SBA Increase Size Standards

The U. S. Small Business Administration (SBA) has published in the Federal Register two final rules revising size definitions for small businesses in two broad industry categories and has proposed for comment another rule affecting businesses in a third category. The industry sectors affected by the two final rules are Sector 51 Information and Sector 56 Administrative and Support and Waste Management and Remediation Services. The industries covered by the proposed rule are Mining, Quarrying, and Oil and Gas Extraction. SBA increased the revenue-based size standards for 15 industries and retained the current revenue-based size standards for five industries in the North American Industry Classification System (NAICS) Sector 51: Information. SBA will review the employee-based size standards within this sector at a later date. Up to 500 additional firms will become eligible for SBA’s loan and federal procurement programs as a result of these revisions. This final rule can be accessed at: www.regulations.gov.   Final Rule: Small Business Size Standards; Administrative and Support, Waste Management and Remediation Services (RIN 3245-AG27). SBA also proposed increasing three revenue-based size standards and retaining one current revenue-based size standard in NAICS Sector 21: Mining, Quarrying, and Oil and Gas Extraction. SBA evaluated four industries in this sector to determine whether their size standards should be revised or retained. SBA will review the employee-based size standards within this sector at a later date. Up to 475 more firms in this sector would become eligible for SBA’s loan and federal procurement programs under the proposed revenue-based size standards, if adopted. Comments can be submitted on this proposed rule on or before February 4, 2013, at www.regulations.gov, identified by the following RIN number: Proposed Rule: Small Business Size Standards; Support Activities for Mining (RIN 3245-AG44). You may also mail comments to Khem R. Sharma, Chief, Office of Size Standards, 409 3rd St., SW, Mail Code 6530, Washington, DC 20416. Increases to size standards will enable some growing small businesses in these sectors to retain their small business status; will give federal agencies a larger pool of small businesses to choose from for small business procurement opportunities, and will help eligible small businesses benefit from SBA’s loan programs. As part of an ongoing review of all size standards, SBA takes into account the structural characteristics of individual industries, including average firm size, startup cost and entry barriers, the degree of competition, and small business share of federal government contracting dollars. This ensures that small business size definitions reflect current economic conditions and federal marketplace in those industries. Under the Small Business Jobs Act of 2010, SBA will continue its comprehensive review of all size standards for the next several years.

Does Your Business Have a Business Development Plan?

Common mistakes small businesses make in business development. By Mike Sabellico, Business Consultant, Orange County SBDC.

Business Development can be the single most challenging aspect facing any small business today. In a variety of industries, the competition for new contracts is significant and price points are becoming difficult to meet. Despite the federal government slashing their budget in the upcoming years, there are bright spots for small business. The reduced budgets will have a negative impact on government contracting as whole, but there might be some hidden opportunity for flexible small businesses that can provide short fused solutions. Large scale programs cut by DoD will result in immediate needs for current systems and hardware to last longer. This will create opportunities for updating, upgrading, and retrofitting existing systems and programs. There are new rules, fewer opportunities and more competition. Small businesses need to pursue new and larger opportunities, but lack the business development skills to guide them from opportunity identification to eventual capture. Here are several common mistakes made by small business when attempting to create a defined Business Development Process: Lack of any type or form of a business development plan or Process: Most small companies created a business plan when they launched and they likely had a section devoted to marketing or business development. However, this is where the planning stopped and in most cases, the business plan remains on a shelf, collecting dust and not creating new business. To survive, a small-business must build a proactive business development organization with realistic operational and tactical growth plans. These plans should be living and breathing documents that change with the environment and tactical business targets. In the absence of any defined opportunity identification and qualification process, small businesses are continually playing catch-up and find themselves responding to “pop up” opportunities which are at best long shots without any real chance of success. Sure, the business may get a win or two in this model, but there is no real process which can be replicated for long term growth.   Inconsistent customer identification and follow-up models: Most small businesses begin using the seller growth model which is based on hard work and long hours to increase revenue and identify new customers versus a consultative business approach which identifies continuities and opportunities based on risk analysis and industry trends. Small businesses which don’t transition to a proactive approach are constantly in a reactive mode, responding to customers’ plans and will find it difficult to grow and create new opportunities. Poor business development leadership and no business development staff: In small business, the strategic business development leader is often the owner or president of an organization and is the person who needs to be out working on the next deal - not trying to herd cats on the business development team. The net result can be the loss of your best business development person, a frustrated manager and an ineffective organization. Small businesses either possess good business development personnel or they don’t. I firmly believe in the saying, “you must make time to do your business and also grow your business.” Business growth is never depicted with a flat line; it’s either growing or declining. Identifying a business development person or staff is difficult and especially so, when the company leadership has minimal experience in that particular talent. When expanding the team to include a business development position, reach out to organizations like your local Small Business Development Center for assistance. Lack of understanding of their customers' buying process and needs: Many small-business development teams do not fully understand how and why their targeted customers purchase their products and or services. They neither know who the decision-makers are nor when a decision is going to be made which limits any real BD growth. Not understanding the process leaves you at a disadvantage against competitors who engage the customer early, develop relationships, obtain valuable input and influence requirements. It’s also vital to know what drives the client to choose your small business over others? If you don’t know the answer yourself, what makes you think your customer will? Trivializing client problems without asking questions and then LISTENING to their answer is a key mistake. Bottom Line: If you discover that any of these mistakes sound familiar, find a resource you can trust, like your local Small Business Development Center to fill the gaps. Growth is not a given in the current business climate and just because it got you where you are now, it might not get you where you need to go in the future.