Getting a government contract for your small business could be a huge opportunity to grow in so many industries. They offer stability, consistency and, most importantly, money for your company.
The financial risk is generally low and can be a profit increase that betters your business for years. Although the opportunity is great, actually getting a government contract for a federal project can be difficult and time consuming. Follow some of these guidelines to get you started:
Steps to Get Government Contracts: How to Start
- Before you fully commit to the idea of bidding on a government contract, you first need to complete a few steps. First, you’ll need to make sure your company can be defined as a “small business” in the government’s terms. These guidelines will vary depending on the industry you’re in and determine what code your business falls under from NAICS, and match it to the Size Standards Table.
- Next, you’ll need to get a D-U-N-S number. It is used to determine the reliability of your business and financial stability. It’s free to get your DUNS number, so there is no need to purchase anything else through Dun & Bradstreet, unless you wish to. You can get the number as quickly as in one day, but it is needed to register your business with the government.
- Then you will take your DUNS numbers and register your business in the System for Award Management. SAM is basically a database for any government agency that is searching to fill a contract and businesses who are seeking government contracts. It’s basically like the job board for government contracts and can even be used as a type of marketing for your business because you fill out a company profile for free. This step automatically adds your business to the database, called the Dynamic Small Business Search (DSBS), for contractors to find your business.
- Finally, try to have a general idea of what you’re getting yourself and your company into. The U.S. Small Business Administration has a learning center dedicated to government contracting information. Look for opportunities on the Federal Business Opportunities (FedBizOpps) listings.
Helpful Tips for Securing Government Contracts
After you’ve completed the necessary steps to register your business officially to be eligible for contracts, the hard part is actually getting them. Here are some general tips for bidding on federal projects that require government contracts:
When there is an opportunity for the government to contract work (which is often) you want to be ready to bid on it. Keep yourself up-to-date on current events that can affect work for your business locally or nationally. For example, FEMA offers contracts for disaster relief, so when a hurricane, tornado or other disaster is headed for our country, you want to be ahead of it and ready to help.
The government entity is typically more old-school and small business owners are usually entrepreneurial by nature. The government work you have the chance to be contracted for needs to be completed quickly, efficiently and effectively. If you’re using the latest and greatest technology, it probably doesn’t matter as long as you’re completing the task well.
Build a Foundation
When you decide to start working on federal projects, start small. Your track record means a lot to win a bid, so start with projects that are lower amounts and work your way up. You don’t want to take on a project that is too much for your business at once because it could ruin your reputation.
Focus on Specific Agencies
The Small Business Association (SBA) ensures that a certain amount of federal contracts are given to small businesses every year. This can work in your favor. For example, some of the goals for federal executive agencies include: 23 percent of prime contracts should go to small businesses, 5 percent of prime and sub contracts should go to women-owned businesses, and there are even goals for veteran-owned businesses. Do your research on agencies using the Federal Procurement Data System and see which ones didn’t meet their small business goal amount last year and capitalize on that opportunity.
Keep your website updated and make sure your social media (if you use it) has posts that are recent and relevant. If you aren’t currently using any SEO strategies, you might want to start so that your small business will be more visible for government agencies looking to hire you for a project.
It will take time to get a government contract, sometimes even months. It’s important to remember that the pay off you could possibly receive might be months or years of consistent, well-paying work however, so you’ll need to exercise a lot of patience and diligence.
Sometimes it can be hard to wait to get a profit so large and the government payment terms could be long. At the start, this could be a potential problem for you to purchase new equipment or meet payroll. Government factoring might be a great option for your small business to be able to take on government projects and grow your business.