If you have never heard of HUBZones and have no idea why you should even care, keep reading for a mini crash course. Although getting in bed with the government isn’t always a good thing, in this case, it could be beneficial for you and your business.
What is HUBZone Exactly?
HUBZone is an acronym that stands for Historically Underutilized Business Zone Initiative. It’s a program put into place by the U.S. Small Business Administration as a way to breathe life into rural and urban communities, including Indian reservations, that suffer from high unemployment rates and low incomes.
The program encourages small businesses to establish themselves in these distressed communities and offers contracting assistance to those businesses in exchange for their trouble. This is done in an effort to stimulate economic development and capital investment in these communities as well as promote job growth. It allows these disadvantaged communities federal procurement opportunities through preferred businesses that are HUBZone certified.
The goal of this initiative is to give HUBZone certified small businesses a portion of all federal contracting dollars. This works out to about three percent every year. However, there are some criteria a small business must meet in order to qualify.
Qualifying for HUBZone Certification
To be eligible for the HUBZone program, your business must:
- Be considered a “small business” according to the SBA’s standards. To help you determine whether your business meets this standard, you can visit the SBA’s website and utilize their size standards tool.
- Be operated and owned by a Community Development corp, U.S. citizens, a Native Hawaiian org, an agricultural cooperative, or an Indian tribe, with a controlling 51% interest in the business.
- Employ at least 35% of staff who have a place of residence located in a HUBZone.
- Have a primary office location within a HUBZone. This is a location where the bulk of your employees work. This can include locations established in what some might call Indian country, and businesses established in military facilities that have been closed as a result of the Base Realignment and Closure Act.
Why You Should Care
There are benefits to operating in a HUBZone. Companies that meet HUBZone certification requirements are positioned with a competitive advantage in winning contracts from the federal government. According to the SBA website, businesses receive:
“Competitive and sole source contracting and 10% price evaluation preference in full and open contract competitions and subcontracting opportunities.”
The reality is that at present, the United States government is dumping cash into HUBZones, giving them more cash to spend than they have qualified vendors to spend it on. Taking the steps to become HUBZone certified is an extremely lucrative investment. So lucrative in fact, that some businesses are even taking steps to move their already established principal locations to a HUBZone, in order to qualify.
The process for getting HUBZone certified isn’t too complex, but it can take around 90 days, so if it’s something that might be good for your business, the sooner you begin the process, the sooner you can begin capitalizing on the benefits. You can read all about the HUBZone program and find instructions on applying to be certified by visiting the SBA’s website.
If you are interested in obtaining HUBZone certification for your small business, our District Offices Farragut location in DC is HUBZone qualified. Contact us today to schedule a tour and learn more about the benefits of certifying and operating your small business from a HUBZone.