Attracting clients can be one of the primary challenges faced by small businesses. Potential partners may have concerns about your company’s small size or lack of experience. Of course, one of the best way to prove your competence is by successfully fulfilling contracts. Tweet This It’s a vicious cycle that can hinder your business’s growth.
Fortunately, many large corporations and government agencies have supplier programs geared toward providing opportunities for small businesses – especially those owned by members of traditionally disadvantaged groups. Business owners who don’t qualify based on their gender or race may still benefit from some programs if the company is based in an economically depressed area.
While there’s no guarantee that a qualified small business will win a contract, pursuing these deals can be lucrative for companies eager to grow.
Small Business Certifications
Many corporations and government agencies require that you obtain a small business certification prior to bidding on contracts set aside for such enterprises. This is meant to help avoid fraud and ensure that opportunities are going to the right firms. Small businesses seeking contracts from the federal government can self-certify when registering on the System for Award Management (SAM), so long as they meet standards set forth by the U.S. Small Business Administration.
Additionally, small businesses owned by women or members of minority groups can seek certification from third-party organizations like the Women’s Business Enterprise National Council or the National Minority Supplier Development Council. Businesses in economically depressed areas should investigate both the 8(a) Business Development and HUBZone programs. Requirements vary, so pay close attention when filling out your application materials.
Once certified, small businesses can begin to look for corporate and government contracting opportunities like those discussed below.
AT&T: An Early Believer in Supplier Diversity
AT&T founded its Global Supplier Diversity Program in 1968, and many minority-, women-, and veteran-owned small businesses have enjoyed the benefits of working with the telecommunications heavyweight. The company spent almost 24 percent of its 2012 procurement funds with such businesses. Through its Prime Supplier Program, AT&T encourages its top suppliers to develop plans and track achievements related to improving diversity among subcontractors. The number of suppliers who participate in this diversity program is growing, having jumped 33 percent from 2011 to 2012. Interested businesses should click on the link above to learn about specific requirements.
Johnson & Johnson: Nearly $1 Billion Spent with Small Businesses
Since 1998, Johnson & Johnson has sought to increase the number of diverse and economically disadvantaged suppliers among its partners. It established a Corporate Office of Supplier Diversity that works in concert with subsidiary companies to meet diversity goals, and nearly $1 billion in contracts have been awarded since the program’s inception. Johnson & Johnson includes HUBZone-certified businesses in its diversity goals. Visit the registration page to learn more about the Johnson & Johnson Supplier Diversity Program.
Abbott: Partner with a Healthcare Leader
A pharmaceutical and healthcare juggernaut, Abbott spent $1.6 billion with small and diverse businesses in 2013. Small businesses are eligible to participate in the supplier diversity program regardless of whether or not the owner belongs to a traditionally disadvantaged group. Women-, minority-, and veteran-owned businesses are encouraged to participate, but no independent certification is required. Abbott also keeps track of its prime contractors’ diversity efforts, requiring quarterly reports to be filed by the top 100 suppliers.
Federal Government Opportunities
The United States government is the world’s largest consumer, with an annual procurement budget of about $500 billion. The government has a goal of awarding 23 percent of prime contracts to small businesses, so there are plenty of opportunities for qualified companies. In addition to the 8(a) and HUBZone programs previously mentioned, Service-Disabled Veteran-Owned Small Businesses (SDVOSB) and Women-Owned Small Businesses (WOSB) each enjoy special consideration for some federal government contracts.
Getting a small business off the ground is rarely easy, but you’re not alone. With research, filing paperwork, and a bit of luck, you may find a lucrative partner willing to offer an opportunity to help you grow both your business and bottom line. Check out our full list of Fortune 100 companies with supplier programs.
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