Understanding SBE Certification for Small Business Enterprises

Key takeaways

The US Small Business Administration (SBA) offers various SBE certifications that verify your business and offer federal benefits. 

• SBE certifications include HUBZone certifications and those designed for women- and veteran-owned businesses.

• With a certification, you can access federal contracts designed for small businesses, business development resources, and federal surplus property.

• You can obtain your SBE certification to receive technical or business support, or to help you grow or scale your small business.

Discover the SBE certification process, various specialized certifications available to certain populations, and how you can benefit. If you want to develop your leadership skills, consider enrolling in the University of Michigan’s Leading People and Teams Specialization. You’ll have the chance to create your vision as a leader and learn how to manage talent to improve employee performance in as little as four weeks.

What is SBE certification?

While an official SBE certification doesn't exist, the US Small Business Administration offers various small business certifications that verify a small business and come with federal benefits. 

As the national resource for American small businesses, the SBA sets the standard for what qualifies as a small business based on size. According to the government’s definition, 99.9 percent of all businesses in the United States are “small,” totaling an impressive 33.2 million small businesses countrywide. As a small business owner, your importance doesn’t go unnoticed. About half of all Americans, or 61.6 million people, work for a small business, and small businesses generate trillions of dollars of economic activity [1]. 

While size standards differ according to a business’s North American Industry Classification System (NAICS) code, with codes assigned according to industry, the SBA considers most non-manufacturing businesses with average annual receipts totaling less than $7.5 million to be small businesses [2]. Manufacturing businesses may be “small” if they have 500 or fewer employees [2].

The SBA offers four distinct certifications to small businesses:

• 8(a) small business certification

• HUBZone small business certification

• Women-owned small business certification

• Veteran-owned small business certification

Additionally, you can register as a small business with the SBA to gain the ability to compete for federal, small business-specific contracts. 

However, even if you aren’t pursuing one of the SBA’s certifications, if you want to qualify for some state-run SBE certification programs, you may still need to meet the SBA’s national guidelines for a small business. This is the case, for example, in Texas. 

Key benefits of SBE certification for small business owners 

All of these certifications come with key benefits, such as: 

• Access to federal contracts available specifically to small businesses

• Access to business development-related resources

• Access to federal surplus property

For many, the most valuable of these benefits is the first, with the government awarding a certain percentage of all federal prime contracting dollars to small businesses within certain categories. 

For example, 5 percent of federal prime contracting dollars go to small disadvantaged businesses or those likely to obtain 8(a) small business certification. Meanwhile, 5 percent each goes to certified women-owned small businesses and certified veteran-owned small businesses, and 3 percent goes to certified HUBZone small businesses [3].

Additionally, pursuing small business certification will increase your overall credibility as a small business owner, giving you a competitive edge.

How much is SBA certification?

SBA certification is free, so businesses do not have to pay to apply to any of the available programs.

Who should pursue SBE certification?

If your small business meets the SBA's criteria, exploring the benefits of obtaining SBE certification may be worthwhile. Although you’ll need time and organization to gather the correct documentation and apply for certification, the process is often free, depending on your chosen certification, and the benefits can be substantial.

If you can answer “yes” to the following questions, you’re likely a good candidate for pursuing SBE certification:

• Does your business record average annual receipts totaling less than $7.5 million and/or have 500 or fewer employees?

• Do you want access to federal contracts specifically set aside for certain businesses and business owners? 

• Do you need technical or similar business support, touching on topics like small business accounting?

• Do you hope to grow and scale your small business in the future?

Furthermore, those who qualify for specific, demographic-based SBE certifications might seek the SBE certification opportunities most suited to their unique needs and qualifications. For example, women-owned small business certification recognizes businesses that meet size requirements and are at least 51 percent woman-owned and controlled, among other eligibility factors [4]. Similarly, veteran-owned small business certification is for small businesses with at least 51 percent veteran ownership [5]. 

HUBZone small business certification certifies small businesses located in a HUBZone or a “historically underutilized business zone.” This certification requires that at least 35 percent of the small business’s employees live within a HUBZone as well [6]. 

The government can award an 8(a) small business certification to businesses where the majority of owners are “socially and economically disadvantaged" [7]. 

Read more: Your Guide to Small Business Accounting

How to get SBE certification 

The first step in obtaining SBE certification is determining your eligibility and which certification you’d like to apply for. Each certification has unique eligibility requirements. 

After submitting your application, the SBA will typically decide on your certification within 90 days. Applying for SBE certification through the SBA is free; however, similar, third-party, non-federal small business certifications exist. These include the Small Business Administration’s approved third-party women-owned small business certifiers, such as the National Women Business Owners Corporation and the Women’s Business Enterprise National Council, among others.

Third-party small business certifications may come with fees ranging from a few hundred to a few thousand dollars. Third-party certification processes may also require longer wait times, up to eight months in some instances.

SBE certification requirements

To make the process as easy as possible, the SBA has created a small business certification hub where you can fill out a brief questionnaire that determines your eligibility for any of the available small business certifications. The certification hub also provides a “Prepare for Application” page, which walks you through the steps of preparing your application and gathering the necessary documentation based on your business type: sole proprietorship, partnership, LLC, or corporation [8].

For example, if your business is a sole proprietorship, you will need to gather the following documents for your application:

• Proof of citizenship

• IRS SS4 TIN Insurance Letter

• Most Recent 1040 Schedule C

• Other documentation (e.g., active agreements) is determined on a case-by-case basis 

Discover free resources for business owners

Subscribe to Career Chat on LinkedIn, where you can explore industry trends and access career insights. Then, check out the following resources for business owners:

• Explore emerging trends: Future-Proofing Your Business Strategy with GenAI 

• Read our Career Chat issue: How to Start Your Own Small Business: 4 Steps to Take 

• Watch on YouTube: AI for Small Business: 3 Signs It's Time to Make the Leap

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