How Entrepreneurs Can Break Into the Government Contracting Space

February 16, 2021 4 min read

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Hindsight is 20/20 takes on a whole new meaning after the actual year that was 2020. The pandemic has forever changed the business landscape, and new opportunities have presented themselves, especially in the $600 billion government contracting industry. While other sectors are retreating and regrouping, the government space is looking to spend its way out of the challenges it faces. This usually means great things for the largest companies in the market, however, the true growth opportunity is going to be for small businesses looking for a new revenue stream.

According to the Small Business Administration (SBA), nearly 25% of all prime contracts are expected to go to eligible small businesses. If your business already sells products or services to businesses and nonprofits, why not expand into the government space? The government is looking beyond just buying personal protective equipment (PPE); it wants everything from paperclips to podcasts. The U.S. government is the world’s largest buyer and is looking for small businesses to buy from. In the B2B market, giving preferential treatment to a small business is unheard of, but in the government sector, it is expected.

As small business owners, we are never guaranteed business — we must go out and earn it. Prospects say “no” or “not now” every day in our respective fields, and we keep making sales with those needing our services or products today. The government-bid process can be overwhelming and feel archaic at times. However, if done properly, you can access data that allows you to find which federal agencies are looking for small businesses, and the government gives you a price list to utilize so your bid is extremely competitive. That simply doesn’t happen in private sector work.

Related: Winning Government Contracts: Five Things You Need to Know

Before you register your company to bid on federal work, make sure your foundation is set. 

• Acquire a D-U-N-S number. Dun and Bradstreet’s D-U-N-S number is a unique code that each physical location of your business needs in order to compete for government contracts. Getting a D-U-N-S number can take a few days. All the information you need to get the number is fairly basic. You should know the name of your business when it was created and what type of entity it is (e.g. LLC, S-Corp, etc.)
• Pick your NAICS codes. The North American Industry Classification System (NAICS) is the classification system governments use to identify a business’s country of origin, industry and economic sector. Remember: You can have more than one code. Research what codes go together in your sector and make sure you choose the ones that best fit your business. 
• Size of business. Just saying you are a small business isn’t good enough for the federal government. You’ll need to prove it. The SBA has a standard that businesses need to meet call the Size Standard Tool. The process doesn’t take long, but it’s worthwhile to know for certain your business meets all the needed criteria. Also, you can take time to figure out if your company is eligible for other SBA-related certifications, such as HUBZone.
• Create a capability statement. Before writing your statement, see what other companies are saying about themselves. This will give you some insight on how to best position your company. Keep the capability statement concise and list your core competencies. Check your terminology to make sure you are utilizing the correct terms that the government uses to explain what your business does.

Related: How to Find Free Money in the Middle of a Pandemic

Now you can register to bid. The main federal government contracting hub is SAM.GOV, and while it might not be the most user-friendly site, it is chock full of information. Treat your SAM.GOV profile just like your social media accounts, website and Google ranking. Invest time and resources to make your profile is complete and professional. One of the first places government officials look to verify your company is your SAM.GOV profile and your capability statement.

It’s time for you to stop chasing business that you know is not a good fit. Certain customers pay us the least but take most of our time. Government contracts allow you to get more secure work with a better customer that will ultimately allow you to grow your business. If government contracting sounds good to you, make sure you have a solid foundation built and begin bidding right away.