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Be careful who you hire to assist with your Certifications

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I recently gave a presentation to an organization called, Women’s Presidents Organization. They are a nationwide group consisting of various chapter throughout each state. Each group consists of successful Women entrepreneurs who have monthly meeting and discuss various topics on how to grow their businesses.

A few days ago, I received a phone call from one of the members whom I had the pleasure of meeting during the presentation. She told me that she recently hired a company in Florida prior to her meeting me.  She decided to hire this company and as time went on, she began to notice charges unrelated to the agreement she had signed with them. This prompted her to do some research on the representative she hired.

Unfortunately for her, she was notified that this individual has a prior record of being a sex offender. This information was shocking to her. Had she known of his criminal background, she would have never hired them. It is unclear what she will do, due to the contractual obligation she now has with them.

The moral of this article is to be certain the people you hire, are honest and transparent, therefore resulting in a good business relationship with positive results.

 

Paul Mazbanian CEO Small Business Community Consultants, Inc. www.sbclending.com (818)551-9400

Paul Mazbanian
CEO
Small Business Community Consultants, Inc.
www.sbclending.com
(818)551-9400

Metro’s DBE Certification

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As Business Owners, we always try to promote and brand ourselves to everyone we can. This includes but is not limited to, other business owners, family, friends etc. We get particularly excited when a close friend calls us for assistance. Three years ago, I met with a friend of mine who is a producer and video editor. I mentioned to him the advantages of becoming certified as a Minority Owned Business. I told him what I would tell any other business owner, regarding the benefits and advantages for Minority Owned Business and doing business with Federal, State and Local Agencies.

Although I frequently see this friend, he did not proceed with the certification immediately. Fast forward three years to 2015 and I receive a call from him letting me know of an opportunity coming up with Metro in September of this year. Of course I was excited for him and told him I would help. With 3 weeks from the due date of the proposal, I sincerely wanted to help my friend grow his business. I believe he already new the “I told you so” story, so I did not mention in it to him. My first advice to him was to focus on application and the gathering of the supporting documents so that we may submit the application as an expedited application to become approved as an SBE with Metro. Over the course of two weeks, we met multiple times to ensure the accuracy of the application. He still needed to complete the RFP and submit it by the due date, but since the RFP had a SBE Set aside, the application needed to get done first.

After submitting the completed Metro Application, my friend was approved within two weeks and the RFP was submitted on time. If he does indeed get this contract, it will significantly help his business grow over the next few years. In addition, it will give him notoriety working with Metro and also help him get future projects.

The reason I am writing this article is if my friend were to take my advice originally, he would not have to go through the stress of getting approved and complete the RFP within a two week time period. This put a significant strain on him because he needed the certification to bid on the project, we put in extra hours to get in submitted on time.

The typical time it takes Metro to approve a Business for DBE Certification or SBE Certification is roughly three months. However, Metro has an expedited application process, if the applicant needs to get certified for a specific bid coming up. This will significantly reduce the wait time for applicants, assuming all required documents are submitted in a timely manner, as was the case with my friend.

My recommendation to all businesses would be to identify your opportunities ahead of time and not be in a position of rushing. This is true for all certifications. Doing your research and forecasting which ones you will need will significantly help, once you come across a situation like the one above.

 

Paul Mazbanian CEO Small Business Community Consultants, Inc. www.sbclending.com

Paul Mazbanian
CEO
Small Business Community Consultants, Inc.
www.sbclending.com

Which Goverment Certifications to apply for first

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 Obtaining a Government Certification for your business can a confusing process. Which certifications to apply for and which ones would benefit you most?

You must first identify with whom you would like to do business with? Have you seen more bids with the Federal or State Governments? Your answer may be either one or both., If so, we recommend you apply for all, however this may be time consuming and although will help you in the long run, may not be an immediate priority.

Let’s assume for a moment that you would benefit from both the Federal and State Certifications. We recommend you apply for the easiest ones first, in order to get in to the game now. This will allow you to begin working on marketing your firm as a certified agency.

Below is a list of Certifications and their complexities:

Federal:

1. SBA’s Women Owned Small Business (WOSB): EASY

    The WOSB is one of the easiest certifications to obtain. This is because it is a designation rather than an actual certificate. Obtaining the WOSB Certification will allow you to bid on the 5% set-asides for those businesses designated as WOSB. The process is EASY because there is not physical application process. The requirements are that you register with the various Government sites and upload documents to the repository self-certifying your firm.

2. Women’s Business Enterprise (WBE): MEDIUM

   The WBE is a certification reserved for Women owned businesses only. It mimics the WOSB certification but is verified by one of 5 SBA approved agencies. This certification has a more complex process than the WOSB because it requires a full application and supporting documentation. Your information will go through a process with the agency and you wil be visited by a representative assuring your business indeed is what you represent. I typically advise our clients to obtain this certification if it is being required by a vendor. A physical certificate is issued to the applicant firm.

3. Minority Business Enterprise (MBE): MEDIUM

   The MBE is a national certification given by the National Minority Supplier Development Council. They are one of the nations leading corporate membership organizations. They match a firms goods and services with those of large corporations who intern purchase your product. Think of it as a club where members help each other by purchasing each others product. This certification includes an application and supporting documentation much like the WBE above.

4. SBA’s 8(a) Business Development Program: DIFFICULT

   The SBA 8(a) program is the most lucrative and most difficult to achieve. There are approximately 7,000 approved 8(a) firms in the country. 23% of all Federal Contracts MUST go to 8(a) certified firms. Secondly, an 8(a) certified firm is eligible for soul source awards which means that once they have built their reputation in the program they may get contracts without even bidding against other 8(a) certified firms. Thirdly, if certified and bidding against a non-8(a) certified firm, you will get a 5% bidding preference giving you an advantage over your competitive bidder. The process may take anywhere between 3-6 months depending on how much information is requested by the SBA. For those looking for the greatest benefit, the 8(a) certification allows you to grow your business significantly.

STATE:

1. Metro’s Disadvantage Business Enterprise: MEDIUM

   The DBE certification is the States premier certification allowing 25% of all state set-asides to be reserved for certified firms. Most people think Metro is the subway and bus systems, but contracts are given to a variety of industries. We have seen them as diversified as ink jet suppliers and marketing. So to think that if you are a service business and don’t qualify think again. Having this certification is a big deal and if obtained will open new doors for you. The process includes an application and supporting documentation to be mailed to the certifying agency. approval can take up to 3 months.

2. Department of General Services Small Business and Disabled Veterans Certification (SB)/(DVBE): EASY

   The Department of General Services serves as the business manager for the State of California. They offer two certifications, the SB and DVBE. Both are online based certifications. Typical certification time can be within a few hours or weeks depending on the type of industry. For instance, service based businesses can be certified very quickly while manufacturing companies need to upload documentation which then needs to be verified by a DGS officer. The DVBE certification is reserved for veterans who are at least 10% disabled and honorably discharged. Documents such as dd214 and discharge papers need to be uploaded.

3. Supplier Clearinghouse Minority Business Enterprise (MBE) Certification: EASY

   Supported by The  California Public Utility Commission (CPUC), which regulates privately owned electric, natural gas, telecommunications, water, railroad, rail transit, and passenger transportation companies. The MBE certification is an online based certification which is fairly easy to do. Certification can take up to 2 weeks depending on the complexity of the applicant.

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Paul Mazbanian SBC Consultants, Inc. www.sbclending.com/ paul@sbclending.com/ 818-551-9400

Paul Mazbanian
SBC Consultants, Inc.
www.sbclending.com/
paul@sbclending.com/
818-551-9400

Small Business Enterprise Certification Initiative

 

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On June 2nd, 2014, Metro officially announces their Small Business Set-Aside Program to level the playing field for Small Business Enterprise (SBE) by setting aside contracts that only SBE Certified firms can compete for as prime contractors, suppliers and consultants.

Depending on the type of procurement, contracts will range from $3,000 to $5 million. As long as there are 3 or more SBE certified firms available for a single contract, the set aside will be set for them.

According to Metro, “the set-aside program was developed in response to a recent mandate by the Federal Transit Authority (FTA) to improve competition by SBEs on FTA funded procurement.”

The Small Business Set-Aside program offers the following BENEFITS:

  • Enables SBEs to compete as prime contractors, increasing the opportunity to win contracts.
  • Levels the playing field by limiting competition.
  • Notifies of SBEs of eligible contract opportunities.
  • Builds firm capacity, allowing SBEs to take on larger contracts.
Paul Mazbanian SBC Consultants, Inc. www.sbclending.com/ paul@sbclending.com/ 818-551-9400

Paul Mazbanian
SBC Consultants, Inc.
www.sbclending.com/
paul@sbclending.com/
818-551-9400

8a certification statistics

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The limited number of 8(a) Certified firms in the United States gives these firms the unique opportunity to bid on Federal Contract set asides. That means that only 8(a) certified firms are allowed to bid and win these contracts without any outside competition. This number is lowered even more as industry specific bids come in to play.

As of 5/20/2014 the SBA Los Angeles District office, which Covers the Counties of Los Angeles, Santa Barbara and Ventura has only 214 approved 8(a) firms in it’s database. An extremely low number when considering that there are thousands of businesses in Los Angeles alone.

As of 5/20/2014 the SBA’s Santa Ana District Office which covers Orange, Riverside and San Bernardino Counties only has 140 approved 8(a) firms in it’s database. 

As of 5/20/2014 the San Diego District Office which covers San Diego County, has only 164 approved 8(a) firms in it’s database.

Total Southern California Figures are roughly 518 approved firms.

In California, there are a total of 802 certified firms or 11% of all certified firms are represented by California.

In the United States, there are only 7,236 certified 8(a) firms.

Let’s do some math. If averaged out, each firm would be getting around $2,487,562 in annual contract work. Although this will never happen due to the majority of the firms being inactive in contract participation, it gives you an idea of how powerful having the 8(a) certification can be.

 

8(a) Certifications Data:

Los Angeles: 214

Santa Ana: 140

San Diego: 164

California: 802

United States: 7,236

*Figures provided by SBA’s Dynamic Small Business Search as of 5/20/2014.

 

Paul Mazbanian SBC Consultants, Inc. www.sbclending.com/ paul@sbclending.com/ 818-551-9400

Paul Mazbanian
SBC Consultants, Inc.
www.sbclending.com/
paul@sbclending.com/
818-551-9400

 

Waiver of the SBA 8(a) 2 year rule

 

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For those applying for the SBA 8(a) Business Development program, you have heard of the 2 year rule. In this article I will be discussing the 5 steps an individual needs to take to waive the 2 year rule.

Not all businesses need to be in business for 2 years to apply for the 8(a) program. Some individuals may feel the need to become a part of the program prior to 2 years. The SBA feels that 2 years is a good amount of time for a business to gain experience and have enough revenue to participate successfully in the 8(a) program. But what if you dont have 2 years under your belt? What do you do? Do you wait or do you apply?

The SBA has 5 requirements that they recommend a business possesses when applying under the 2 year rule.

They Are:

1.        The individual or individuals upon whom eligibility is based have substantial business management experience.

2.        The applicant has demonstrated technical experience to carry out its business plan with a substantial likelihood for success if                         admitted to the 8(a) BD program.

3.        The applicant has adequate capital to sustain its operations and carry out its business plan as a Participant.

4.        The applicant has a record of successful performance on contracts from governmental or nongovernmental sources in its                                 primary industry category; and

5.        The applicant has, or can demonstrate its ability to timely obtain, the personnel, facilities, equipment, and any other requirements               needed to perform contracts as a Participant.

Please visit our website at www.sbclending.com/ to learn more about our services.

 

Paul Mazbanian SBC Consultants, Inc. www.sbclending.com/ paul@sbclending.com/ 818-551-9400

Paul Mazbanian
SBC Consultants, Inc.
www.sbclending.com/
paul@sbclending.com/
818-551-9400

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Computing Personal Net Worth for the 8a Certification.

The 8a Certifications, like all other Certifications have guidelines and rules. The 8a Certification is by far the most difficult of Certifications to get and thus the most strict when it comes to Personal Net Worth. The SBA states that an applicants, personal Net Worth May not exceed $250,000, excluding their home, retirements accounts such as 401k or IRA’s and their equity in their primary business. However, there are other factors that applicants must consider. Remember that it excludes the equity in the primary business. But what happens if you own multiple businesses, but are only applying under one business? The rule of thumb is that the equity you possess in the other businesses MUST be included in your Personal Financial Statement and will be added to your assets.

How do you know what to add? The line items to look for are Retained Earnings and Capital Stock.

The Retained Earnings are the earnings the owner forgoes to take as a distribution and lets the company retain them. Hence the term retained earnings. Retained earnings is a balance sheet item.

Capital Stock represents the size of the equity position of a firm and can be found on the balance sheet as well.

Reasoning Behind This:

This is a conservative way of determining the value of the business to be included on the personal financial statement.  It could significantly undervalue or overvalue the company by using this method.  If it severely undervalues the business (in other words, if the owner could sell the business for substantially more than the total of the retained earnings and capital stock investment), then you’ll want to support the “real” value of the business with an appraisal value submitted by a qualified/licensed business appraiser.

A lot of people applying on their own tend to forget to add Retained Earnings and Capital Stock for their additional business to the computation of personal net worth. This is a HUGE mistake and after spending hours and hours of work getting the 8a application complete, this minor overlook can be a waste of time.

**Take a look at our latest Video Testimonial HERE.

Paul Mazbanian SBC Consultants, Inc. www.sbclending.com/ 818-551-9400

Paul Mazbanian
SBC Consultants, Inc.
www.sbclending.com/
818-551-9400

HERE

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Over the last few weeks we have seen an influx of calls from potential customers seeking Government Certifications. One such case was when a client called and needed to be certified with the State of California as a Disadvantaged Business Enterprise or DBE. I had another appointment within close vicinity so I scheduled to meet him at his office.

Client owns a garbage disposal company and has been quite successful. He primary is a subcontractor working under a prime contractor. One of the prime contractors he works with requested he get the DBE Certification in order to give him more business. The client was told this roughly 3 months ago.

When I met with him, it was brought to my attention that he had a deadline of 3 weeks to get Certification Approved. I explained to the client, that the time frame needed for us to assist in completing the Certification would take roughly 2 weeks and that the Certifying agency, in this case LA Metro, can take up to 3-6 months in approving his application.

The client knew that hiring me would get the job done but he would miss his deadline. He decided to not go through with the certification.

This is a classic example of how thinking ahead can help you move forward faster. If the client took the initiative and called me in the beginning he would have been approved and the opportunity to increase sales and satisfy his vendor.

RECOMMENDATIONS:

All businesses should have goals in regards to sales, marketing, hiring new employees, efficiency etc. The same goes for Certifications. Don’t wait until the last minute to get certified. The certification process can be lengthy and needs time to be finessed for approval. We are very good at we do, but we still need time to prepare, meet, complete the application and gather the supporting documentation to submit. . As good as the certifying agencies are, they have hundreds if not thousands of applicants at any given moment and work on a first come first serve basis.

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Paul Mazbanian

Paul Mazbanian

www.sbclending.com/

E-MAIL: paul@sbclending.com/

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Over the past 11 years, we have been assisting Small Businesses get Certified with either the Federal or State Government. Typical questions always comes up.

1. Why do I need to Be Certified?

2 . How will it help me?

3. How much Does it cost?

4. What We Recommend.

These are all very important questions of course, which all business owners deserve to know. In this article, we will try to answer these questions and hope that it will give you the ability to determine if indeed it ‘s worth it r not.

It is first important to understand that there are many different certifications available. There are Federal, State, County and City Certifications with different variations for different departments such as metro, airport commission etc. We will be speaking in general terms. Knowing which one would benefit you most is critical. This article will focus on the general topic of certifications.

1. WHY DO I NEED TO BE CERTIFIED?

For the more complex  Certifications such as the SBA (8a certification) or the States Disadvantage Business Enterprise (DBE) Certification, you will need to make a determination if you can bid and win contracts to increase revenues. These certifications are harder to get due to their complexity and more expensive if you desire to hire a professional consultant to guide you through the process. It is an investment, which if utilized correctly can prove to be very rewarding.

For the less complex Certifications, such as the Women Owned Small Business Contracting program (WOSB) there are two reasons to get the certifications.

1. contracting- To bid on Government jobs.

2.Marketing- Use it to market yourself as a Federally Certified Company.

2. HOW WILL IT HELP ME?

Small Businesses like us are always looking to find new revenue streams to increase sales. We sometimes add new services, give discounts etc. to entice people to buy or choose us and not our competitors. The Government has created programs to help Small Businesses compete in a more fair environment. They realize that the backbone of this economy are Small Business and if we don’t survive, its 2008 all over gain.

In order to keep things fair, the Government requires that all Federal, State and Local agencies give a percentage of their contracts to certified companies, disallowing large corporations to take part. For example, let’s say for argument sake that there are 1000 construction companies in the United States. 500 are 8a certified and 500 are not. Only the 500 that are 8a certified are able to bid on that particular contract reducing the competition to 50%.

3. HOW MUCH DOES IT COST?

This is a difficult question to answer. There are plenty of consultants out there who make money assisting businesses get certified for the different certifications. Depending on the complexity of the Certification price ranges will vary. For example, the SBA 8a Certification will be significantly more expensive then say the Women Owned Small Business Certification. There is certainly more work to be done and a lot more hours put in to the 8a compared to the WOSB.

4. WHAT WE RECOMMEND:

A. Work with a local firm: These Certifications require a lot of one on one time and proprietary information being shared, such as tax returns. A local firm can meet with you in person making the process easier.

B. Experience: The experience a firm hold is crucial in getting approved. It is always a benefit if the consultant has a certifications background but also educated in finance, accounting and law.

C. Return on Investment: What is the potential of increasing sales through contracts? If you are paying $1000 for a certification and the contract is for $10,000 is it worth it?

SBC Consultants, Inc is Government trained. We pride ourselves in working with only local firms giving us the ability to give the best customer service as possible. To learn more about our certifications please visit the certifications page on our website HERE.

Paul Mazbanian

Paul Mazbanian

CEO

Small Business Community Consultants, Inc.

Email: paul@sbclending.com/

Tel: (818) 551-9400

The SBA 8A Certification

WHY OBTAIN THE 8A CERTIFICATION???

In our last article, I spoke about the 2 main reasons why a Women Owned Business should become Federally certified as a WOSB. The 8a certification, although has similar reasoning, there is one particular trait about it which makes it very special.
MONEY…. 23% of all Government contracts are required to be awarded to 8a certified firms. That is, all federal agencies, departments of agencies etc. are required by the Federal Government to give almost a quarter of their contracts to only 8a certified firms. This not only reduces the competition significantly it levels the playing field so that Small Business may complete more fairly.
Why Should Businesses Apply?
During the first term of the Obama administration, $376.2 billion in contracting dollars went to Small Businesses.  This is a $48.1 billion increase over the four preceding years even as we have reduced contracting spending overall. This tells us that the Government wants to help Small Businesses by giving them new opportunities to grow.
The Process:
The 8a process for those who have attempted it, know that it is quite lengthy. The average time it takes to complete the certification will vary between 20-40 hours depending on the business structure, its owners etc. Some of our clients who have attempted to complete it themselves have decide to hire us instead to avoid the headache of trying to understand the complexity of the program.
What We Do For You:
We ONLY consult with Los Angeles based companies. That keeps us local and will allow us to give the best service to our clients. They know we are just a few miles away and can call or meet with us as often as they would like.
*If you would like to learn more about the 8a certification, please visit the 8a LINK HERE: http://www.sbclending.com//services-8a-certifications.php.
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Paul Mazbanian

CEO

535 N. Brand Blvd. Suite 245

Glendale, CA 91203

Tel: 818-551-9400

Fax: 877-636-3792