The United States government is the world's largest customer. Each year, the federal government and its various agencies procure more than $300 billion of everything from airplanes to zippers. For many products and services, the U.S. government is the biggest buyer on the planet. Uncle Sam is also an attractive customer for a few other reasons:
- The government makes its needs publicly known through such media as the Commerce Business Daily , a publication listing numerous government contracting opportunities. This is quite different from most markets, which you have to thoroughly research to identify needs.
- Government sales are conducted in an open environment where there are many rules to ensure that the process is fair.
- The government frequently buys in very large volumes and over a long period of time. That kind of customer can provide a solid foundation for growing your company.
- Laws set aside all or part of many contracts for women-owned businesses, small businesses, minority-owned businesses, and other firms the government wants to support.
- Having the U.S. government as a customer gives your business a stamp of approval. If you can meet the government's standards for quality, price and service, odds are good you can meet other customers' requirements.
There are downsides to selling to the government as well. It can be hard to find the proper purchasing agent among the thousands employed by various branches and agencies of the federal government. In addition, the rules and paperwork are daunting. The good news is that there are many sources of help. The SBA's website is one good place to start looking for help selling to the government.
And don't restrict yourself to selling to the federal government. State and local governmental entities, including cities, counties, school districts and others, actually purchase more goods and services than the federal government. There are more of them and they are smaller, but these government customers can provide alternative tracks to growth that are just as viable as the opportunities in Washington, DC.
You can sidestep many of the hassles of winning a government contract if you subcontract with the main or prime contractor. Prime contractors, ranging from large defense contractors to companies that may be smaller than yours, do most of the work to land the government job. Then they may hire you to fulfill all or part of it. Find prime contractors by perusing many of the same resources you would to sell directly to the government.
10 Tips to Getting Your Foot in the Door
According to Congresswoman Nydia M. Velázquez (D-NY), Ranking Democratic Member of the House Small Business Committee, these 10 tips may help you get a piece of the billion-dollar federal procurement pie:
1. Decide what to sell. The first thing you must do is figure out what products or services you will sell to which federal agency. Identifying a product or service that a federal agency needs is key. You can consult with an SBA Procurement Center Representative (PCR) for help, either by calling your local SBA office or by visiting www.sba.gov/GC/pcr.html .
2. Contact the small-business specialist. Each federal agency has one. Identify that person and set up a meeting.
3. Save the selling for later. At this meeting, don't spend your time trying to sell to the small-business specialist. He or she is there as a resource and to put you in touch with the right person within the federal agency who will actually do the buying.
4. Keep your cool. Selling to the government is different than selling to the private sector. Extreme aggressiveness can be perceived negatively and might be a deterrent rather than an incentive.
5. Strut your stuff. Depending on your product or service, don't hesitate to lend it out or do a demo at the agency--the more they can see, the more inclined they will be to buy.
6. Get registered. In the meantime, it is always a good idea to register with the Central Contractor Registration . This is the federal clearinghouse for vendors, including small businesses.
7. Don't assume it's automatically in the bag. Keep in mind that you won't win a government contract just because you are a small business--you will win one based on the quality of work that you do and the competitiveness of your pricing as a small business.
8. Get certified. If you are a woman- or minority-owned business, it is always smart to get certified by a state or national entity (for example, through the National Association of Women Business Owners or the National Minority Supplier Council ).
9. Be realistic about your capabilities. The government relies on past performance when deciding to award a contract. If small businesses get in over their heads on their first government contract, then chances of repeat work are slim. Start with a smaller project you know you can do well and prove yourself.
10. Finally, do your homework. The surefire way to get a foot in the door at a federal agency is to identify a product or service the agency needs--but that it doesn't know it needs and which you sell.