Did you know that the United States Government spent more than $665 billion on government contracts in 2021? Business contracts offered by the federal government offer a wonderful way for small businesses to increase their revenues and invest in future growth. If you’re a small business owner then you owe it to yourself to explore government contract financing to find out if this is an avenue worth taking.
The federal government is just like any other business entity in the sense that they need to purchase and use goods and services to continue operating at full capacity. This creates a ton of great opportunities for government contracts that you can use to boost your annual revenues.
The good news is that you’ve found the perfect guide that will help you prepare bids for all types of contracts and secure the best contract options possible. Keep reading this article to learn more today!
Why Should You Want Government Contract Financing?
Small businesses have every reason in the world to look into the contract options offered by the federal government. It’s hard to pass up on an opportunity to have guaranteed income for multiple years on top of your regular clients and customers. You don’t want to miss out on the opportunities that contract financing offers.
The Federal Government Is the World’s Biggest Buyer
The primary reason that you started your business in the first place is to offer a good or service that customers would want. The United States government is the best customer you could ask for since it spends hundreds of billions of dollars each year on government contracts.
You’re missing out on a big chance to increase your profits by offering your services or products to the government. Don’t ignore this path to finding lucrative contracts with the world’s biggest and most reliable spender.
Government Contracts Love Small Businesses
If you’re a small business owner then you’ll love the opportunities that you’ll find with government contracts. The government reserves a number of contracts each year for small businesses. Roughly 27 percent of these contracts get granted to small businesses.
It might not sound amazing on the surface, but that means that you don’t have to go up against massive companies for these contracts. You can even look up the government agencies that are in need of small businesses to work with. It’s a great opportunity for your business to continue growing.
You Get More Information
A big key to securing government contract financing is to know how to tailor your goods or services to meet their needs. If you knew the needs of each potential client you’d have an easy time securing new contracts. That’s how things work with business contracts with the federal government.
Small businesses get some insight into what government agencies are looking for when they start the bidding process. It’s your chance to use this information to tailor your bid to make it as appealing as possible.
These agencies also need to write up budgets of what they need to purchase and how they plan to allocate their funds. All of this information is available to the public. Once you find an agency that requires your goods or services you can use this information to put together a winning bid.
How to Register Your Business for Government Contracts
Now that you know the reasons why you need to start pursuing government contracts, it’s time to explore the “how” side of things. You need to take certain steps to set your business up to become eligible for these business contracts. There are a few extra steps that you’ll need to take if you want to access these incredible opportunities for your business.
Obtain a DUNS Number
If your business has multiple physical locations then you’ll need to get a DUNS number for each one. The good news about this step is that it’s free to get your DUNS number when registering your business.
Locate Your NAICS Code
Odds are that you’ll also need a North American Industry Classification System code. This code helps the government identify the industry that your business operates in. You won’t be able to move forward with applying for the types of contracts that are available until after you have your NAICS code.
If you’re unsure of your industry code, your best bet is to reach out to the Small Business Administration. If your business operates in multiple sectors then it’s possible that you’ll need multiple codes.
Determine Your Business Size
Your business size also plays a big role when you move forward with trying to secure government contract financing. The government looks at the number of employees that you have to determine if you’re eligible for the small business benefits that it offers. You’ll gain access to different contract options if your business is a small business.
The Small Business Administration offers a business sizing tool that will help you find out where your business fits in. From there, you can move forward with the process with confidence while factoring government contracts.
Register With the System for Award Management
Now that you have the first three steps taken care of, you’ll need to register your business with the System for Award Management. This is the system that allows you to find the types of contracts that are available. The government uses this database to keep all of the information of businesses that want to access government contracts.
Think of SAM as similar to what a private sector customer would use to find your business. They’d search for you on Google or Facebook to find a company that could fill their needs. It’s vital that you invest time into building a great SAM profile.
The better your profile is, the easier your business will be to find government agencies that are in need. Search engine optimization comes in handy when it comes to SAM.
It’s a good idea to get registered on SAM and then do some basic searches to see if there are any agencies looking for your goods or services. Make good use of keywords to make it easy for your profile to get located. It’s also important to remember that you might need to tailor your services to meet the needs of the government agency.
Don’t forget to write your business’s capability report for your SAM profile. This report is essentially an elevator pitch that you’ll use with the government agency to sell them on what your business could provide and bring to the table.
How To Bid On Government Contracts
Once you’re in a position to start bidding on your different contract options, it’s important to know the steps to take in order to increase your odds of success. There are a number of routes that you can take once your small business is registered and eligible to work with government agencies.
Arguably the best option that you can use in order to get contract financing from the federal government is to explore your options on SAM.com. You can search through all of the available contracts that are worth $25,000 or more. It’s also a great resource to see proposals that were accepted in the past, which is huge for preparing your bid.
Another great option that you have at your disposal for finding work with government contract financing is through subcontracting. This option allows you to negotiate work with existing government contractors to help them cover areas that they can’t cover themselves.
It’s a great way to get more familiar with the process of handling government contracts as well as the type of work that comes with them. You’ll also make a fair amount of money if you choose to take this route with your business contracts.
Market to the Agencies
If you have a strong idea of the agencies that you can help out with the goods or services that you provide then it’s a great approach to market directly to these agencies. The two best resources that you can use to market directly to government agencies are SAM.com and SUB-Net. You can contact the agencies and find out if you’re the right fit for what they’re looking for.
The best part of this approach is that it opens doors for you to secure contracts in the future. Even if the agency doesn’t pick you this time around, your business’s name will get around government circles. It’s a matter of time before someone finds that you can fill a need for them.
Look Into Government Contract Financing for Your Business Today
One of the most overlooked ways to bring in steady revenue for your small business is through government contract financing. Government contracts allow your business to collect steady revenues by providing your goods or services to government agencies rather than consumers and other businesses. Make sure that you register your business and explore the contraction options on SAM.com for the best chances of success.
For more eye-opening and encouraging articles on a range of topics, check out the rest of our website!