Answer these questions to determine if you need to be selling to the government.
Let’s check out the numbers: $2.5 trillion each year. $8.49 billion a day. $28.5 million each hour. $475,000 each and every minute. Almost $8,000 per second. These figures represent the full total annual spending of the government. If you are not currently employing Uncle Sam, various other company–one that sells the same service or product that you provide–is obtaining a nice slice of the federal government pie.
Why aren’t you running a business with Uncle Sam? Among the myths that scares companies–both large and small–away from employing the government may be the old “You need to be in DC, and you should know people.” This myth has only been exacerbated by the news headlines surrounding the Jack Abramoff affair and its own never-ending aftermath. Even though it never hurts to “know people”–especially those that might purchase your product or service–you certainly need not have a lobbyist on your own payroll to market to the federal government.
Before I let you know how to sell to the federal government, however, it is advisable to determine in the event that you really have what must be done to play in the biggest market on the globe. Here is a short “quiz” that’ll assist you to figure that out.
1. Are you more comfortable with long-term sales cycles? Although the government will be ranked No. 1 if it qualified for the Fortune 500, and all governments in the United States–federal, state and local combined–account for twenty five percent of most domestic spending, the federal government sales cycle could be slow. To begin with, you will be competing against some very entrenched companies. In the event that you sell products (vs. services), the procedure may be just a little quicker, however, not by much. This won’t mean you can’t succeed, nonetheless it does mean it’ll take the time and effort. The federal government buys every legitimate business product and service available, and there is competition for that business. Successful market entry takes dedication.
2. Do you want to understand how the government buying process works? At the federal level, most buying is performed under contract. Have you got enough time and interest it requires to properly follow procedures? An in depth description of the types of contracts used are available at the Federal Aviation Administration’s site. (Yet another way the federal government buys is discussed involved No. 8.)
3. Are you aware what resources can be found to assist you? One of your very best resources is definitely the Defense Logistics Agency, which sponsors the Procurement Technical Assistance Program, which operates Procurement Technical Assistance Centers (PTACs). A complete set of PTACs and several other web-based resources can be found at GovernmentExpress.com. Select “Resources.”
4. Are you aware just what a GSA “number” is or what it’s used for? THE OVERALL Services Administration (GSA) does two major tasks for the federal government: It is the government’s property manager and in addition its contract manager. The GSA Schedule is a assortment of forty-three contracts–also referred to as schedules–that each cover several services or products. Schedule 70, for example, covers all it products. These individual schedules (or “number”) certainly are a contract which allows you to accomplish business with any federal agency. To have a GSA schedule, you need to submit a proposal to the GSA. There are a lot more than 12,000 schedule contractors, and in fiscal year 2005 (which covers the dates October 1, 2004 through September 30, 2005), GSA schedule sales accounted for $33.5 billion.
5. Do you legally qualify as your small business? The SBA sets the criteria for what’s considered “small” by federal buying standards. To generate a determination, head to this portion of the SBA site. You will have to know your NAICS (UNITED STATES Industrial Classification Standards) code in order to get this to determination for your business.
6. Will there be anything else that you’ll require besides a GSA number to legally qualify as your small business before you try to do business with THE GOVERNMENT? You bet! You must have a DUNS number, that you get from Dun & Bradstreet (D&B). D&B assigns a DUNs number to any business that wants a credit history from D&B. Companies and government agencies sign up to the DUNs service to manage to determine if another company is in good financial shape.
After getting the DUNs number, you will have to register at the Central Contractor Registration site (CCR). You should register with this web site if you want to accomplish business with the government. So as to register, you’ll want a DUNs number.
7. Can your business qualify as a “disadvantaged business”? There are a variety of classifications for contract preference that may connect with your business. For example, some bids are “set aside” for qualified minority businesses. To discover in the event that you qualify, visit this pageon the SBA’s site that answers questions about the minority business program.
To determine your eligibility for other disadvantages business categories, listed below are the classifications:
- Being truly a registered minority firm in the 8(a) program
- Small Disadvantaged Business
- Woman-owned business
- Veteran or Disabled Veteran
- Hub Zone
- Native American/Alaskan
8. Is it feasible that you’re already employing the government? If everything you sell costs under $2,500, you might already be employing Uncle Sam and not know it. Orders under $2,500 are categorized as the “micropurchase threshold” and do not require any government contract or paperwork so federal departments could make purchases under this dollar amount without the standard amount of red tape. If you would like to see if you are already employing the federal government, run this simple test. Check last year’s purchase receipts and see if the bank cards used for ordering began with these numbers: 4486, 4716, or 5568. These prefixes are applied to federal bank cards (called SmartPay cards) exclusively.
While there are many nuances, regulations you must learn to carry out business successfully with the federal government, if you’re persistent, you will discover this to become a very rewarding–and surprisingly loyal–market.
Mark Amtower may be the founding partner of Amtower & Co. in Highland, Maryland. Since 1985, Amtower, who’s still home-based after 21 years, has generated himself as the leading advisor for all those desperate to market to the federal government. See and hear a few of his just work at GovernmentExpress.com.