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1 Strategic Business Planning, Marketing and Capture Management Getting Your Business 8(a) Certified Michael V. Perch, PMP, ITIL Principal & Owner Road.

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Presentation on theme: "1 Strategic Business Planning, Marketing and Capture Management Getting Your Business 8(a) Certified Michael V. Perch, PMP, ITIL Principal & Owner Road."— Presentation transcript:

1 1 Strategic Business Planning, Marketing and Capture Management Getting Your Business 8(a) Certified Michael V. Perch, PMP, ITIL Principal & Owner Road Map Consulting, LLC

2 2 Strategic Business Planning, Marketing and Capture Management Michael Perch – Background For 17 years owned a successful federal government contracting firm. Sold the firm in Started as a SCORE mentor in Adjunct Instructor at George Mason University since Founded RMC in 2007 – Management Consulting specializing in federal procurement. RMC has over 70 clients spread around the country. We assist provide assistance to small medium and large firms in matters pertaining to the SBA and GSA.

3 3 Strategic Business Planning, Marketing and Capture Management U.S. Small Business Administration Formed in 1953 by the Small Business Act. Activities are summarized as the 3 “C”’s: capital, contracts, and counseling. Helps lead the U.S. Government’s efforts to deliver 23% of prime federal contracts to small businesses like yours!

4 4 Strategic Business Planning, Marketing and Capture Management What is the 8(a) Program? An essential instrument for helping socially and economically disadvantaged businesses gain a foothold on government contracting. Offers a broad scope of assistance to firms that are owned and controlled at least 51% by socially and economically disadvantaged individuals. Divided into two phases: 4 year developmental and 5 year transition.

5 5 Strategic Business Planning, Marketing and Capture Management Benefits of the 8(a) Program Participants can receive sole-source contracts, up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing. 8(a) firms are able to form joint ventures and teams to bid on contracts, thereby enhancing the firms ability to perform larger prime contracts. Mentor-Protégé Program Nine year program tenure Prime contractors incentivized to award SDB/8(a)’s to meet subcontracting goals. (no such thing as an 8(a) goal)

6 6 Strategic Business Planning, Marketing and Capture Management Disadvantaged Status Eligibility Requirements

7 7 Strategic Business Planning, Marketing and Capture Management Socially Disadvantaged... Individuals are persons who have been subjected to racial or ethnic prejudices or cultural bias because of their identities as members of groups without regard to individual qualities. Individuals are presumed to be socially disadvantaged if they are a U.S. Citizen and a member of one of the following groups: African American Asian Pacific American Hispanic American Native American/Alaska Native Subcontinent Asian American

8 8 Strategic Business Planning, Marketing and Capture Management I’m not a member of one of the five designated groups – am I eligible for the 8(a) Program? Social Disadvantage Narrative Narrative must demonstrate your experiences and your life. They want to know what has happened to you! Must provide detailed specifics including names, titles, corroborating evidence of chronic and substantial discrimination. Must prove discrimination was severe, persistent, and caused significant damage to applicants business and career opportunities.

9 9 Strategic Business Planning, Marketing and Capture Management Economically Disadvantaged... Individuals are considered economically disadvantaged when their ability to compete in the free enterprise system has been impaired due to diminished capital and credit. Adjusted Net Worth must be under $250,000: Total of all Assets – Total of all Liabilities = Net Worth SBA allows the following to be excluded from Net Worth, which is considered your Adjusted Net Worth: Equity in primary residence Equity/Investment in business Any Retirement Investments

10 10 Strategic Business Planning, Marketing and Capture Management Does your business demonstrate a “Potential for Success?”

11 11 Strategic Business Planning, Marketing and Capture Management How does SBA determine “Potential for Success?” Technical & managerial experience of applicant firms managers. Operating history (at least 2 years in business) Ability of firm to access credit and capital Record of performance Does firm and employees hold requisite licenses if required?

12 12 Strategic Business Planning, Marketing and Capture Management The Two Year Waiver Exception Factor 1: The individual(s) upon whom eligibility is based must have a substantial and demonstrated business management experience. Factor 2: The applicant has demonstrated technical expertise to carry out its business plan with a substantial likelihood for success if admitted to the 8(a) BD Program. Factor 3: The applicant has adequate capital to carry out its business plan as a Participant. Factor 4: The applicant has a record of successful performance on contracts from governmental and nongovernmental sources in the primary industry category. Factor 5: The applicant has, or can demonstrate its ability to timely obtain the personnel, facilities, equipment, and any other requirements needed to perform such contracts as a Participant.

13 13 Strategic Business Planning, Marketing and Capture Management What constitutes “control”? Disadvantaged individual should hold the title of President or CEO. Be the highest compensated individual (exceptions?) Have the ability to hire and fire, set policies, and commit the firm to contracts. Complete control over budget and financial disbursement. Listed as signatory on firm’s bank accounts.

14 14 Strategic Business Planning, Marketing and Capture Management Are YOU in control? Do you devote your full time to the business? Do you have sufficient managerial experience to run the concern? Do you have ultimate managerial control over individuals with technical expertise and/or critical licenses? Do you live in a community property state?

15 15 Strategic Business Planning, Marketing and Capture Management What is Affiliation? Affiliation exists when one business controls or has the power to control or when a third party (or parties) controls or has the power to control both businesses. Control may arise through ownership, management or other relationships or interactions between the parties.

16 16 Strategic Business Planning, Marketing and Capture Management General Principles of Affiliation Stock Ownership Stock Options, Convertible Securities, Agreements to Merge Common Management Identify of Interest between individuals or businesses (family) Contractual relationships or economic dependency

17 17 Strategic Business Planning, Marketing and Capture Management Perceived Risk Factors Potential for success not demonstrated. Issue of control –is the business a “front” for another business? Owner involved in too many other ventures There are too many business partners involved. Recent change of ownership.

18 18 Strategic Business Planning, Marketing and Capture Management What Information Do I Provide to SBA? Capabilities Brief Bank Signature Card Proof of Professional Licenses 3 years of personal federal taxes 3 years of corporate federal taxes Resume Proof of Citizenship Bylaws, Operating Agreement, Articles of Incorporation Certificate of Good Standing SBA Forms Copies of bank accounts, mortage statements, deeds, etc. Financials from last three years + interims for current fiscal year Lease agreements Insurance policies Economic and Social Narratives

19 19 Strategic Business Planning, Marketing and Capture Management SBA Misconceptions The application checklist is a complete list of what the SBA is asking for and is comprehensive. The SBA welcomes you into the program vs. attempts to find fallacies in your application. Only the company is scrutinized and not the owner. Once approved, you automatically receive federal contracts.

20 20 Strategic Business Planning, Marketing and Capture Management Characteristics of Successful 8(a) Applications Over two years in business 100% owner since inception of company 51% owner has a clean background Stable management with growing and diversified revenue volume and experience serving as a subcontractor to a prime. Profitable (what is considered profitable?) Strong balance sheet Federal government demand for products and services.

21 21 Strategic Business Planning, Marketing and Capture Management Major Reasons for Denial Incomplete package and lack of response by applicant. Potential for Success was not demonstrated. Control issues detected. Affiliation issues. Greater than 70% of revenue volume with one client.

22 22 Strategic Business Planning, Marketing and Capture Management Current Trends at SBA Ten years ago, there were approximately 10,000 8(a)’s, five years ago, 8,200 and today there are 5,400. The SBA processes between applications a week between Philadelphia and San Francisco. Almost 90% of applications are returned the first they are submitted for being “Substantially Incomplete”. The average time to get approved is 4 – 6 months. The SBA has 90 days from the date an application has been deemed “Complete” to recommend or deny admittance into the program. Final determination is made by the Associate Administrator. Historically speaking, over 60% of 8(a) firms never receive ONE single contract while in the program/ Current federal contracting trend is toward strategic sourcing, which is counter to the traditional single award granted as a sole source. SBA placing a strong emphasis on approving firms that can hit the ground running.

23 23 Strategic Business Planning, Marketing and Capture Management Questions?

24 24 Strategic Business Planning, Marketing and Capture Management Road Map Consulting, LLC 1800 Diagonal Road, Suite 600 Alexandria, VA (703)


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