Small Business Preference

Small Business Preference

Small business is responsible for many of the job opportunities that exist in the United
States. Therefore it becomes imperative that the small problems be given a preference when it

SMALL-BUSINESS PREFERENCE 2
comes to certain matters in business. The Congress decided to come up with an initiative and
passed specific laws that saw the incorporation of small business compete effectively with the
large corporations for the business space. The small business act of 1953 states that a fair
proportion of the federal contacts should go to the small business. Also congress set aside
23% of the contracts to go to small business while 5% would go to small disadvantaged
groups. Additionally another 5% would go to women owned small business and the last 3%
would go to historically neglected business zones. The small Business administration is in
charge of all the above programs as permitted by the congress law (Calof, 2006).
The small set aside program is one of such programs implemented by small business
administration. It is one of the most suitable socioeconomic programs that have been put
forward by the Unite state. For example, only small business is eligible for contracting under
such a program. Big business and firms who might have applied for the same contract are
rejected since they do not meet the required set standards by the program. A business is
considered to be small when it does not have more or close to five hundred employees and its
revenue is way beyond $ 7 billion annually. Additionally the small business under this
program are much likely to benefit from subcontracting as they are able to cut down or
reduce on the costs required in the purchasing of certain items (Dachis,& Lester n,d). For
example they are only required to cater for 50% of the total cost making it more favorable for
them. In this case such a program provided will enable small companies to be able to
contracts without fear of competition from the big companies such as Lockheed Martin
The second congress plan that favours small business is referred to as small
disadvantaged business. The rules that fall under this category essentially lock out most of the
large multinational countries. For example it requires that the business be identically small as
put across in the small business acts and by the small business administration. Also it requires
that the business be about 51% owned by the individuals who are socially disadvantaged in

SMALL-BUSINESS PREFERENCE 3
this case refereeing to either one being black American, Hispanic , native American or east
pacific American (Maher, 2015). Furthermore, it classifies the disadvantage as either being
physically handicapped in terms of gender or age and lastly that the net salary is less than $
750,000 which categorically fits into the company I intend to model. Additionally such a
program is provided if only you fall under specific categories as outlined by the law. In this
case, the contract would fall under the transportation system.
The service disabled veteran program is the last law that exclusively falls within the
scope. First I qualify because I am already a disabled veteran. The awards in this case are
made at a fair market price and the contracting officer ensures that at least two or more
service disabled officers can raise the required amount. A contract can also be awarded on a
solo basis if the contracting officers realises that no two service disabled officers can raise the
required amount to be given the contract. Basically, the contract has same features as the
Historically Underutilised Business zones.
The above three laws shows the difference between small business and large business.
It also shows the opportunities that are presented by the preference programs. Large
companies are those which have a great number of employees and can therefore be
comfortably be able to raise more revenue in this case greater than $7 billion. Because small
programs cannot raise such revenues that are provided by an equal opportunity to be able to
compete effectively in the market. The small preferences programs that have been put across
reduce the monopoly that is normally a practise of the large corporations. The awarding of
the specific contracts as seen from the above features follows strict management policy. A
contract is only given to the small business provided it meets the set criteria that have been
established by the various laws. Each contracting officer is required to follow the laid down
stipulations in following the laws and if a small business is not identified in the process the

SMALL-BUSINESS PREFERENCE 4
contract is given to two small business owners who come together to join their business and
raise the required funds.
In conclusion laws that have been enacted by congress promote an equal chance for
competition between the small companies and the established large incorporation. Since
majority of the people in the United States have smaller business the law serves to protect
them against monopoly that is commonly associated with the large corporation. Lastly it is
only fair enough for the small business to be protected to avoid their extinction in the market
and also since they contribute to more jobs in the United States.

References

SMALL-BUSINESS PREFERENCE 5
Calof, J. (2006). ANALYSIS OF SMALL BUSINESS OWNERS’ FINANC
PREFERENCES. Journal Of Small Business & Entrepreneurship, 3(3), 39-44.