Government contracts are a hotly-debated topic among small business owners. Some people swear by them and some have sworn them off completely. Rather than asking whether or not they’re objectively a good thing for a business, you need to be asking whether they are a good thing for your business and how to get government contracts. To make them work for you, you need to be prepared and know exactly how to win government contracts for small businesses.
Why Should You Try for Government Contracts for Small Business?
The majority of federal contracts go to big businesses, but 23% of funding is allocated for small businesses. That’s still approximately $80 billion that you can go after. These contracts are for everything from high-tech devices to laundry services to research and consulting. Unlike in the private sector where the size of a deal can be unclear until quite late in the bidding process, you know exactly how much the government has allocated for each contract so there’s no wasting time proposing to a client who wants to pay peanuts. Additionally, you can be sure that the government will continue needing goods and services for a good long time. This means that once you’ve completed the arduous application process, you’ll be set up to bid more easily the next time around and start growing your piece of the pie.
Why Doesn’t Everyone Do It?
If government contracts are such a boon, why isn’t every entrepreneur a government contractor? Of course, the government doesn’t actually need every product or service available on the market. But for many people, the application procedure is the real obstacle. The long, complicated, and exacting process intimidates many business owners who offer or could offer things that government needs every day. There are a few things that keep people from applying for and winning government contracts:
The application process for getting your first government contract is long. The paperwork can seem endless and there are a lot of steps. For a first-time applicant, even figuring out how to apply for government contracts is a big time investment. For many business owners, this can seem like a big risk for something that may not pan out. Even if you manage to navigate the system and apply correctly, time still plays a role. The ability to work to tight deadlines and stay on schedule is an important part of getting government contracts.
Applying for a government contract is just the first step. Because these are often well-paid jobs with long-term prospects, the competition for them can be fierce. This means that your investment in the application process is not guaranteed to pay off right away. That’s enough to scare off some entrepreneurs altogether.
The complexity of the application process is enough to make many people freeze. It involves a number of steps that are unfamiliar to most business owners. Without guidance and even one-on-one assistance, the application process can seem too daunting to begin.
So How Can You Make It Work?
Preparation is the key to learning how to obtain government contracts. Good preparation will help you overcome a lot of the challenges that turn people away from applying for government contracts. If you spend some time gathering information and getting everything you need in order before you begin, you’ll not only save time during the application process, you’ll also be more likely to win the contract. There are a few ways you can start preparing already:
Learn as much as you can about the process and about the specific government contract. Gathering information ahead of time will help you avoid surprises along the way and you’ll be in a position to do things efficiently. You’ll come across resources that can help you through the process and you’ll waste less time on mistakes that have to be corrected. The best place to start is the Small Business Administration. They have a very helpful contracting guide and can even set you up with a mentor who has gone through the process.
This includes planning for the process and for the job itself. Create a budget, a timeline, and a detailed business plan that you can refer to at every stage. This can help keep you from getting overwhelmed throughout the application process and will ensure that you’re allocating your resources wisely. Of course, you will have to quote a price and a deadline as part of the application process and will probably have to prove your ability to get the job done. Having a comprehensive business plan is key to how to get government contracts.
This is the part of the process that tends to intimidate people, but it will be a lot simpler if you’re prepared. Before you even start on the paperwork for the government contract application, make sure you have everything else in order. Check that your business is registered, that you have whatever small business insurance you need, and that your financial paperwork is up to date. Once you have that done, each step of the application process will be much smoother.
Where Do You Start?
Once you’re prepared, organized, and feeling confident, you can get started. There are a few steps to getting government contracts:
Make yourself eligible for government contracts for small businesses
You will start by finding your North American Industry Classification System (NAICS) code or codes and getting a DUNS number.
Find government contracts that are a good fit
You can do this by applying to a number of government vendor databases and searching through them for government contracts that apply to your business. These include the System for Award Management (SAM) website and Federal Biz Opps. You can even try subcontracting government contracts by seeing who has the project at the Federal Procurement Data System (FPDS) website.
Write a proposal for the specific government contract
Each government contract will have slightly different requirements and instructions. They may require multiple steps and more documentation. If you find that you need help, trying contacting the SBA or even local government programs that can help.
What Happens Next?
Taking on government contracts requires working within a very precise system. If you do figure out how to get government contracts, this will be true even after you begin work. If you don’t get the project, don’t give up. The application process becomes easier when you’ve done it once and federal government contracts for small businesses may be worth the investment of applying a number of times before you get it. Good luck!