When selecting a business to pursue, you should think about what would best fit your objectives as an owner or entrepreneur. Each sort of enterprise has its own advantages and disadvantages that must be taken into account when making the decision.
These differences between 8a-certified companies and small businesses can hugely impact a business’s success. Major differences between these two include access to resources, responsibilities, regulations, customer base, profits, technology, growth, and risk. It is important to understand these differences so business owners can make the best decisions for their businesses. Knowing the advantages and disadvantages of each can help entrepreneurs make an informed decision about which type of company is best for them.
Let’s take a look at the most important differences between these two types of businesses. So, let’s get started!
Small Disadvantage Business (SDB)
Owned by socially and economically disadvantaged individuals, Small Disadvantaged Businesses (SDBs) are provided with bid and benefit eligibility for Federal procurements as well Air Force programs. In order to obtain the status of SDB, businesses may self-certify their qualifications – a different process than the SBA 8(a) Program. With this certification comes tremendous opportunities that cannot be passed up!
SBA 8(a) Program
To be eligible for the SBA 8(a) Program, small disadvantaged businesses must apply and gain certification from the Small Business Administration. This program provides comprehensive business development support ranging from help with management and technical assistance to contracting opportunities with the Air Force in both sole source and competitive set-asides.
8A vs. Small Disadvantage Business – Major Differences
Small businesses have a number of advantages over their larger counterparts, but there are also some distinct disadvantages. Here we will explore the differences between the two types of businesses.
1. Recertification Requirements
The main difference between 8a and small disadvantaged businesses is in their recertification requirements. Small disadvantage businesses are only required to recertify every 3 years, whereas 8a companies must renew their certification annually. This means that if a business wants to remain an 8a-certified company, it must pass rigorous examinations and reviews each year.
2. Access to Resources
Another key difference between 8a and small disadvantaged businesses is their access to resources. 8a-certified companies are eligible for more government contracts, which means they have more potential opportunities than SDBs. They also may be eligible for free or low-cost technical assistance from the SBA. However, SDBs can still. receive some government contract opportunities and aid from various foundations and non-profits.
The responsibilities for 8a and small disadvantaged businesses are also different. 8a companies must complete an annual review with the SBA to maintain their certification, whereas SDBs only need to recertify every 3 years. Additionally, 8a companies are required to file reports and documentation with the SBA every year, whereas SDBs only have to submit documents when they recertify.
The regulations for the two types of businesses also differ. 8a companies are subject to a number of restrictions and regulations that SDBs are not. For example, 8a-certified companies must comply with certain price caps on their contracts, and they may be limited in how much they can bid on government contracts. Additionally, 8a companies must use the SBA’s mentor-protege program to partner with larger businesses.
5. Customer Base
The customer base for 8a and small disadvantaged businesses also varies. 8a companies can bid on government contracts that may have a much wider reach than SDBs, which typically focus on local or regional markets. This means that 8a companies have the potential to reach a much larger audience.
6. Tax Breaks
In addition to the variety of benefits, 8a and small disadvantaged business owners can receive, tax breaks are also available for both types of businesses. 8a-certified companies are eligible for tax incentives from the federal government and state and local governments. SDBs may be eligible for certain state and local tax incentives as well.
7. Support Services
Finally, 8a and small disadvantaged businesses have different types of support services available to them. 8a companies are eligible for comprehensive business development services from the SBA, while SDBs may be able to access certain resources through non-profit organizations or other sources.
Overall, 8a and small disadvantaged businesses offer distinct advantages to business owners. Understanding the differences between the two types of businesses is important to decide which type best suits your needs. With a proper understanding of these differences, you can gain access to the resources and services that best suit your business.
Are You in a Dilemma About Choosing the Best? Contact Valet Works!
If you are still unsure about which business is best for your situation, don’t worry. Valet Works, the 8a contractor, has experts who can guide you on the best decision for your particular needs. Our knowledgeable professionals will help you identify the advantages of 8a and small disadvantaged businesses and ensure you get access to all the resources, contracts, and support services you need. Contact us today to get started!