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Minority Business Certifications Suffer from Complex, Expensive Process

Only about 6,000 American firms participate in the SBA’s 8(a) Business Development Program, one of the most lucrative initiatives every undertaken on behalf of business owned by individuals who are at an economic and social disadvantage. That number could be much larger, especially with the SBA encouraging women-owned businesses to enter the Program, but the process to become certified as an 8(a)BD firm remains costly, complex and very time-consuming.

A recent poll by EZCertify.com found the following reasons for the lack of broader participation in the Program:

Most people who likely would be eligible don’t even know that the 8(a)BD Program exists.

Many think, or have been told, that the Program certification process is far too difficult to bother with.

The process is considered far too costly, in terms of time and money.

There is the misconception that the 8(a)BD Program is being phased out.

There is another misconception that there is no contract work to be gained through the program.

Many think that they could not meet the SBA’s demanding criteria for certification.

Once many potential program participants receive a certification package, they find that the guidance is too general to be of real use.

Many don’t understand the Federal government marketplace or recognize the benefits of doing business with the government.

Some think that the complex requirements of selling products or services to the government outweigh the benefits.

Few know that many large, successful firms got their start through the 8(a)BD Program.

Others believe that there are no effective exit strategies from the program once eligibility is terminated.

One minority entrepreneur interviewed for the poll said, "I’ve looked at the 8(a)BD application package, and it’s very unclear as to what the SBA really wants. My business advisor told me that he’d prepare the package for me, but it would cost me $10,000 plus – and I’d still have to put in a month or more of my own time away from my business to get the information he’ll need. To make that kind of investment, I need a very high degree of assurance that I’ll be certified, but my lawyer said we’ll have to go through the entire process and then just wait to see if I get certified."

"That’s too much time and too much money to invest in a process that is so uncertain, especially since I've heard that 70 percent of the companies that apply for certification are rejected," he said.

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