Skip to main content

Top 5 Reasons to Do Business with a HUBZone Company in the Federal Market

Author: Tim Hagerty / CEO

Businesses in areas that have been designated as part of an underutilized business zone struggle to compete with large businesses or even other small businesses. They often face low incomes and stiff competition in order to survive.

HUBZone provides small businesses an advantage to cross the threshold into success or improve even more if they’ve managed to beat the odds.

However, having HUBZone certification may not be enough to ensure that these small businesses are able to survive.

Here are five benefits to doing business with a HUBZone business that you should consider either as an independent consumer, business owner, or a contracting officer.

What Is HUBZone?

First of all, it helps if you understand what makes a business a HUBZone business.

HUBZone stands for Historically Underutilized Business Zone. This is a special federal program set aside for the specific purpose of helping businesses that lie in zones that are considered economically underdeveloped.

That means that if the business is located within an area which has low income rates and low employment percentages, it may be eligible. It’s one of the great programs intended to improve those two categories, plus spur general economic growth in areas with great opportunity while using economic development to strengthen the community.

How Do I Know Which Businesses Are in the Zone?

The Small Business Association (SBA) provides a search for various businesses that meet different certifications, whether that be a woman owned business, veteran owned business, minority owned business, or HUBZone business. You can find that search right here, which will make it easy for you to find diverse businesses that could benefit from your assistance.

Another option is the U.S. General Services Administration’s schedule, which can help you to locate suitable business as well.

The SBA has created a map available that designates which areas are eligible for coverage based on location. It provides information on why each area has been designated as a HUBZone and offers a few different views to help with comprehending the map, if you are interested in which areas fit this criteria.

Also, the map is printable or shareable. You can access the map through the SBA here.

Finally, provides a variety of information on contracts and services and you can find out information on contracts and opportunities through their Contract Services (formerly called Fedbizopps). As the federal government dedicates 3% of their contracting dollars to HUBZone certified businesses, you may find opportunities to support these businesses using the information available there.

What Criteria Makes a Business HUBZone Eligible?

Some additional details to consider when understanding HUBZone businesses are the requirements they need to meet in order to become certified.

These are qualifications required in order to apply for HUBZone:

  • They must meet the SBA standards to be qualified officially as a small business
  • The organization must be run and owned by over 50% U.S. citizens, a Native American tribe, an agricultural cooperative, or community development corporation.
  • At least 35% of their employees must live within a HUBZone
  • The main office must also reside within the HUBZone

Five Top Reasons To Do Business With a HUBZone Company

Here are some reasons why you may wish to do business or enter a contract with a HUBZone business, in no particular order.

Reason 1: Helping Build a Community

Small business is important to the economy in many ways and it’s important that these businesses succeed and grow because they are included in areas that are suffering. If these bottom areas improve, it improves our economy as a whole.

  • HUBZone small businesses provide much needed jobs in low socio-economic communities, which can help raise that community’s economic level which is a benefit to everyone.
  • The taxes collected by these businesses feed back into those communities, improving the overall situation and helping their schools, police, and other important organizations.
  • Small businesses are a significant component of community growth and identity. By supporting them, you are also helping to shape the identity of those people and their society, especially as these businesses grow.

Reason 2: Unique or Unusual Services

Small businesses are typically innovating out of necessity. That means you may be able to find goods or services that you cannot find anywhere else!

Investigate these businesses and check out their product spreads. You may be surprised at the creative and unusual items you can find in some smaller, rural businesses.

They can make fantastic gifts or collectors items and you are likely to find many hand-crafted or home-made items as well.

Reason 3: Better Prices

While small businesses that offer products that can be found in large chain stores may find it difficult to provide you with a price that can compete with those companies, there are other options where you may be able to find bargains, particularly in services.

As it is very important for small businesses to build relationships and acquire contracts, they may be willing to offer you a better bid for a service than what you will find via a large contracting agency.

As there are many options for HUBZone businesses that provide a similar service, you have the opportunity to shop around and find a deal that will fit your budget while also helping the small business to build a name for itself and demonstrate the quality of its work.

Reason 4: Tax Benefits

There are many nonprofit organizations and charities that are designed to help small businesses to succeed, especially those that face adversity because of diversity or low-socio economic disadvantages.

By donating money to these services, everyone benefits. These organizations meet their goals, the businesses they help improve and flourish, the economy grows, and you can claim the donation as a deduction on your taxes.

It’s a win all around the board, plus you have the added benefit of helping businesses grow, which trickles down to benefit many others.

Reason 5: Warm and Fuzzy

If nothing else, there’s always that great feeling you get by helping those in need. If a small HUBZone business offers an item you want, why not get it from there instead of a large corporation or online retail giant?

Along with your purchases, you get the bonus of knowing that your choice made a difference in helping others, providing a small business a better chance of success, which in turn provides those much needed jobs and helps a struggle community to improve, which in turn improves the general economy, which comes full circle back to you in a variety of ways.

Pay-it-forward by supporting a HUBZone business; you won’t regret it!

Until next time,
Tim Hagerty CEO / Founder