Tips to Getting Started in Government Contracting
Imagine that you are trying to sell to the biggest customer in your town. Although very wealthy, this customer never flaunts it. He is demanding, fussy, and sometimes overbearing. Yet he always pays on time, and once you have proven yourself, he provides reliable repeat business.
That is what selling to the government is like.
There is no doubt that government represents a huge market. At all levels, government spends hundreds of billions of dollars on acquisition of products and services each year. However, you don’t access it quite like you would other markets.
As in other fundamental skills necessary in business, you must place, price, and promote your product or service the right way at the right time to the right customer. However, it doesn’t stop there. Selling to the government also means familiarization with their rules, which are numerous and can be confusing. States and municipalities have their own systems in place. These include cities, counties, school boards, sheriff’s offices and airports, among other taxing authorities.
To be successful in winning government business, consider the following:
- First and foremost, solve a problem for the government. Like any other customer, government requires quality products and services. Recognize where the need is and fill it. It is no different than any other business. Offer the best value and you will win business. Our most successful clients have this as their primary focus, but at the same time, do it within the government’s rules.
When starting any business, solve a problem before you pursue funding. It is similar with government. Solve a problem, then pursue contracts.
- Register as a vendor. Currently, the federal government requires all vendors to register in the System for Award Management. Federal opportunities can be found under Federal Business Opportunities. Your state and local municipalities have their own vendor systems. All of these are easily found on the Florida SBDC at University of South Florida’s Resources page.
- Certifications as women-owned, minority-owned, or veteran-owned businesses can help, but does not trump tip #1. Our least successful clients are the ones whose primary concern is set-asides instead of offering a valuable product or service.
Yanina Rosario, Associate Director at Florida SBDC at USF is also a consultant with a specialty in business certifications. She has helped many business owners with this process through her years as a consultant.
“As you set your sights on becoming a certified business, remember that being certified does not mean you will not face competition,” she said. “It means that you are now competing with a smaller group of businesses. It means that you have a document that will set you apart when evaluations are done and you have an additional tool in your marketing toolkit.”
Adding a minority, woman or veteran as an owner, manager or partner with the sole intent of winning set-asides will not get you there. David Noel, a business consultant specializing in government contracting and based at South Florida State College, stresses that the business must be 51 percent owned AND operated by a woman, minority, or veteran. Expect strict audits and scrutiny of documents to ensure that the person in control over day-to-day operations does indeed meet this requirement.
Forget the “box-checking” mentality and just focus on being the best in your business.
- Network with the actual customer. As always, there is no substitute for a good reputation among buyers and contracting officers. Yes, you must register properly as a vendor but that is only the beginning. Market your products or services the right way. When dealing with the government, a simple, concise and powerful capabilities statement is of great use to your buyers. To write a good one, simply search “capability statement.” Attend trade shows and work your network.
It is important to note that smaller purchases (generally $3000 or less) can be made by purchasing card. This is not much different than a business debit card, and such purchases do not require competitive bidding. As purchases become more expensive, the process becomes a bit more formal and complex.
A good strategy for entering this market is to start locally. Start with government purchasers you are most likely to know. Ask for the business.
You may also be able to collaborate or subcontract with larger government contractors. Also, don’t just limit your business development to government, especially if your product or service can be sold elsewhere.