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Making Sense of Business Certification Program Requirements

Preparing for the small business certification process

Business certification can be a powerful tool on the road to establishing a successful company. There are many different types of certification programs available to small business owners, each with their own set of specific requirements. Some certification programs have personal net worth maximum requirements while other certification programs require that the owner be a United States citizen. Some of the most popular certifications are the 8a certification program and third-party certifications. Understanding the different requirements of each business certification is the key to selecting the right certification to apply for.

Federal Certification Program

The 8(a) certification program has an extensive list of requirements; however, there are four key requirements every small business owner must meet in order to qualify. First, the majority owner of the business seeking certification must be an American citizen. Second, the majority owner must be economically and socially disadvantaged. The applicant owner must have a personal net worth below their maximum requirement.

Third, the majority owner must control and manage the business on an everyday basis. They require that the economically and socially disadvantaged business owner hold the highest position and receive the highest salary. In addition, they review your resume to ensure that you have the requisite experience to lead the company. For example, if the majority owner has only been working in the industry for one year while the Vice-President has been working in the industry for ten years, it will be more difficult to prove that the majority owner truly controls the business.

Fourth, the applicant business must demonstrate the potential for success. The agency will review the company’s tax returns and the company’s financial statements in order to evaluate the firm’s financial standing. They prefer you have a minimum of five to ten completed contracts and that you are not too dependent on any one client for the majority of your sales.

Third Party Certification Programs

Unlike the 8(a) certification, most third-party certification programs including the Women’s Business Enterprise National Council (WBENC) and the National Minority Supplier Development Council (NMSDC) do not have personal net worth requirements. Another key difference is that they do not require that the business be able to show potential for success. While they do require the company’s tax returns and financial statements, they are not looking for specific financial history and even accept start-ups.

While different from the 8(a) certification, third-party business certifications do share some similarities. Most third-party certifications are designed for minority-owned and women-owned businesses. To apply for third-party certification, the majority owner must have the highest title, earn the highest salary, and be able to demonstrate the experience to control the business on a day to day basis.

In addition to these certification programs, there are several other certifications available to small business owners including the Disadvantaged Business Enterprise (DBE), the Woman-Owned Small Business Certification (WOSB) and the Economically Disadvantaged Woman Business Small Business Certification (EDWOSB). Each of these business certifications has their own set of requirements that small business owners must understand.

Since applying for certifications can be an extremely time-consuming process, it is critical that small business owners understand the criteria for each specific certification to select the ones that they qualify for and provide the best opportunity for success.  Many small business owners fail to understand the requirements and waste precious time applying for certifications they do not qualify for. Companies that succeed in getting certified are those that made the effort to understand the requirements and selected the best fit for them.

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For more information regarding our services, please visit our Certification page or Contact Us at 407-857-9002.

Wanting more? Check out our prior blog Understanding the Benefits of Certifications where we further discuss the business certification process

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