Winning Secrets: Government Contracts as Small Business Owners

Winning government contracts is one of the cost effective strategies for small business owners to grow revenue and expand their businesses. To promote and help small businesses, The U.S. Small Business Administration (SBA) and other federal agencies have offered different federal or government contracts.

Now, the question is how you will win a government contract competing with other larger businesses.

A record 27.2% of total federal contracting funds were awarded to small businesses in fiscal 2021, according to the Small Business Administration.

Learning to win government contracts can be a challenging task, yet millions of small businesses in the United States are thriving because of them. There are many benefits to having a contract with local, state or federal government agencies.

Why Government Contracts?

All business owners want to grow their revenue and this occurs when a governmental agency signs a contract to purchase goods and/or services from a small business. The federal government by law has to buy 23% of its annual goods, products, and services from small businesses.

Moreover, several report say, small businesses that contract with the government generate 19% of their revenue from the federal government.

Some of the key benefits of doing business with the government and having government contracts include:

Stability: having a contract with the government can provide a measure of stability for small businesses. Governments tend to not change vendors frequently, making longer-term strategic planning easier when small businesses have government contracts.

Legitimacy: small businesses with government contracts are often perceived to be more stable and successful than many of their peers. This can make it easier for them to win new customers.

Assured payment: governments usually pay their bills on time. This facilitates financial planning and enhances cash flow.

However, it is important to note that merely signing a contract does not guarantee that the governmental agency will indeed make those purchases.

Nonetheless, without having a contract in place, typically, there is little chance that a small business will secure business from a government or governmental agency just by happenstance. This does happen, but the dollar amounts are typically quite small–usually less than $10,000.

Top Tips to Win Government Contracts

As a small or medium business owners what can you do to ensure that you can beat the competition and win government contracts? Here are a few tips that you can help your business win government contracts, just like the big corporations:

Identify the kind of products to sell at specific agencies

One of the essentials of entering government deals is identifying what you need to offer despite your business having multiple products or services. If you want to win government contracts, then you need to understand what your customer wants. Like selling to any other customers, you need to answer specific needs.

Focusing on specific needs of government agencies you are to deal with can have great benefits as you can provide answer to what they want and deliver solutions to their pressing concerns

Start small

The problem with many businesses that enter the local, state or federal bidding process and lose, is they want to start big but come assessment time, they cannot deliver. Before you set out to win government contracts at a high dollar level, you should consider starting small.

It’s better to start with small contracts and establish a few wins, as this can establish a start of a good relationship with the government agency. Your past performance can also be a good indicator that you can deliver.

Have a targeted approach

Bid out on 2 or 3 subject areas where you have expertise rather than doing 15 or more projects that are all over the place. If you want to win government contracts, then you need to stay tightly focused.

Speak with the contracting officer

There are typically point persons in all governmental agencies who can provide more information about the contract in which you are interested. You can often consult with them and get ideas about getting into the bidding process. They can also direct you to the proper person who can give you valuable insights.

Provide quality not just competitive price

There are businesses with competitive prices yet fail to qualify because the offer lacks quality or value. Government buyers don’t always choose the lowest price. Instead, they often look at overall value. If you want to win government contracts, make sure to offer a higher overall value than your competitors.

Make sure all documents required are complete

Governmental purchasing processes are highly regulated. Governments also have very strict paperwork completion requirements. If you want to win government contracts, be certain to complete all the forms and submit all requested information. Don’t overlook anything.

Demo your product or service if possible

There are times when you need to strut your stuff so that your customers know what you can deliver or if your offer is worthwhile. Often, demonstrating what you can offer creates the biggest difference in winning and losing a contract. If there are opportunities to demonstrate your product or service, always grab them.

Cultivate relationships

Having networks like business partners, liaison officers, or other point persons can help boost the likelihood that your business will win government contracts.

Have someone on your team play devil’s advocate

Every proposal can be shut down and the best defense is to cover all fields. It’s good to have someone who will play the role of a devil’s advocate so that you know what holes to fill in and what part of your proposal needs focus. To win government contracts, you need to be certain that all potential downsides are addressed before you submit your proposal.

Get Registered

Before you can win government contracts, you must be sure to comply with all registration requirements. Before bidding on contracts, make sure you are registered with key agencies including:

Dun and Bradstreet – you must have a valid DUNS number
System for Award Management (SAM) – you must have a valid SAM registration

Having a government contract can set your small business on a strong path towards sustained growth and success. I have helped numerous businesses grow their revenue simply by helping them win a government contract.

For example, in once case I helped a startup in the corrections industry win a government contract that was valued at more than $16 million. I also helped another–a startup in the transportation sector–secure several small local and regional contracts.

Winning these government contracts helped that startup eventually land on the Forbes list of the 200 fastest-growing startups in the United States, two years in a row!

Resources for Government Contracts

There are several resources and sources of government contract updates which can help you find out the right contract, prepare for it, and win it confidently. So, here is a list of links through which you can have latest updates and changes on federal or government contracts.

To find and win government contract opportunities with the federal government, you can use the FedBizOpps website. Once you find an opportunity that’s right for you, following these tips can help your business win government contracts and grow.