I believe that in the quest for better small business financing and new opportunities for customers, there is a source of new income opportunities that very few small business owners realize: the US government is a large organizational entity, and just like any other Businesses need to buy goods and services to function effectively. Government contracts with small businesses could make you one of these providers.
Everything from military vehicles and equipment to basic necessities and post-it is routinely outsourced by the federal government to companies of all sizes. If you sell to corporations or nonprofit organizations, you can likely market your services to government agencies as well.
Yet despite these opportunities, even small business owners who are aware of government procurement opportunities find a myriad of reasons to avoid applying for government contracts, including the fact that the process is intimidating.
Here we tell you why you should put your fears aside and consider government contracts for small businesses. Next, we will show you how to find government contracts for a bid and how to compose your application to give you the best chance of winning that bid and the deal.
Why Pursue State Contracts for Small Businesses?
There are many good reasons to bid for small business government contracts, and contractors who ignore these opportunities are likely to be missed.
Let’s look at some of the reasons why your small business should actively pursue government procurement opportunities as part of your customer development strategy:
1. Government is the world’s largest buyer.
With an annual procurement market of $350 billion to $500 billion, the US federal government is the world’s largest buyer of goods and services. Ignoring delivery options offered by the federal government blurs the only broader path to finding new customers.
2. Public procurement favors small businesses.
Of the approximately $500 billion that the US government spends annually on federal contracts, it also intends to allocate 23% of that funding to small businesses. Now, that may not sound like much, but in what other auction scenarios do you have the confidence that the prospect will choose a small business like yours over a much larger one? It is practically unknown in the private sector.
Furthermore, through the Federal Acquisition Data System, it actually has the ability to identify government agencies that are not yet meeting the 23% target. If you respond to an agency RFP under these circumstances, you are almost guaranteed preferential consideration over non-small businesses.
3. More information gives small businesses an advantage.
Think about the last proposal or offer you sent to a prospect. How helpful would it have been to know exactly what the customer is looking for and how much they are willing to spend when preparing the offer and pricing? be a turning point. However, when bidding for government contracts with small companies, this dream can come true every time.
Federal agencies are required by law to produce written budgets each year detailing what they intend to purchase and the funds they have committed to those purchases and the best news for entrepreneurs? These budgets are publicly available through the Office of Budget and Website Management (OMB). You offer as you prepare your offer.
How to Apply for Government Contracts
Now that you are convinced of the value of government contracts for small businesses, let’s talk about getting into government contracts. act as a contract provider for the US government, and this includes registration in the so-called rewards management system.
How to register:
- Get your DUNS number.
For each physical location of your business, you must obtain a DUNS number from Dun and Bradstreet before registering for government contracts. With the DUNS Online Requirement Service, you can get a number of DUNS for free.
2. Find your company’s NAICS code.
Most companies also require a North American industry classification system & NAICS Code classifying your company’s industry, country and economic sector for public procurement purposes. This code is necessary to register your company.
3. Determine the size of your business.
You can rest assured that determining the size of your business doesn’t require much thought. However, to qualify for government small business contracts, you must qualify under the SBA’s size standards.
4. Join the System for Award Management (SAM).
System for Award Management (SAM) is a database of companies interested in government contracts and submitted by the US government on Google, LinkedIn or any other search or social network, Decision makers, government agencies use SAM to identify potential vendors.
For this reason, small businesses looking to win government contracts should put a similar amount of effort into creating a compelling and searchable SAM profile as they would put into their company’s LinkedIn profile or SEO strategy.
5. Request previous performance reviews.
If you are new to searching for public tenders, it may be worthwhile, although not always necessary, to obtain a prior performance review from Open Ratings Inc. This independent rating and verification system, operated by a private sector of Dun and Bradstreet Co., analyzes survey responses from your past clients to calculate a numerical rating of your past performance.
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