Over half of Americans either own or work for a small business, which creates about two-thirds of new jobs in the U.S. each year, according to the SBA. Small businesses have a large impact on the world around us. However, many people don’t fully understand what qualifies a business as small, how they benefit our country, the resources available for them, or what is involved in starting one.
What is a Small Business?
To be considered a small business one must adhere to the specific industry size standards set by the Small Business Administration, according to Census.gov. These size standards are by firm revenue ranging from $1 million to above $40 million, along with employment ranging from 100 to over 1,500 employees. The business must also be organized for profit, be independently owned, and operated, operate primarily within the United States, or make a significant contribution to the economy.
In terms of federal government procurements, vendors must meet the business size standard that corresponds to the North American Industry Classification System code selected by the contracting officer for the particular contract. “The selected contract NAICS code is not required to match up to a vendor’s principal activity NAICS code. The vendor qualifies as a small business as long as it meets the size standard for the procurement”, says State.gov.
How the SBA Helps Small Businesses
The Small Business Administration began in 1953 as an independent agency with the purpose of aiding, counseling, assisting, and protecting the interests of small businesses. The SBA also assists in preserving free competitive enterprise and maintaining and strengthening the overall economy of our country.
Since it first began, the SBA has delivered millions of small business loans, along with loan guarantees, contracts, counseling sessions, and various other forms of assistance. “The U.S. Small Business Administration (SBA) helps Americans start, build, and grow businesses”, says SBA.
The SBA also helps small businesses in achieving success through highlighting the impact of outstanding entrepreneurs, small business owners, and others from all 50 states and U.S. territories during national small business week. To help with their funding, the SBA sets goals with other federal departments to award 23 percent in prime contracting dollars to small businesses.
Through their financing, entrepreneurial development, and advocacy services the SBA assists entrepreneurs in owning successful small businesses. “You can also learn how to qualify for government contracts, get funding for your company and explore business certifications,” says USChamber. All the resources on the SBA’s website are free to anyone wanting to start or grow their small business.
How They Benefit America
Small businesses benefit the American economy through the creation of jobs, keeping money in their communities, promoting diversity within their businesses, and increasing local community investments. Successful entrepreneurs also continually learn about their industry, business, and customers to strengthen their businesses and community. They also provide ongoing training and professional development opportunities to upskill, engage and retain their employees.
According to the Bureau of Economic Development, “small businesses have accounted for 65.1% of net new job creation since 2000,” says Verizon. Local businesses are also responsible for generating revenue that is taxable by the community. These funds are used to fund local schools and public services along with projects for lighting, sidewalks, and more. With small businesses more likely to support fellow local merchants, there are also sustainability gains. For example, carbon emissions are lowered as the supply chain is more compacted.
In the small business economy diversity is more common among the workforce in comparison to large corporations. 36 percent of small businesses are owned by women, 9 percent owned by veterans, and almost 15 percent being owned by people of color, according to data from a 2019 SBA report.
How To Start a Small Business
Starting a small business is a risky and daunting endeavor. Breaking down the main requirements needed to start a business makes it less intimidating to entrepreneurs. “The resources required to start a business can be broken into five broad categories: financial, human, educational, emotional and physical resources”, says Chron.
Funding is the most important out of these categories due to the many startup costs associated with starting a business. Grants and loans are a great way to obtain funding which can be granted from the U.S. government, financial institutions, and private investors.
A strong team of experienced employees, education on the industry, proper premises and equipment, and a strong support system will also help an entrepreneur thrive in a competitive market. Starting with a business idea that solves a need in an industry that isn’t overpopulated with competition is a great way to start off, says Complete Contract Consulting’s CEO Sharna Barnes in a recent interview on entrepreneurship. “Start with some market research, and if you choose to do this, make sure that you become a student and gain knowledge first before you spend any money”, advises Entrepreneur. Starting a business is a complicated process and going into it blindly will lessen the chances of the business surviving.
How Government Contracting Benefits Small Businesses
Small businesses can contract with federal, state, and local governments to receive the revenue they need to grow their business. Through resources such as USA.gov, businesses can get help with government contracting and use a search tool to find contract opportunities.
The U.S. government is the world’s largest customer. They buy a variety of products and services and are required by law to provide opportunities for small businesses. According to the SBA, there are two broad categories of government contractors:
- Prime contractors bid on and win contracts directly from government agencies
- Subcontractors join prime contractor teams, usually to provide a specific capability or product
For a small business to serve as a prime contractor or subcontractor, it’ll need to meet the requirements of a small business and register as a government contractor. The federal government tries to award a certain percentage to women-owned, minority-owned, service-disabled owned small businesses along with HUBZone program participants.
CCC Can Help Grow Your Small Business
Complete Contract Consulting excels in finding and procuring contracts that fit the unique capabilities of our clients, while also providing the necessary support to help every client win a government contract through our proposal writing & presentation services. With a deferred payment option available, no fee is charged until the government contract is won and the work has begun.
Contact us today to learn more about how our expert team will help you land the government contract you want!