Why Government Contracting is a Good for Small Businesses

What Is Government Contracting?

Government contracting is when specific government agencies contract with private companies for specific goods or services. The agencies usually put out a contract or often a request for proposal (RFP) and various companies can place bids for the project. Once an agency selects a particular business, a contract is signed, and that business is now considered a government contractor.

Why Work For The Government?

There are many compelling reasons to work for the Federal Government.  We will go into in-depth detail about how a small business can benefit greatly from being a government contractor.

Being A Government Contractor Is A Great Way To Make Your Business Stand Out In An Overcrowded Field

Business can be very competitive. Working on government projects is a great way to make a mark in an oversaturated market. The government has a great deal of work specifically set aside for small businesses.

Also, many small businesses often do not want to deal with the hassle of working with the government, and sometimes there can be surprisingly little competition for a government project. That is why utilizing Sam Directory to handle all the confusing registration requirements is a very smart investment. 

The United States Government Is A Very Powerful Client With Deep Pockets

The Federal government usually spends around 500 billion dollars a year on goods and services. This makes the U.S. government an extremely attractive client. There are few other organizations with this type of spending power and clout.

The government also tends to buy goods and services in bulk. If your business has the infrastructure to handle large orders, then the government can help you grow substantially at an accelerated pace.

Government agencies also buy goods and services in large quantities. Large orders can be a double-edged sword for small businesses. However, if managed correctly, they can help you grow substantially and rapidly.

Small Businesses Are Given Special Consideration When It Comes To Government Contracts

In many markets, small businesses are often outcompeted by larger organizations that often have access to almost unlimited resources. This set aside actually might increase a small business’s chances of winning a lucrative bid.

The federal government is required to set aside at least 23 percent of its total spending specifically for small businesses. Several small businesses have made a fortune just on federal government contract awards.

The Federal Government Offers Great Opportunities For Many Types Of Businesses

The government actually designates a portion of the contracts for women-owned small businesses, small disadvantaged businesses, companies within historically underutilized business zones (HUBZone), and service-disabled, veteran-owned small organizations. This allows for underserved groups to have a real chance to get awarded lucrative government contracts.

The Government Is Fantastic For New Businesses

The government has a lot of demand but it goes out of its way to make sure all competition is open and fair. It will need to work with almost any business for products and services with competitive pricing.

The United States government is known for running with high levels of precision and accuracy. Making sure the government contracts are fulfilled is a great way for a new small business to streamline its process and delivery methods.

Working With The Government Is Great For Marketing

The government is one of the most powerful consumers in the world. Being a government contractor is a wonderful way for any business to grow its reputation in the digital marketplace as well as other forms of advertising. It is a fantastic way to build a strong reputation in a relatively short amount of time.

Government Contracts Offer Security In These Uncertain Times.

Covid-19 has halted a lot of different industries. However, the government must continue to move forward for the health and welfare of its people. Government contracting can be a shining light in the pandemic darkness and provide a lifeline to many struggling businesses who are trying to survive this unprecedented situation.

You should remember that government agencies are in need of goods and services in a year-round capacity. This makes them one of the few consumers that are actually recession-proof and a great source of steady reliable income.

How Do You Get Started Working With The Government?

SAM stands for System Award Management.

In order to do any business with the federal government, you must register your business in the System for Award Management. The government will not hire any type of business that has not registered in the SAM directory.

We have an article on our site, Everything You Need to Know About SAM for Small Businesses, that gives you important information about this process.

As a smart entrepreneur, you have already used our site to register in the SAM directory. Congratulations on taking this important first step to become a government contractor.

Registering With The SAM Directory Also Has Other Important Advantages

You must register with the SAM directory in order to apply for government grants.

A grant is a way the government funds your ideas and projects to provide public services and stimulate the economy. Grants support critical recovery initiatives, innovative research, and many other programs listed in the Catalog of Federal Domestic Assistance (CFDA).

A grant is different from a loan in that it is money that your business does not have to pay back. So, registering for the SAM directory actually gives you access to free money!

Never Underestimate The Power Of Research.

The business landscape has changed dramatically in the last decade. One thing that has always remained constant, the United States Federal Government is one the largest and most powerful consumers of goods and services in the whole world. Being a government contractor is a highly desired position for any business.

Do your research. Make sure you understand what agencies will benefit most from your business. Make sure that you read our blog on how to put together a well thought out proposal when you bid for government contracts. The government can be a great source of revenue and security for any small business and we would love to help you succeed down this very lucrative path to prosperity.