Breaking Down Small Business Designation: What it Means and How to Get It
Small businesses are the backbone of any economy. They provide jobs and contribute to local communities. However, the world of small business can be a challenging one to navigate, especially when it comes to finding ways to grow. One way to help small businesses grow is to take advantage of the different designations available to them. In this article, we will explore what it means to be a small business and how to get the designation that can help your business grow.
What is a Small Business Designation?
A small business designation is an official recognition that a business meets certain criteria to qualify for specific benefits. Small business designations exist at the federal, state, and local levels, and each has its own unique criteria.
At the federal level, the Small Business Administration (SBA) sets the criteria for small business designations. The SBA defines a small business as having fewer than 500 employees. However, for some industries, such as manufacturing, the threshold may be as high as 1,500 employees. In addition to employee size, the SBA also considers factors such as annual revenue, industry, and ownership structure.
How to Get a Small Business Designation
To obtain a small business designation, you will need to go through an application process. The process will vary depending on the designation you are seeking. However, there are a few steps that are common to most applications:
1. Determine Which Designation is Right for Your Business: There are several designations available to small businesses, including Woman-Owned Small Business (WOSB), Service-Disabled Veteran-Owned Small Business (SDVOSB), and 8(a) Business Development Program.
2. Gather the Necessary Documents: Depending on the designation, there may be specific documents you will need to provide, such as tax returns, financial statements, and proof of ownership.
3. Submit Your Application: This may be done online or by mail. Be sure to follow all instructions and provide all requested information.
Benefits of Small Business Designation
There are several benefits to obtaining a small business designation. These include:
1. Access to Government Contracts: Many government contracts are set aside for small businesses. Obtaining a small business designation can make it easier to qualify for these contracts.
2. Access to Funding: Small businesses may be eligible for loans and grants that are only available to businesses with certain designations.
3. Networking Opportunities: Small business designations often come with networking opportunities that can help you connect with other small business owners, mentors, and potential customers.
Example of Small Business Designation: WOSB
One example of a small business designation is the Woman-Owned Small Business (WOSB) designation. To qualify, a business must be at least 51% owned and controlled by one or more women. The WOSB designation is particularly beneficial for businesses that operate in industries where women are underrepresented.
To obtain the WOSB designation, the business owner must register their business in the SBA’s System for Award Management (SAM) and complete the WOSB self-certification process. Alternatively, the business can be certified by a third-party certifier.
Conclusion
Obtaining a small business designation can provide many benefits for your business. Whether you are looking to qualify for government contracts, access funding, or network with other small business owners, there is a designation that can help you achieve your goals. By taking the time to research and apply for the right designation for your business, you can set your business up for success.
