As you prepare your application materials, however, bear in mind these small costs so you are not caught by surprise along the way:

1. Postage. You are definitely going to want to send your 8(a) materials to the government in a secure and traceable fashion such as FedEx, UPS or DHL. (We are sad to say this, but the United States Postal Service has lost some of our clients’ packages in the past.) After your initial application submission there will likely be some back and forth with the SBA that will require the mailing of additional files and documents.

2. Notary public. You have to notarize at least one document in your 8(a) application and you might discover other documents that require notarization as well, depending upon your individual situation.

3. Accountant. If you do not compute your company financials yourself you will need to pay your accountant to generate a current balance sheet and profit and loss statement at a very minimum.

4. Ordering company formation documents. If you misplaced your company formation documents or if they are incomplete, your state of formation will charge you a fee to send you new copies.

5. Photocopying and printing. You don’t want to send the SBA your original documents–send copies only, as originals will not be returned to you. Also, your copying costs might add up if you go to a copy shop; one of the most recent 8(a) applications we processed was ten inches tall!

The 2012 edition has been revised and updated to reflect new 8(a) program rule changes that went into effect in 2011 plus we have added more examples of disadvantage to help you brainstorm and remember personal incidents of disadvantage from your past.

The kit contains multiple examples of real 8(a) narratives that were submitted by real 8(a) applicants and approved by the SBA (with names, places, etc. altered to protect privacy and confidentiality.)

Examples in the kit include:

• Statement of social disadvantage for a Caucasian woman business owner
• Statement of social disadvantage for an applicant who is claiming discrimination against his ethno-cultural background
• Multiple statements of economic disadvantage

1. First, pay off any significant federal debts such as taxes, student loans, and liens. If you cannot afford to pay off a federal debt in full, establish a formal payment plan with the cognizant federal agency (e.g., the IRS, Department of Education, SBA, etc.) now and keep that payment plan document to put inside your 8(a) application later.

2. Make a list of all of your personal assets. Don’t forget: if you are married and own an asset jointly with a spouse, note this asset in your list, too, with an annotation “50%” beside it so you don’t forget you own half of the asset. The SBA wants to know about every single asset or account you have, so be careful–many of our clients initially forget about some of the small checking accounts they established online and some of the 401K plans they left behind at past jobs and never shifted over into their own brokerages.

3. Make a list of every liability you have: mortgages, car payments, credit card accounts, HELOCs, etc. Remember, the SBA expects you to openly and honestly divulge the existence of every liability and account you have. As with your assets, remember to include liabilities you split with your spouse, if you are married.

4. For every account you have, be it an asset or a liability, find a document to show its current value. Be thorough–you will need a document to prove the existence of each asset and liability because the SBA will not take your word for it. Document, document, document.

5. Set aside all of this material in a folder or binder that you can access when you work on your 8(a) application in early 2012 so that your SBA Form 413, Personal Financial Statement, will be complete. Update your account statements if needed when you submit your Form 413. (If married, your spouse will have to fill in an SBA Form 413 too.)

Unfortunately,there are few–if any–situations in which the purchase of an 8(a) business constitutes a wise investment for a buyer.

First, the Small Business Administration (SBA) must review and pre-approve the sale of the company (including a legal review of the proposed sale documents), and this review process is usually slow because of limited staff availability at the SBA.

Next, at all times the 51% (or greater) owner of the business must be someone who is both socially and economically disadvantaged, plus he or she must have prior business management experience, adequate technical experience, and be of good moral character (meaning no felony convictions, no unpaid federal taxes, etc.) in order to be allowed to participate in the 8(a) program.

In other words, an advantaged Caucasian person or a rich individual from a minority group cannot buy an 8(a) company and retain the company’s certification; the purchase by such an individual actually invalidates the 8(a) certification entirely.

Also, consider the fact that the average business sales cycle is long, and as attorneys for both the buyer and the seller negotiate the sales process, precious time within the 8(a) program is lost.

A company can only participate in the 8(a) program for 9 years, and if a buyer values the 8(a) certification above all other factors, every month and every year that elapses reduces the value of the company as an 8(a) asset. (The company’s value might increase in other ways; however, this discussion assumes the buyer’s number one interest is the company’s existing certifications to be used as federal contract vehicles.)

Each year that goes by the SBA 8(a) certified company is also held to a higher and higher standard of performance by the SBA, such that by year #5 in the program the company will feel SBA pressure to stop using the sole source vehicle in lieu of competitive bids, so it might be tough for a buyer to take over the helm of the company during this intense time.

Under most circumstances, it is more practical, logical, and lucrative for an eligible individual to form and operate his or her own 8(a) business concern for 2 or more consecutive years–rather than trying to purchase and manage an existing 8(a) company–before applying for 8(a) certification on his or her own.

In the spirit of making life easier for you, the prospective 8(a) applicant, here are five quick don’ts to bear in mind as you work on building your company and prepping your 8(a) application:

1. Don’t apply for 8(a) certification now if most of your company’s revenue comes from a contract with your former employer. The SBA is just going to allege that your past employer is using your company as a front. It looks bad. Don’t do it. Get contracts elsewhere.

2. Don’t make your spouse the person in charge of the company just because he or she is a minority or a woman. First, for the purposes of the SBA 8(a) program, the SBA does not consider women to be minorities. Next, the SBA expects that whoever controls the company does so because he or she has past experience in the company’s field of endeavor; is properly trained and educated in the company’s field of endeavor; and has the experience and credentials necessary to serve as an executive.

If your spouse has never been in a management position before, the SBA is likely to allege that he or she is just a figurehead artificially placed in the chief executive role by you to obtain 8(a) benefits for yourself.

The person who controls your company must be a legitimate chief executive with demonstrable experience and credentials such as an advanced degree or a technical license in his or her name.

3. Don’t share office space, employees, or any other resources with companies owned by your immediate family members if you can avoid it. In short, sharing and pooling resources amongst family-owned companies can lead to SBA allegations that your company is secretly being controlled in a negative fashion by your relatives (and ties between family-owned firms can also negatively affect how the SBA interpret’s your company’s size.)

4. Don’t assume that because a business practice is common or normal in the commercial business world that it is also accepted and normal in the federal contracting world. If you feel worry that a certain business practice might look bad to the SBA, chances are it does. Example: Showing a loss on your business taxes during the first three years in operation might be a normal tax reduction practice in the commercial world, but in the federal contracting world it looks like your business is falling apart and is unlikely to survive a tenure in the 8(a) program.

5. Don’t assume that you get to decide what documents get submitted to the SBA and what documents get held back when you submit your 8(a) application. In a nutshell, the SBA can ask you for any document it wants when considering you and your company for inclusion in the 8(a) program, and failure to provide the requested documents is enough grounds for the SBA to decide you are not eligible for 8(a) status. Instead, assume your life is an open book and that the SBA will make a far-ranging inquiry into your company, its contracts, it key employees, its taxes, and its financials.

If you are the type of small business owner who is often upset about government intrusion, government regulation, and the like, then the 8(a) program is probably not the best fit for you and your company right now. The application process involves a lot of open disclosure and discourse with federal representatives, so you need to be comfortable with giving federal employees access to a wide variety of your personal and company documents. (These SBA representatives will, however, guard the privacy and confidentiality of your documents to the extent required by law.)

What these buyers usually mean by this remark is that they literally cannot locate SDVOSBs when they are ready to buy from them–the qualified SDVOSBs likely exist, but they don’t have an Internet presence to make it easy to be found.

In certain industries like Information Technology SDVOSB companies are already savvy about Internet marketing and are easy to find online. But when it comes to SDVOSBs that manufacture “widgets” or provide highly specialized technical services, not all SDVOSBs like these engage in online sales and advertising–but they should.

Here are five quick ways to increase your SDVOSB’s online presence so the federal government can find you when it needs you:

1. Have a website–even if it is only 5 pages–and dedicate one page to federal sales. A few good “one stop shops” to help you build a website quickly include Intuit and web hosting provider 1&1.

2. Engage in some basic Search Engine Optimization (SEO) for your website–use keywords that federal buyers might use to find you in your titles and headers, body copy, links, etc.

3. Register your business in as many free and reputable online directories as you can, and take the time to fill in your profile in each directory using the keywords that federal buyers might use to find you. Some good directories to try include Manta and Merchant Circle.

4. encourage your clients to submit positive reviews about you and your services or products on review sites like Yelp, Angie’s List, etc.

5. Set up social media profiles and then participate in online discussions on social media sites. For example, set up a LinkedIn profile for your company and another LinkedIn profile for you as an individual. Join some of the online groups for SDVOSBs.

Sometimes the first step in federal sales is simply letting federal buyers know you are available in the marketplace and eager and ready to help them.

1. Don’t obtain contracts from your previous employer, which can make it appear as if your company is just a front for them; do cultivate a diverse base of clients and possess a balanced project portfolio before applying for 8(a) certification.
2. Don’t appoint your spouse as the Chief Executive Officer (CEO) of the company unless he or she actually has a strong business management background from past jobs plus valid technical credentials; do select a CEO with the appropriate skills, credentials, licenses, and expertise required to succeed within your industry.
3. Don’t show a loss on your company taxes as advised by your accountant for tax shelter purposes; do show positive revenue and positive equity in your business instead to prove to the SBA that your company is healthy and stable enough to last the full 9 years of the 8(a) program.
4. Don’t immediately establish a large Board of Directors because you might accidentally dilute your company control or create a size or affiliation problem; do carefully vet every director and officer prior to applying for 8(a) certification because these individuals must submit their personal paperwork as a part of your company’s 8(a) application.
5. Don’t team up with a large company to the extent that 70% or more of your gross revenue comes from them alone, because the SBA will allege that your teaming partner is negatively controlling your company through your financial dependence; do inform all potential teaming partners that you are aiming for 8(a) certification and thus there are constraints upon the extent of the work you can perform for them until you are certified.

Need additional 8(a) help? Select the “8(a) Application Tips” tab on the first page of this blog or email us at info@get8acertified.com for more.

This $34.95 kit can be downloaded from our secure website http://www.SDVOSBcertification.net.

The kit contains 38 pages of information including:

• SDVOSB eligibility rules and requirements–make sure your company really qualifies to be an SDVOSB before you use the SDVOSB designation in your website or marketing materials
• Prerequisites–mandatory steps to take before you can be verified as an SDVOSB by the federal government
• Documents Lists–advice on which specific documents, records, and paperwork you need to prove your SDVOSB status
• Step-by-Step Instructions in simple language to guide you through the SDVOSB registration and verification process
• SDVOSB Business Resources–Trade associations and related resources for disabled veteran owned small businesses

If you still have questions or problems after using the kit, feel free to contact GCS Inc. for additional assistance at 703-350-8381 or info@get8acertified.com. We wish you and your SDVOSB much success!

If you are an extremely private business owner who is not comfortable with revealing your personal financials (and those of your spouse);
your company taxes and financials; the names of your clients and your contract details; banking statements; and other sensitive information to government representatives, you will not be able to get 8(a) certified at this time.

Think about the 8(a) application process as a background check on you, your spouse, your company, and all of your company’s key employees, including its officers, directors, owners, license holders, and others—that is the scope of the SBA’s inquiry.

The good news is your 8(a) application data is protected by the federal Privacy Act of 1974. The SBA will keep your data safe and confidential to the extent allowed by law.

If a third party ever launches a Freedom of Information Act (FOIA) request to try to access your 8(a) documents, there is a strong
likelihood that the FOIA request will be denied, and even if the FOIA request is approved, you will still be given the opportunity to redact” (remove) personally identifying information such as birth dates and Social Security Numbers.

There are multiple layers of protection at work to ensure your 8(a) data remains safe and confidential at the SBA. Some of our GCS Inc. 8(a) specialists have worked on 8(a) applications since the 1980s and we have never heard of the SBA violating anyone’s privacy or confidentiality when it comes to storing and processing 8(a) application forms, data and documents.