First Things First – What is a HubZone?
The term HUBZone is short for a Historically Under-utilized Business Zone. HUBZone is a program set up by the US Small Business Administration for small businesses that operate and employ people in these areas. The federal government’s goal is to award at least 3% of all federal contracting dollars to HUBZone-certified small businesses each year. To entice businesses to become certified HubZone companies, the Federal Government provides many benefits and incentives to those businesses.
Which Areas are Designated Hubzones?
Check out the Hubzone map. Bookmark this link!
Signs that Your Company Should be a Hubzone
What are some good indications that your business should consider becoming a Hubzone company:
- Your company is already working in Federal Marketplace as a contractor or subcontractor
- You are establishing a very small business (easier if you are a company of 1 to 10, but not impossible if you are bigger)
- You live and work near a Hubzone (although not necessary)
- Most of your overhead staff is part-time
How to Become a Hubzone Company
Step 1: Establish your Primary Office in a HubZone
In Hubzone terms, your primary office does not have to be your official company headquarters, but it does have to be your office with the largest number of people working there.
Two Money-saving tips:
- Find a co-working space in a Hubzone as use that as your initial primary office, especially when your company is small (less than 10 people.)
- Allow your overhead staff to have the flexibility to work from home. Fewer people in the office per day means you can rent a smaller primary office. Less rent equals more money where you really need it.
Step 2: Hire Hubzone employees
In order to qualify as a HUBZone company, 35% of your workforce must be HUBZone employees. To determine how many Hubzone employees you will need to qualify, take the total # of employees you currently have and multiply it by 35%. So if you have 100 employees, you would need 35 of those employees to be HUBZone employees to qualify and maintain your HUBZone status. And remember, according to HUBZone guidelines, a person must work a minimum of 10 hrs a week in order to be considered an employee. Then of course you must do the regular employee vetting, such as putting candidates through drug testing in Mesa AZ, or wherever you are based, to ensure they are safe to do the job, just as any other employee.
Next, determine if you have any employees who currently live in a Hubzone. If so, that’s great news and will make this process even easier. If it proves too difficult to find contract staff who live in a Hubzone, focus on hiring people for 10 hours a week to help with business functions, such as:
- Office admin support: running errands, getting mail, ordering supplies, etc.
- Recruiting Help: sourcing, resume formatting, keeping your ATS up to date, screening phone calls
- Social Media: we recommend hiring a marketing college student for this
- Business Development Support: research, tracking opportunities
- Payroll/TimeKeeping: timekeeping is a lot of work in government contracting–keeping up with all those codes, making sure everyone completes them on time, etc.
Other great Hubzone recruitment tools are joining and posting on neighborhood-focused social media such as Facebook groups, local neighborhood listserves, email groups, community-focused apps, like NextDoor. Also, reach out to local students and friends to see if they know someone.
Finally don’t forget to ask your current Hubzone employees if they have friends interested in working for the company!
Bonus facts that make Hubzone program great:
- A law recently passed that once a Hubzone employee who works for you moves out of a Hubzone to a non-Hubzone area they still count as Hubzone employee for the life of their employment with your firm. Woohoo! Here is a link to that and all of the SBA changes that will go into effect on December 26, 2019, all of which are designed to benefit small businesses seeking HUBZone certification.
- College students count according to where they live and not their parent’s home address. You will need a piece of mail to show proof of address. Many colleges and surrounding areas are Hubzones.
Step 3: Prepare Docs and Apply
- Review the checklist provided by the SBA and gather all required documents
- Submit your application
- Answer any follow-up questions they have
Plan for the whole process from start to finish to take approximately six months.
Now You’re a HUBZone Company!
After you qualify, don’t forget to update SAM and make sure your customers and partners know you are now a Hubzone certified company! Congratulations!
