are the same across the board. The person who qualifies the business for certification must be a U.S. citizen, hold at least 51% direct control of the day-to-day operation of the company, and have a background free from federal debarment and suspension. Additionally, the company itself needs to be structured for-profit and needs to conduct the bulk of its business within the United States.
There are a few different ways to find the designations that are right for a business. Start by taking a closer look at competitive businesses in similar industries to see what designations they hold. Chances are good that a well-established company is going to advertise any certifications on its website; these are the certifications that are worth earning in that industry. Another way is to talk to owners and contractors and ask them what they look for in their subcontractors in terms of qualifications. Lastly, a search of the SBA website or a general Google search may yield some results.
Keeping a business afloat today is no easy task, so it’s important to grab every available opportunity to gain a competitive edge. While SBA-granted certifications are mainly provided as a means to level the playing field for smaller companies to get a piece of the government pie, holding a qualification such as SDVOSB will also increase marketability and credibility for deserving businesses.
