What is Certification of a Small Business?
Certification of a small business is a review process that gives formal acknowledgment that the business is owned and operated by a qualifying person, which is under represented in an industry. Not all businesses can receive certification.
What is the Main Criteria For Becoming Certified?
- The business must be independently owned and operated,
- Must be organized for profit, and
- Is not dominant in its field or industry.
To become certified, the business must also meet the definition of “small business” according to the SBA’s standards. This varies depending upon the industry.
What is the Definition of “Small Business?”
The SBA’s published industry guidelines for 2008 are:
Manufacturing: Maximum number of employees may range from 500 to 1500, depending on the type of product manufactured;
Wholesaling: Maximum number of employees may range from 100 to 500 depending on the particular product being provided;
Services: Annual receipts may not exceed $2.5 to $21.5 million, depending on the particular service being provided;
Retailing: Annual receipts may not exceed $5.0 to $21.0 million, depending on the particular product being provided;
General and Heavy Construction: General construction annual receipts may not exceed $13.5 to $17 million, depending on the type of construction;
Special Trade Construction: Annual receipts may not exceed $7 million; and
Agriculture: Annual receipts may not exceed $0.5 to $9.0 million, depending on the agricultural product.
What Types of Certifications Are Available?
- Minority Owned Businesses MOB (also called MBE for Minority Business Enterprise)
- Women Owned Businesses (WOB) also called WBE for Women Business Enterprise)
- Small Disadvantaged Businesses (SDB) or Disadvantaged Business Enterprises (DBE)
- 8(a) Designation
- HUBZone Business Enterprises (HUB)
- Disabled Veteran Businesses (DVBE)
Who Certifies Businesses?
The SBA does not certify businesses. Certification agencies have their own individual procedures and processes, but all conform to certain government and private sector standards. Certification agencies will only certify businesses that meet certification criteria according the SBA’s standards and definitions.
