Increase Capacity, Experience with Local Government Contracting

by Janette Blanco | January 13, 2020

Depending on the industry, when starting a business, many business owners set their sights on eventually doing business with the government. Many government contracts can be very lucrative, but more importantly, they are a reliable, steady source of income.

Inspired by Google searches, book advice, and podcast guidance, some business owners anxious to jump into this field, often times misguidedly, target federal agencies first. Federal agencies value experience and capacity above all else. In their eyes, these are attributes that can rarely be found in the public arena.

In order to build the valuable experience and capacity to attract these federal agencies, the business owner must first focus on local government agencies. Working with local government will help you develop the following pertinent resources to be attractive to federal agencies:

• Equipment: The federal government is not going to provide you with equipment when they hire you. They expect you to have your own. Take this time working with local agencies to invest in reliable equipment that can take on any task. This time will allow you to evaluate what your equipment can handle and adjust accordingly. Make sure you maintain the equipment throughout the years, so that you don’t have to constantly invest more money replacing failed products.
• Employees: Build a reliable team that you can trust to follow through with any task at hand. Government agencies regard stability and reliability. Giving them this experience at the local level will be a great test of these qualities and in what areas your team falls short. Put a lot of effort into hiring the best individuals for the job.
• Money: Working with government agencies can be a very lucrative venture, but it comes with many costs. You need to be financially stable enough to build up equipment and resources as well as a reliable and competent team of employees. Using this time and gaining local contracts will help you build up that capital.
• Relationships: During this time, it is important to develop relationships with local agencies. These relationships can help you later on when trying to get in at the federal level, because often times the agencies communicate with each other. Develop relationships with purchasing, procurement, and prime contractors, and use them as mentors so they can guide you to achieving your goals.

It is important to remember that each step of your business is just a stepping stone. Though getting into the local arena is easier than federal, there are still barriers you must overcome in order to be a viable candidate for local contracts.

Finances:
The first thing a business owner must do is to get your finances in order. Again, this is a venture that requires a lot of investment so make sure you are financially stable enough to handle it. At the very least, keep a separate bank account for the business and be sure taxes are filed on time. Track and audit your expenses, preferably digitally.

Certifications:
It is highly advantageous to be certified when doing business with the government. Some agencies actually require it. Being certified also helps alleviate redundant tasks such as filling out the same paperwork over and over again. For example, you can just say, “I am certified with Hillsborough County,” and other agencies will accept it.

It is recommended that a business take advantage of the many resources out there to become certified. There are many certifications that you could qualify for – minority, woman or veteran owned and the recent LGBT certification, to name a few. These certifications can carry you through to the federal level.

Building capacity and experience is not something that can happen overnight. Expect to put in three to five successful years at the local level before you venture into the federal arena.  Many business owners feel that the effort is worth it in the long run.