© 2004 Dream Merchant Dream Merchant • 2309 Torrance Blvd. #104, Torrance, CA 90501 (310) 328-1925 email: Jkm316@aol.com
You Don't Have to be a Major Corporation to Sell Goods and Services to the Federal Government. Here's How Your Small Business Can Tap That Market
By Mike Foley
Are you looking for a customer with huge resources, one who purchases in both large and small quantities?
The U.S. Government is all that and more, purchasing more than $220 billion in goods and services each year. And although the government does deal in large quantities (billion dollar aircraft, for example), those acquisitions represent less than 10 percent of total government purchases. That means the market is wide open for small and mid-size businesses. In fact, more than 90 percent of individual government purchases are made for less than $25,000.
Unfortunately, most business owners are unaware of the government opportunities and therefore don't seek those contracts. And although the paperwork for large government contracts can sometimes be overwhelming, small purchases do not require a vast paper trail. Such purchases are often done through special small business programs that streamline the buying/selling process. Even better, most government agencies pay their contracts within 30 days to avoid interest penalties.
To begin doing business with the federal government, consider the following:
1. Agencies--Call on the government agencies in your area and speak to the small business representative. That person will have information on how to sell to the specific agency. He/she can also help you determine the Standard Industrial Code (SIC) for your product or service and help you with the necessary forms to create your relationship with the government.
2. The SBA--The Small Business Administration works hard to make sure that small businesses obtain a certain percentage of government purchases. Register your business in the SBA's PRO-Net program. You can do this online by visiting the SBA website at http://www.sba.gov
3. Subcontract--By reading the Commerce Business Daily (CBD), you can locate the business that have been awarded federal contracts. You may then seek to subcontract and provide products/services to those companies.
4. Start Small--Many government purchases fall into the $5,000 range. That's a good way to break in with an agency, so be sure to investigate those possibilities.
5. Merchant Account--Since most agencies pay for smaller purchases with a credit card, you'll need to set up a merchant account to accept those credit card payments.
6. Gather Information--Visit The Federal Marketplace, which is packed with information to help businesses sell to the federal government. You may visit the site at: http://www.fedmarket.com
Although many small business owners believe that selling to the U.S. government is a troublesome chore, that's simply not true. With patience, small business owners can gather information and learn the process. And even better, you'll be claiming a share of the government's annual purchases.
Mike Foley has been editor of The Dream Merchant since 1990.
Previous Index
Idea Help
Next
