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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

 

8(a) Economically Disadvantaged Explained

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The SBA 8(a) Certification, like other Certifications have rules an guidelines which each business must qualify for prior to applying. Below is the clarification on the Economically Disadvantaged Rule.

 Economically Disadvantaged:

A. Personal Income- The SBA requires that the Individual claiming Disadvantage must have a Personal Income less than $250,000 on average for the past 3 years. If the 3 year average is greater than $250k you are no eligible. Once admitted in to the program, this threshold increases to $350,000.

B. Personal Net Worth- The individual claiming disadvantage must not have a Personal Net Worth greater than $250,000. This does not include, the equity you possess in your personal residence, any retirement accounts you have or the equity in your business. The reason for this being, all of these assets are assumed to be used for your business at one time or another. However, if you do own Investment properties or other business, the equity in each will be calculated toward your personal net worth.

 

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

 

The SBA’s Narrative Statement of Social Disadvantage.

 

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The SBA requires all applicant to complete a Narrative of Social disadvantage. In this article, I will be discussing the following.

1. What is the Narrative Statement of Social Disadvantage?

2. Why does the SBA require it?

3. How should you write it?

1. What is the Narrative Statement of Social Disadvantage?

The Narrative Statement of Social Disadvantage is a story an applicant writes about themselves on instances in their life where they have experienced some type of set back due to their racial background. To prove social disadvantage, the individual(s) owners must ultimately show that such personal experiences had a negative impact on entry into or advancement in the business world.

2. Why does doe SBA require it?

The SBA states that certain minority groups are designated as socially disadvantaged. That is, these groups throughout the course of history, are believed to have experienced racism. Of course, not everyone experiences this, and those who have, unfortunate as that may be, need to explain how and why to be eligible for the 8(a) program. The 8(a) program, as sated in our last articles, helps level the paying field for minorities, giving them greater opportunities to complete in a more fair playing field.

3. How Should You Write It?

The answer here is simple. Truthfully. Successful narratives are written starting with their childhood experiences, leading up to college and finally in the work force. I met with a Mexican American client today, and he didn’t quite understand how he was socially disadvantaged. Initially he could not think of any stories, but after asking him a few simple questions on his high school years and his career, he began to think of specific moments in his life that he at first did not realize what were inevitably socially inappropriate remarks by his peers. For example, accusations of fraud based on his skin color was one. A second was a teacher thinking he was cheating because he earned a high score on an exam. He was asked to retake the test in a separate room and scored an A. The teacher never questioned him again. Traumatic. I know.

Unfortunately, it’s stories like these that have kept minorities from excelling in this great country and these stories need to be told. Hence, the SBA wants to make certain that individuals applying for the 8(a) Certification have been one time or another Socially Disadvantaged.

 

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

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.

JUST ADDED!! VIDEO TESTIMONIALS FROM OUR CLIENTS. TAKE A LOOK HERE

Paul Mazbanian

Paul Mazbanian

www.sbclending.com/

E-MAIL: paul@sbclending.com/

www.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

How to Obtain a FREE DUNS Number.

If any of you have tried obtaining any Federal Certification, you are already aware that the first step is to obtain a DUNS number. It is first important however to understand what a DUNS number is and what is it used for.

What is a DUNS Number?

Data Universal Numbering System also known as DUNS is regulated by Dun and Bradsreet (D&B).  D&B uses this unique 9 digit number to identify each business separately and to maintain their business credit standing.

Federal agencies will require a firm to have a DUNS number prior to becoming vendors with them. Getting a DUNS number is FREE although many companies will try to charge you up to $1,000 to get one.

Follow the following link:

https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm and begin the process. Once completed, a DUNS number will be assigned to you within 48 hours at NO CHARGE.

We encourage you not to trust firms who insist on charging for the DUNS number.

To learn more about Government Contracting and how to obtain a Federal or State Business Certification, please visit our website at www.sbclending.com/ and click on the Certifications link.

Paul Mazbanian

Tel: (818)551-9400

Email: Paul@sbclending.com/

What to Expect in 2013:

As 2012 passes us by and 2013 becomes reality, Business Owners are wondering what changes will take effect be in 2013 compared to 2012. Our answer is simple, a lot of the same old same old.

 Business Loans:

  • Lenders are always introducing new programs to entice Business Owners to apply, but the lending guidelines will not change. That is, as our April 18, 2012 article (http://sbclending.wordpress.com/2012/04/18/hello-world/) states, the 5 C’s of credit will very much be in effect. Lenders will continue to be strict in order to minimize their risk.

Business Certifications:

  • While lending guidelines continue to remain tight, Business Owners SHOULD always be thinking of ways to grow their customer base. Certified Companies will always have more opportunities then non-certified companies. That is, the Government has reserved new opportunities only to those businesses that are certified. Intern, those who are not certified will not be able to bid on that job. Here is a link to our Certifications page, we hope you will find it helpful. 

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Government Contracting Basics

Are you currently bidding on contracts or maybe you would like to get into the game of bidding on contracts? Below are several reasons for any business to have a certification.

Businesses who DO bid on contracts

Businesses who do bid on contracts will find that becoming certified by the State or the Federal Government will allow them to bid on new opportunities not available to them otherwise. Both the State and Federal Government set aside funds for certified companies. State and Federal agencies are required to designate a percentage of their contracts to certified agencies. Being certified not only increases your chances of getting new contracts, but it allows you to do it with less competition thus increasing your chances of winning the bid.

For Example: If there are 1000 machinists in the city they would all be able to bid on a particular contract that the Government makes available. Some are larger then others, therefore giving them the advantage of underbidding their smaller competitors and winning the bid. What if from those 1000 machinists only 100 were certified with the Government as a Small Business? If you were one of the 100 certified, you would only be competing against 99 competitors rather then 1000, thus significantly increasing your chances to compete in a fairer playing field.

 

Business who DO NOT bid on contracts

During time of uncertainty, consumers are looking to do business with people they can trust. Money is scarce nowadays and people are weary about spending as frequently as before. Gaining a new customer is the most difficult business activity. This is because you as the service provider must convince the consumer that not only are you trustworthy, bur rather you can get the job done at a reasonable price.

What makes someone choose one service over another? Most of you would say price is a key deciding factor, which is true but people are willing to pay a little more for quality. For instance, a friend of mine owns an insurance company (he mostly sells business and personal insurance). After having multiple discussions with him regarding his business, he consistently tells me that he is not the cheapest price in town. The reason for his success has been due to the legitimacy he has been able to establish amongst his peers. People are willing to pay a little extra for his knowledge knowing that they will get unmatched service.

Imagine for instance that you need to purchase a custom made machine from a manufacturer. You have two options: 1. A company that has been in business for 5 years or 2: A company that has been in business for 5 years and is Federally Certified.

Being designated as a certified business with the State or Federal Government gives you more legitimacy!

 

As Small Business owners we all need help to get ahead and becoming certified with the State or Federal Government will allow you to significantly increase future revenues. Visit our Certification link HERE.

 


Paul Mazbanian (2011 SBA Young Entrepreneur of the Year – Los Angeles District Office)
SBC Lending
http://www.sbclending.com/

Loans for New and Existing Businesses

The subject of our first article was about the 5 C’s of Credit (Character, Capital, Capacity, Collateral, and Conditions). In addition to credit, lenders are looking for businesses that are financially stable, which I will discuss below.

Existing Businesses

Lenders prefer to do business with existing companies due to their multiple years in business. Lenders prefer this route because they can track the progress an existing business has made over the years, which is done in multiple ways:

  1. Collecting previous years tax returns
  • Tax returns are the only official document which allows the lender to see how much a company has made in the past. Cash flow is a term used by lenders to determine pay back ability. Gross receipts will show the sales of a company, but the net income will show the companies profit after expenses.
  • In some cases, companies are making more then is being reported to the IRS. A few weeks ago, a client who owns a coin laundry business contacted me for a loan. Client claimed to make over $1,000,000 in sales. His tax returns however showed revenues of $20,000 and a net loss of ($10,000). When I asked the client what happened to the $1,000,000 in sales, he replied “we are a cash business and don’t report the income.” As you can imagine, this was a problem. Since he is receiving cash, he is not reporting the income to the IRS and therefore it is not being reflected on their business tax returns. Since the tax returns are the only reputable report to verify income, the lender can not take his word on his total sales.

        2.  Financial Statements

  • The profit and loss statement: During any given year when the company has not yet filed for their taxes, the profit and loss statement will allow us to see the year to date revenues and expenses of the company. This will give us a good idea how the company pairs up compared to previous years. I would ask this document to be prepared by a CPA  for authenticity.
  • The balance sheet: It will give us a good idea where the company stands with their assets and liabilities thus giving us the eventual net worth of the company. This document is important to see how the company manages its debt. It will show all assets compared to its liabilities giving us either a negative or positive. A negative net worth tells us that the company has more debts then assets which means they owe more then they own. A Positive net worth tells us the company owns more then it owes. This should also be verified by a CPA.

The above mentioned items will allow us to get a grasp of a companies pay back ability. There are however, other documents needed while processing a loan. They include but are not limited to:

  1. Business debt schedule
  2. Personal financial statement
  3. Personal Tax returns

New Businesses

Since new businesses can’t provide tax returns from previous years, it is crucial to have excellent credit and a sound business plan when applying for a loan. All new business owners must realize that having great credit is crucial when requesting for financing. The following two items are just two of the most important items needed for New Businesses. However, when getting a loan package together there will be additional items requested.

Needed Items

   1.  Credit

  • As our previous article states, credit will determine how risky you are to a lender. Hence, having a low credit score will give a lender the impression that you are not trustworthy. Therefore, understanding your credit report, how much you owe on credit cards relative to the limits on those cards are important. Lenders will take in to consideration how much debt an individual already has. The lower debt you have the less of a risk you are to lenders.
  • Also, having a high credit score does not necessarily mean that you will get approved. The days of approving based on your score are over. Lenders now are more interested on what makes up your credit score and will want to make certain that your credit report is clean.
  • Example: I received a call from a client who had just moved to the states a few years ago. He does not have any credit cards but does have a vehicle he is leasing. He has never been late on his payment. His credit score is a 720, a respectable score by today’s standards. The client wanted to start a business with some money he had been saving and inquired about a Small Business Loan. When I asked for his credit report, I saw that it wasn’t much of a report. The only reported credit he had was the lease on his vehicle. I advised the client not to apply for a loan, but rather begin building his credit by obtaining small credit cards. By using and paying them off every month, he would have established credit slowly. He did however decide to apply for the loan and not take my advice. He was declined!
  • Why did this happen? The main reason for the decline was due to lack of credit history. The client did not have enough credit at the time for an approval. Lenders are looking for business owners to have a good amount of years behind them borrowing and paying off debt.

2.   Business Plan

  • A business plan is crucial for start up companies because it is the only way to show a lender how they will be repaid. Thus, creating a sound business plan will be crucial in obtaining any type of financing. A business plan should explain everything about the business and its owners. A business plan can be the determining factor of an approval or a decline.
  • Creating a Business Plan takes effort and time. Our last article outlined the Table of Contents we feel is crucial in creating a great business plan.
  • Please visit our business plan link on our website http://sbclending.com//services-business-plans.php

Paul Mazbanian (2011 SBA Young Entrepreneur of the Year – Los Angeles District Office)
SBC Lending
http://www.sbclending.com/

Business Planning

As a business consultant, the first skill that I learned when I first began working in the industry is how to develop a business plan. I learned that if done right, the business plan will be the most effective tool in achieving business goals and it will act as a road map for your business.

The following highlights important information a proper business plan should cover:

1. Executive Summary

  • A summary of the following longer report.

2. Use Of Funds

  • If requesting for financing or an investment, this section will lay out in detail how much is being requested and what it will be used for.

3. Investor Proposition

  • If requesting an investment you will need to write the proposition you are proposing, which will include the rate of return.

4. Company Ownership

5. Company Location

6. Exit Strategy

7. The New Concept

  • In this section, you will need to describe what the industry is currently doing and how your concept will be changing the industry.

 8. Departments and Services

  • In this section, you will need to explain the different departments and services in detail (what are you selling the customer?).

9. Market Analysis Summary

  • Researching the market. Your goal is to enter the market and share the piece of the pie with your competitors. Knowing how big the industry is and the per capita spending is very important You will also need to identify your demographics in this section as well.

10. Market Segmentation

  • This section will need to explain the segments of the market in which you anticipate will buy your product and/or service.

11. Market Needs

  • What is the market lacking that you are going to provide?

12. Industry Analysis

  • How large is your market? What has happened to the industry in the past couple of months? What do you think the industry will do in the future and why? What has the trend been for the industry?

13. Competitive Comparison

  • Identify your competitors. Who they are and what do they do? Conduct a SWOT analysis

14. Strategy and Implementation Summary

  • In this section, you will be identifying your goals. Label as short term and long term goals. Usually shot term goals will range from the day you start until the end of the first year. Long term goals will be any goal you have after the first year. Additionally, you will also have immediate goals. What you must accomplish before you open your doors are your immediate goals. All of the aforementioned goals are crucial to identify pre-startup.

15. Marketing Strategy

  • Identify the different marketing strategies you will implement. This includes but is not limited to social media, print advertising, and online advertising. Be clear and specific (how much will each cost?).

16. Management Summary and Gaps

  • Identify the key players in your business. Who will be running the day to day operations of the company? If you plan on hiring new employees in the future, identify the key positions needed and when you anticipate on hiring them.

17. Financial Projections

  • Financial projections should be used as a goal. Identify how much money you would like to make per year or per quarter. Once completed, you will have a good idea of how much you need to sell of one product.