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You may have heard the enticing fact that the Federal government spends over $500 billion each year buying goods and services from industries. Competing for a piece of that pie is tempting, especially when you hear that over $100 billion is spent just on small businesses. You may be worried that there has to be some kind of catch though. It can't be that easy to win government contracts and walk away with millions of dollars.
There are numerous factors that affect whether a company succeeds once they’re in the Federal marketplace (like this article on 8 Simple Tips to Help Small Business Government Contractors Succeed) but what do you need to do before you enter the market to prepare? The first part is to determine if it’s worthwhile for you to even be in this market. The second part, once you’ve decided to enter the federal market, is to get registered. Finally, the third part is to get out there and learn the ropes.
PART I: Get informed - is this where I want to be?
1. Start by doing your homework. Does the government even buy what you sell?
A great part about doing business with the federal government is that there is a wealth of information publicly available. This can give you a better sense of what the market looks like. You can find details about what the government has purchased and what they are currently looking to purchase via websites like www.usaspending.gov and www.fbo.gov. Those are the first places to start. Do some preliminary searches for your product or service and see what comes up. Using the advanced search features of these sites you’ll be able to search via a number of different parameters including: NAICS code; location; and keyword. The results of your search will help you identify, on a broad scale, if the government is buying your products and services.
2. If so, find out how they buy it
Now that you know the government is buying your products and services, the next step is to learn more about how they buy it. This will help determine where you focus on your energy and what marketing strategies you’ll implement. To do this, you want to look deeper into the information contained in www.usaspending.gov and www.fbo.gov. The records on these sites will tell you what contracting agencies and offices are procuring your goods and services. You’ll be able to see the general size and scope of the contracts the government is writing. The knowledge you want to walk away with from this step is to answer the “Who, What, Where, When, Why, and How” of the government contracts for your goods and services:
- Who is buying what you’re offering?
- What types of contracts are they using?
- Where does the government need what you’re selling?
- When is the government procuring your products and services?
- Why does the government need your solutions; ie: what problem are they solving?
- How is the government acquiring these solutions?
PART II: Get registered
3. Register for a DUNS number
The first step in getting registered to sell to the federal government is to register for a DUNS number. This is a unique nine digit number that will identify your company for purposes of federal contracting. You’ll sign up for this through the Dun & Bradstreet company (www.dnb.com), however registering for a DUNS number to do business with the government can be done at no cost. To do this, you’ll need your basic business information.
4. Register in SAM
After you’ve received your DUNS number, you can then register in the SAM (System for Award Management) database at www.sam.gov. What information you enter here, and how you fill out your SAM profile will affect:
- How likely your business is to be found when contracting officials do a search for contractors
- Whether you show up in searches as a small business
- Whether you show up with any additional small business certifications
- How you get paid when you win a federal contract
- How your business appears to contracting officials
There are a lot of pieces to put together in your SAM profile. After recent compromises of the system new login procedures have been implemented. You can read more about the updated SAM login process here: http://blog.streetshares.com/understanding-the-new-sam.gov-login-process-step-by-step.
After you’ve logged in and entered your business information, it is crucial that you make sure to complete the SBA Supplemental Page. This leads to what will be shown in the SBA Dynamic Small Business Search (DSBS). A robust profile here helps contracting officials identify you as a qualified small businesses.
PART III: Get out there
5. Learn the ropes
Now that you’ve done your homework and registered your business, it’s time to get out there and learn the ropes of federal contracting. It’s not enough to just be good at what you do. You also have to know how to work in federal acquisition. There is an alphabet soup of acronyms to get used to. First and foremost is the FAR (Federal Acquisition Regulations) that governs the acquisition process and system. What is a competitive bid? How do you find out about bids before they’re announced? What is a capabilities statement? How do I finance a contract? Do I need a GSA Schedule? To get you started, there are great free resources available at your local U.S. Small Business Administration (SBA) District Offices (www.sba.gov) and Procurement Technical Assistance Centers (PTACs) (www.aptac-us.org). There are also a wealth of trainers, coaches, and consultants available to walk with you through the federal acquisition process. Find a trusted resource and lean in.
If you’ve made the decision to commit and invest in entering the federal market you must realize that this is a different world than business to business or business to consumer sales. The cycles are longer, the rules are different...but a piece of that $500 billion pie still sounds pretty good.
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This communication is provided for informational purposes only. It is not intended to be an advertisement, a solicitation, or constitute professional advice, including legal, financial, or tax advice, nor is StreetShares providing advice on any particular situation.