9: Small Business Certification

Maryland, like most states, has a program for certifying small, disadvantaged and minority-owned businesses. The main reason to pursue these certifications is qualifying for state-funded projects that set-aside a certain portion of the fee for certified firms. State projects that establish these small or minority contracting goals can range from nominal participation (e.g. 10% of the design fee) to 100% participation.

I applied for certification as a Maryland Small Business Enterprise (SBE), which comes with the following requirements:

• A firm must be a small business as defined by the U.S. Small Business Administration (SBA)
• The firm’s average annual gross receipts as defined by SBA regulations (averaged over the previous three fiscal years or part of the year which the business has been in existence), can not exceed the amount set forth in 49 CFR 26.65
• The firm’s average gross receipts cannot exceed the overall USDOT size standard for a small business ($26.29 million averaged over the three previous fiscal years or part of year which the business has been in existence).
• At least 51% of the firm’s ownership must be held by individuals who meet the personal net worth (PNW) cap of $1.32 million as prescribed by 49 CFR 26.67
• A firm must be organized for profit in order to be eligible for SBE certification.
• The 51% owner must be a U.S. Citizen or Permanent Resident.

Since I'm just starting out with the business, I easily meet the limitations for firm receipts.

The application process took around 4 hours, the bulk of which was completing a personal net worth assessment and providing proof of accounts, assets, debts, etc. Not exactly thrilling work, but hopefully leads to some good project opportunities down the road!

Resources Used Today:

• Maryland Small Business Enterprise (SBE)