Before you can begin business with the government, your business must obtain the proper certifications. Small business certifications are like professional certifications, they document a special capability or status that will help you compete in the marketplace. Unlike permits and licenses, you do not need to obtain certifications to legally operate. However, in order to take advantage of business opportunities, such as government contracts, you may need to obtain some certifications.
Federal, state and local governments offer business opportunities to sell billions of dollars with of products and services. Many government agencies require that some percentage of the procurements be set aside for small businesses. Having your business certified can definitely aid in you successfully competing for government contracts.
Benefits of a Small Business Certification:
- The ability to bid on small business set-aside solicitations
- 23% of all federal contracts are mandated to be awarded to small businesses
- It puts you in the running for “no-bid” contracts valued under $25,000
As part of the registration process, you will be required to enter information about your company in the System for Award Management (SAM) database. In SAM, you may self-certify yourself as a small business, but you must meet the federal governments definition of a small business
The U.S. Small Business Administration defines a “small business” in terms of the number of employees over the past year or average annual receipts over the past three years. Size standards vary by industry
- Must be considered a small business by SBA standards
- Must have listed the proper NAICS codes in SAM Registration
- Must not surpass average annual revenue based on NAICS codes
- Must not surpass number of employees based on NAICS codes