Why Government Contracting?

Government contracting can be a lucrative source of income for any small business, especially given the state today’s economy and markets.

Getting a government contract can be quite a triumph for any business, but for a small business, it can be the accomplishment that allows the owners the freedom they desire. Many small businesses even end up transforming from 100% commercial to 100% government contracts once they find their niche and discover just how lucrative Uncle Sam’s business can be. In addition, because it buys millions of products and services, every business can do contracts with the government.

Hundreds of thousands of small business owners have entered the federal marketplace, competing for and winning contracts producing goods and providing services to the dozens of agencies within the government. Almost one-fourth of all contracting dollars are distributed to small businesses; literally hundreds of billions of dollars will be spent in the next few years. In fact, small businesses win almost half of all government contracts! They just don’t get the splashy headlines that Boeing, Lockheed, and other huge contractors receive. Small business contracts can range between a few hundred and a few million dollars.

Any business, be it a single person operation or a company with 50 or even 100 employees, can compete for and execute on government contracts. But it isn’t easy, and many small business owners can’t or aren’t willing to do what it takes to get started. The initial startup costs can be prohibitive – though the first step of simply registering to be legally eligible to do business is relatively uncomplicated, actually getting contracts is vastly more difficult, and learning the ropes can take months or even years.

Why now? If government contracting has always been lucrative, why hasn’t anyone mentioned this before? With President Obama’s stimulus plan, many reliable sources such as USAToday.com’s Steve Strauss are saying that there has never been a better time than now to enter government contracting. Most of the money will go to the states in order to let them decide which is best for their communities; the benefit of this is that every small business, no matter where in the country, will surely benefit from President Obama’s stimulus package. While it may seem too good to be true, remember the New Deal and the programs created by the federal government in order to boost the private economy and its successes.

In the time your business has been operating, you have doubtlessly called many people and organizations your clients, but the Federal Government could become your biggest and best. Doing business with the government isn’t like doing business commercially, however. The transition from commercial (or residential) is a tremendous leap for any business to make. Every agency has different focuses, guidelines, and regulations which have to be met and followed before a contractor can even consider trying to do business. The extra layers of bureaucracy make it difficult, but not impossible – if you are willing to put forth the investment of time and effort.