Indiana has launched a new Indiana Small Business Program, and the practical question for owners is simple: does your company clear the bar, and can you get counted in state purchasing? The program, announced by Gov. Mike Braun, expands the existing Buy Indiana initiative so more Indiana businesses qualify to receive points in the procurement process. Per Building Indiana Business, the state's stated aim is to increase the volume of goods and services it buys from Indiana-based small businesses.
The bar is concrete. To participate, a business must generate no more than $10 million in annual gross receipts, averaged over the last two years, and meet at least one of four Indiana-tied criteria. If your company fits, the next step is the program application through the Indiana Department of Administration (IDOA), which also runs the technical assistance the state says it will provide. This connects to our earlier piece, Which Parts of a Business Plan Investors Actually Read.
State procurement — the process by which government agencies buy goods and services — can be a steady revenue channel for a small operation. This piece walks through the eligibility test, the application path, and what changed in Indiana's contracting rules this summer.
Does your business qualify?
Qualification has two parts, and both must hold. First, the size test: annual gross receipts of no more than $10 million, averaged over the last two years. Pull your receipts for the two most recent years, add them, and divide by two. If that average exceeds $10 million, the program is not open to you.
Second, the Indiana-tie test: the business must meet at least one of the following, per Building Indiana Business:
- Be registered as a domestic business with the Indiana Secretary of State.
- Pay a majority of its payroll, in dollar volume, to Indiana residents.
- Employ Indiana residents as a majority of its employees.
- Make significant capital investments in Indiana.
Run the payroll test before anything else if you are unsure. It is a dollar-volume check, not a headcount check, so a company with a few highly paid out-of-state staff can still pass if most payroll dollars go to Indiana residents. A company that fails payroll but is registered as a domestic business with the Indiana Secretary of State may still qualify on that criterion alone.
How do you get into the program?
The state directs interested businesses to the IDOA website for program information and application instructions. Treat the application as a documentation exercise: each criterion you claim needs a paper trail behind it.
- Confirm the receipts average for the last two years stays at or below $10 million.
- Identify which of the four criteria your company meets, and gather the supporting records — Secretary of State registration, payroll summaries, employee residency counts, or capital investment records.
- Apply through the IDOA website, following its instructions.
- Use the technical assistance, training and programming the state says it will provide to participating businesses to understand the procurement process.
That last step matters more than it looks. State contracting has its own vocabulary and timelines, and the state is explicitly offering help to navigate it. The program's stated purpose is not just to list qualified vendors but to "strengthen their ability to compete for state contracts," per the announcement carried by Building Indiana Business.
What changed with Buy Indiana?
The new program works through expansion of the existing Buy Indiana program. Under the expansion, more Indiana businesses will qualify to receive points in the procurement process — meaning the scoring agencies use when they evaluate bids. More qualifying companies means more bids that carry those points, which is the mechanism the state says will raise the volume of state purchases from Indiana small businesses.
"State procurement can be a valuable pathway to growth for Indiana's small and entrepreneurial businesses, and creating meaningful access to those contracting opportunities can help more of them compete," said Vanessa Green Sinders, president and CEO of the Indiana Chamber of Commerce, in the announcement. The Chamber added that it looks forward to evaluating how the program works in practice as it is implemented.
Lisa Hershman, Indiana Secretary of Management and Budget, framed the design goal as "a program that is practical for businesses, workable for agencies, and delivers value for Hoosier taxpayers."
What happened to the old contracting preferences?
One prior pathway is gone. Gov. Braun announced in July that Indiana will end race- and sex-based contracting preferences. That followed a legal opinion from Attorney General Todd Rokita finding that race- and sex-based contracting preferences in the M/WBE components of Indiana's Diversity Business Enterprises Program are unconstitutional under the Equal Protection Clause of the Fourteenth Amendment.
The practical consequence: a company that previously competed under those preference components now competes under the new small-business framework instead. Indiana's Veteran Owned Small Business Program remains in place and is unchanged, per Building Indiana Business. Veteran-owned companies should check whether they qualify under that program as well. Readers following this should also see Buying Instead of Building: How Entrepreneurs Acquire a Business.
What this means for a small operation
For an Indiana company under the receipts cap, the calculus is straightforward. The state buy is a defined customer with published processes, and the new program lowers the scoring disadvantage for small Indiana vendors. The cost of entry is mostly administrative: confirming eligibility, assembling records, and completing the IDOA application.
The open question is execution. The Chamber has said it will evaluate how the program works in practice, and business experience is meant to inform its continued development. Early participants will be the ones who find out whether the points translate into awards. Check the IDOA website for current application instructions before you commit staff time.
