Remember your first few months in business? You probably spent most of your time operating in the red, never feeling sure that enough clients would walk through your doors to keep the lights on. Since a significant number of businesses close their doors within the first five years, developing stable income sources should be a priority. Government contracts, when effectively captured, can offer exactly that – a guaranteed, steady stream of revenue, month after month.
Of course, as with anything, wooing government sales takes a significant amount of investment of time and resources in the beginning. But landing a contract is worth far more than what you put into it. And here’s why.
For Some Agencies, We’re in a Growth Period
With large government agencies like the Department of Defense – who are actively searching for vendors to provide them with goods and services – right now might be one of the best times to start working on government contracts.
Defense spending alone currently clocks in at a whopping 16 percent of the total federal budget ($602 billion), so this one agency offers hundreds of government opportunities for those who know how to take advantage of them. So become one of those suppliers and start getting a guaranteed monthly income stream.
Big Companies Need Not Apply
For small businesses, putting in a proposal might feel like an inevitable defeat, especially with Fortune 500 companies bidding on the same contracts. But here’s the thing – many small businesses have a big advantage.
If you’re a small business owner, the federal government is on your side, as they prioritize spending with small businesses. After all, our nation’s “mom and pop” shops are the economic engine that helps build a healthy tax base.
So with billions of dollars being potentially set aside just for small businesses, the only thing to worry about is how they define “small,” and whether or not you meet the criteria. (You can check with the U.S. Small Business Administration to get more information about opportunities and size definitions.)
Bring Free Market Agility to the Staid Bureaucracy
One of the most important reasons government agencies look for contracted products and services comes down to evolution. Competition in a free market economy breeds newer and better solutions to problems at all levels of business. And government agencies are often restricted by a rigid “silo” mentality, with lots of red tape and little to no hope of change without outside help.
In many cases, it is just the nature of government work, which probably comes as no surprise. Government employees have narrowly-scoped job descriptions and solid hiring protections in place. Large and unwieldy processes take time to trim, particularly given the government’s need to document every dollar spent.
What does this all mean?
There’s not much that for-profit enterprises can’t do more efficiently than a government agency, putting you in the perfect position to help. The wheels of bureaucracy turn slowly, but businesses move at a sprint to stay at the leading edge of the market. So when the government needs an overhaul or access to new services, outsourcing a contract to the private sector is the often the best answer.
If nothing else, it introduces managed competition to the market, giving existing government agencies motivation to do more with less.
Guaranteed Long-Term Revenue
With all of these benefits, you might still be wondering if it’s worth the effort. It’s a valid question. Capturing a government contract takes a lot of time, networking, a big-time investment creating each proposal, some serious attention to the bottom line bid and a ton of patience. But you’ll be rewarded with a long-term, guaranteed revenue stream that will be more than worth the challenge. Especially since landing one of these contracts often ensures at least five years of income.
What’s more, a government contract offers the flexibility and stability you need for sustainable growth. Where other customers might pay late or have a check bounce, the government always pays its invoices. With that income flowing, you can spend more time developing other revenue streams to help propel your business forward – keeping your “in the red” mentality firmly behind you in your rearview mirror.