Small businesses are a crucial part of every economy. That is why the US government is highly supportive of small companies. In fact, the government is mandated to purchase from small companies looking to do business with them. But in order to qualify, small-time entrepreneurs has to participate in the bidding process for government contracts. The problem is, the process of securing a government contract is expensive. For this reason, small business owners seek financial support through government contract financing.
With extra funding, prime contractors and subcontractors can have more working capital. Small business owners use government contract financing to fulfill government contracts and too sustain their business. It’s a great way to generate guaranteed income, which is why many business owners willingly to take out a loan to fund it.
How to Find Government Contracts
The process of securing a government contract is relatively simple. However, submitting bids and examining solicitations take time. It’s best to work with a consultant to familiarize yourself with the entire process. To give you an overview, here’s how finding a government contract typically works:
1. Register Your Business
Before you can work with the US government, you will need to register your company as a vendor on the System of Award Management. You need to fill in your contact information along with your DUNS number. If you don’t know your DUNS number, you can get it at Dun and Bradstreet’s website or call them at 1-866-705-5711.
2. Find Opportunities
Once you’ve registered your business and figured out your DUNS number, the next step is to find contracting opportunities. You can search for opportunities online at FedBizOpps. At first glance, the listing may seem overwhelming but you can narrow it down by searching for specific criteria, such as location, keyword, and type.
Another way to find government contract opportunities is to register your business at the Central Contractor Registration (CCR). Federal agencies look for prospective contractors on the CCR, so it helps to register your business there.
As you look for government contracting opportunities, it’s best to narrow down your search and then you can go from there.
3. Review of Government Contract Opportunities
After you’ve chosen potential contracting opportunities, it’s time to review them. Many of these opportunities contain lengthy solicitation documents that encompass the details of the opportunity. With these documents, you should be able to understand the terms and conditions of the contract and as to what the government wants to purchase. You can consult a legal expert to help you understand the contract better.
4. Prepare Your Bid
Once you’ve chosen the best government contract opportunity for your business, it’s time to prepare your bids. Keep in mind that the government wants to purchase goods and services at a very cost-effective price. With the number of companies vying for a government contract, it’s important to be competitive. However, don’t get caught up with the competition! Be sure you price your goods and services in a way that’s profitable for you.
5. Submit Your Bid
The instructions regarding the submission of bidding’s are written in the solicitation documents. Make sure to only submit a bid if you’re confident that you’ll be able to fulfill it. Before submitting a bid, it’s important you research the pricing, logistical, and financial details. If you won the bid but for some reason were unable to deliver, this will not only harm your reputation, but it can also have legal implications.
6. Do Your Research
Although this post aims to simplify the process of securing a government contract, the process is still quite complex. If you want to succeed in fulfilling government contracts, extensive knowledge of the system is necessary. You can find more information on government websites or you can directly contact the Small Business Administration (SBA) office in your area. The SBA often has the resources to locate and secure government contracts.
How to Successfully Fulfill Your Government Contract
The US government prefers to work with established small businesses. They want to work with companies that have a proven track record of delivering products and services on time. Additionally, the government also conducts background checks before committing to working with a company.
Keep in mind that it’s going to take a while before you can win your first government contract. It also takes a substantial amount of cash. Entrepreneurs often spend around $80,000 to $130,000 to win their first bidding. It’s also important to remember that it may take approximately two years to see an ROI. For this reason, be sure to have enough working capital to fulfill the contract and sustain your business.
Apply for a Government Contract Financing Today
Government contract financing helps small business owners fulfill government contracts by providing them with the necessary working capital. A lot of lenders are offering different business loans for small businesses, including government contract financing. This gives small-time entrepreneurs an assurance that they will have enough funding to fulfil their customer’s orders and at the same time, pay for other business expenses.