One of the ways to expand your business is to look to the government for work. It has long been understood that the government consumes more services and more products that anyone in the entire world. If you have the ability to understand how to win a government contract, you have an extremely valuable resource for expanding your small business rapidly. They key to winning these contracts is putting together a plan that will help you to navigate all the different types of government agencies. Understanding all the ins and outs of each of those regulations and rules that comprise the contracts can be a daunting challenge for even the most experienced business owners. Understand that there are currently over 20 million small to medium size businesses in the United States, of which less than 500,000 are in the unique position to begin working with the government. This small percentage of small businesses are not the only companies capable of doing the work for the government, they are in the unique position of understanding how to win a government contract.
Small business owners are allowed to bid on any size contract they wish, but the federal government by law sets aside their purchases of $3,000 to $100,000 for those smaller businesses to bid on. One of the things you have to understand before you go bidding on large government contracts is to understand you need to have a track record before the federal government will consider you for the job. Your company need be in business for at least two years with positive cash flow to be considered. The opportunity to win a government contract comes down to taking hold of those opportunities when they present themselves because these contracts are simply not handed out to companies. If you have the drive and commitment to pursue a government contract, here are some useful tips to help you to increase the likelihood of you getting those jobs.
1. The first thing you must do when bidding on a federal government contract is to select your NAICS code. This is known in the industry as your North American Industry Classification System code, and is the standard currently used by federal agencies for classifying businesses in analyzing and collecting business economic data. This is a service that is available from several private research firms for a fee. Companies like Hoovers, Dun & Bradstreet, IBISWorld, and Moody's Investors Service all provide this service to small business owners. This is an important step in the process of winning government contracts, so make sure you get your code before you start bidding on contracts.
2. Before you can select different sized contracts you need to understand your size standard. This calculation is based on your NAICS code and will put you in a better position when it comes time to being evaluated for a government contract.
3. In order to help to track your business globally, register for a free nine digit Dun & Bradstreet DUNS Code. This way your business will be assigned a unique number for each physical location, allowing the government to easily identify each physical location.
The next 7 steps will be discussed in part 2 of this blog post.