Eyeing a HUBZone? STORE That Status

Locating in "historically underserved business" areas, referred to as HUBZones, has its advantages. The government allots 3 percent of its procurement shelling out for smaller businesses that call them home. However the HUBZone designation bestowed on these economically troubled areas can transform quickly, depending on a number of outside data sources like the Bureau of Labor Statistics and the U.S. Census.

This place-based status can leave companies who depend on this preferential usage of federal contracts with uncertainty about whether they’ll qualify later on.

Shelly Fitzgerald really wants to setup her new manufacturing firm as a HUBZone business to vie for federal contracts.

That is the quandary before Shelly Fitzgerald, the co-founder of Bosh Global Services, a Newport News, Va., company that supplies communications services for unmanned operations. She’s hoping to start out a manufacturing company that employs older ladies in the Newport News area who out of financial need must go back to the workforce. She plans to launch with a HUBZone designation. "It opens doors with that sort of work. I’ll be in a position to compete for more contracts," she says.

To be looked at for HUBZone status, your small business should be principally located within a HUBZone — that’s, your office with the biggest number of eemployees ought to be situated in one — and must hire a workforce where at least 35 percent of employees have a home in a HUBZone.

The way the ‘Little Guy’ Can Partner With Big Companies

But if a location loses the HUBZone designation, there is nothing the federal government can do, says Mariana Pardo, deputy director of the office of HUBZone. "There’s no section of the law that says we are able to grandfather you in," says Pardo, speaking at a panel discussion on federal procurement through the National SMALL COMPANY Week events in Washington, D.C. "We’re not considering that authority in regulations."

Mariana Pardo, deputy director from the office of HUBZone (pictured in middle) offered tips for how to maintain HUBZone status at a National Small Business Week event.

But, Pardo adds, companies can mitigate their likelihood of losing that designation. Listed below are three ways to land a HUBZone designation and keep it:

1. Make being truly a HUBZone business important. "Rather than saying, ‘X is what we do and what we are,’ say, ‘We certainly are a HUBZone business and X is what we do and who we have been,’" Pardo told Entrepreneur.com. By saying that your business really wants to encourage economic development within an area, you’ll attract individuals who share that goal. Not merely will you be in a position to better recruit individuals who reside in HUBZones, knowing your organization focus, some employees could be more willing to proceed to one as part of the job.

2. Hire workers who have a home in HUBZones. To be eligible for contracts beneath the HUBZone designation, a company should be principally located within a HUBZone and at least 35 percent of a company’s staffers must reside within a HUBZone. To make sure that you continue to meet up those criteria even if employees leave the business, they move away or a location loses its HUBZone designation, be sure that a lot more than 35 percent of workers reside in HUBZones. Pardo says that ideally, 45 to 50 percent of employees will have a home in a HUBZone. Pardo suggests possibly giving some employees a housing subsidy for moving to a HUBZone if you need to.

3. Create shop in several HUBZone location. Since HUBZones can lose their status, consider establishing shop in several HUBZone. That way, if one location suddenly doesn’t qualify, you can shift employees around to make sure that you retain your status. "They could still be in a position to claim another location as a principal office," says Pardo.

For more on the HUBZone program also to visit a map indicating eligible locations, check out the SBA’s website. Pardo also recommends contacting your neighborhood economic development agency.

What’s your very best advice for would-be federal contractors? Share your ideas and exchange views in the comments below.

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