Acquiring work with the federal government can be lucrative for your small business, but the process from RFI to awarded work can be tedious. Knowing how to play the game is more than half the battle. Find out how to win government contracts for your small business with the tips below.
1. Understand the qualifications for small business set-asides and sole-source. The Small Business Administration (SBA) has guidelines to assist with access to work for small, disadvantaged businesses in several qualifying areas, i.e. 8(a), SDVOB, women-owned, HUBZONE, ANC, NHO, etc. Eligibility for each status has certain requirements that can be found on the SBA website.
Given that 23% of all government contract dollars are going to these types of businesses, it is a great idea to look into where you may qualify and sign up for assistance within that status. Once you understand where your opportunity lies, you can begin to apply for the set-aside and sole-source contract awards within your area of expertise.
2. Have a plan. Once you have your status verified, now it’s time to start the acquisition process. Having a plan is the best place to begin. The SBA also has mentoring and joint venture programs to pair you with more established and experienced companies that can guide you through and partner with you on certain opportunities.
If you are researching types of contracts available to your business a great resource is www.beta.sam.gov There are search options that will allow you to find the best fit for your expertise. You will need to register with the site to have full access.
Accurate NAICS codes and sharing your prior experience aligned with the specifications in the contract is an important first step. Additionally, connect with the Office of Small Business for any Prime contractors that work within that field.
3. Use your partners. Understanding your business and how you make your money is key. Utilizing partners to meet your goals is an integral part of success. Knowing how much operating expenses will factor into your work is a way to manage your cash flow, and having a CPA partner or Fractional CFO for this purpose is helpful.
Knowing your options for additional cash flow whether it be through your banking partner or through relationships with alternative lenders like us at Parabilis is key. Accurate reporting will assist in uncovering where to go for your lending purpose, and give your lenders the information they need to get your funding options set up for your business.
4. Strategic use of debt helps your earning potential. Cash flow issues are a common problem for small government contractors. Ramp up at the beginning of a contract presents initial challenges that can cause a shortfall in your cash flow that if not addressed, can follow you for a long time and provide long-term damage to your earning potential.
Borrowing against your assets like Accounts Receivables (AR) or delivery/purchase orders is a smart use of strategic debt. Parabilis provides access to capital using three collateral bases: AR, delivery orders for up to six months, and unbilled labor. Having a proactive discussion with our team before a contract award is your best asset in your planning process. Our team of professionals will create a plan specifically catered to your borrowing capability and needs. We are ready today to schedule time with you and your team to discuss the first steps to cash positive business.