Margarita Howard is the sole owner, CEO, and president of HX5. Under her leadership, the company has thrived within the 8(a) Business Development Program, which aims to level the playing field for disadvantaged businesses by offering them a structured pathway to grow and thrive in the competitive federal contracting arena. The experience has laid a robust groundwork for sustained success. Howard’s foresight into post-8(a) strategy is pivotal for any firm wishing to continue growing without the program’s direct support.
“Using the lessons learned and insights gained during participation in the 8(a) program is key to ensuring that past mistakes are not repeated and that advantageous insights that were gained while in the program become part of the firm’s strategies going forward,” says Howard.
Empowering Small Businesses: The 8(a) Business Development Program
The 8(a) Business Development Program, administered by the U.S. Small Business Administration, is designed to help small, disadvantaged businesses compete in the marketplace. It provides these businesses with training, assistance in marketing, and a pathway to federal contracting opportunities.
“Any business considering joining the 8(a) program must, first and foremost, familiarize themselves with the eligibility requirements,” says HX5’s Margarita Howard. “You need to be able to clearly outline your company’s objectives, identify your target market, provide a competitive analysis where possible, explain your marketing strategy, and provide financial projections.”
To qualify for the 8(a) program, a business must meet several eligibility requirements. The company must be at least 51% owned and controlled by socially and economically disadvantaged individuals who are U.S. citizens. Additionally, the business must be small according to SBA size standards, which is based on average annual receipts or number of employees. The owner must also demonstrate potential for business success and possess good character. Typically, the company must have operated in its primary industry for at least two years, although waivers can be granted under certain circumstances.
The program provides numerous benefits to its participants. One of the primary advantages is access to government contracts through set-aside and sole-source opportunities, which significantly aid businesses in entering the federal procurement market. Moreover, the program offers extensive business development assistance, including training, mentoring, and technical support to foster growth and success. The 8(a) program also includes a Mentor-Protégé Program, enabling 8(a) firms to partner with more experienced companies for guidance and competitive improvement. Additionally, 8(a) firms can form joint ventures with other businesses to compete for larger contracts, further expanding their capabilities.
The 8(a) program spans nine years, divided into a four-year developmental stage and a five-year transition stage. During this period, businesses are expected to become more competitive and independent. Participants must comply with program regulations and are subject to annual reviews to ensure they meet criteria and progress in their business development.
Upon graduating from the 8(a) program, businesses are anticipated to continue competing in the federal marketplace without the program’s assistance. The experience, skills, and relationships developed during the program are intended to help these businesses sustain growth and achieve long-term success.
“One of the most important things that should be done before the 8(a) graduates is to create a postgraduation comprehensive business strategy that outlines the goals, target markets, growth plans, and strategies for sustaining the company’s success once it graduates,” says Margarita Howard.
Margarita Howard’s Post-8(a) Strategy for HX5: Building on Established Foundations
Howard has cultivated a business model that leverages the strengths developed during the program to ensure HX5 remains competitive. She says, “It’s critical that the firms who are approaching graduation focus on diversifying their revenue streams to reduce dependence on sole-source 8(a) set-aside contracts. This diversification is a requirement while in the program, but once the firm graduates, it’s even more important. The firm needs to explore and secure new non-8(a) opportunities through subcontracting, teaming agreements, and other avenues to ensure that once the firm graduates, it’s not so dependent on the 8(a) work that it cannot survive outside the 8(a) program.”
Upon graduating from the 8(a) program, it becomes increasingly essential for the firm to leverage its past performance and relationships. It should use the experience and connections developed during the 8(a) program to its advantage. Building a portfolio highlighting the firm’s track record of success while in the program, showcasing examples of customer satisfaction and high-scoring past performance evaluations, is essential for marketing to the government and companies where subcontracting opportunities may arise. Additionally, the firm should maintain strong relationships with government agencies, prime contractors, and industry partners it has previously worked with to access new opportunities that may develop once it is out of the 8(a) program.
Margarita Howard says, “Even though the firm has graduated from the program, the SBA still provides various resources and support to graduates of the 8(a) program and the graduating firm would be wise to continue maintaining its relationship with the SBA and take advantage of the post-graduation support and resources provided by the SBA, which can take several forms such as networking events and mentorship opportunities, for example. Seeking guidance from experienced mentors or advisers who had firms in the 8(a) program and graduated can provide valuable insights and advice based on their own experiences postgraduation.”
One critical component of Howard’s strategy is the continued investment in technology and staff training, ensuring that HX5 stays ahead of industry trends and maintains its reputation for excellence. “We have built a team of advisers that specialize in the government industry, in the government field,” says Howard. “So, we keep a team of advisers to help us with the more complex matters, whether it’s a legal team, a CPA team, or auditors, those are the types of external advisers that we count on for their subject matter expertise and knowledge they’re part of our business model.”
Margarita Howard’s vision for HX5 involves leveraging the firm’s established credibility and track record to secure more comprehensive and technically complex contracts. Furthermore, the company plans to expand its presence in emerging markets and technologies, including cybersecurity and artificial intelligence, sectors that are pivotal for national security and public welfare. This forward-thinking approach aligns with federal priorities and opens new avenues for growth and collaboration.
