Your First Five Steps into Government Contracting: A Beginner's Guide
The U.S. government is the largest customer in the world, spending trillions of dollars annually on everything from office supplies to complex services. For small businesses and entrepreneurs, this represents a tremendous opportunity. But for many, the idea of government contracting is intimidating. The landscape seems filled with complex regulations, endless paperwork, and a unique language of acronyms that can feel overwhelming.
Where do you even begin?
The truth is, entering the government marketplace is a marathon, not a sprint. It requires patience and preparation. But by taking a methodical, step-by-step approach, you can position your business to win. Here are the first five steps every new government contractor should take.
1. Conduct a Thorough Business Assessment Before you dive in, you need to be honest about your readiness. Government agencies prioritize reliability and past performance. Ask yourself:
Do you have a track record? If you don't have government experience, you'll need to leverage your commercial past performance. Be prepared to show concrete examples of successful projects and satisfied clients.
Are your finances in order? Government contracts often have long payment cycles. You must have the financial stability and cash flow to cover your expenses while waiting for payment.
What is your unique value? The market is competitive. Clearly define what your business does better than anyone else. This will become the core of your capabilities statement.
2. Develop a Government-Focused Business Plan Your existing business plan is a good start, but you need one tailored to the government market. This plan should outline your specific goals, identify your target agencies (start local!), and define a clear timeline. Research which agencies buy what you sell. Tools like USASpending.gov can show you historical spending data, helping you identify which agencies are the best fit for your products or services.
3. Get Your Registrations in Order This is a non-negotiable step and the foundation of your GovCon journey. To do business with the federal government, and many state and local entities, you must be properly registered.
Get Your Unique Entity ID (UEI): This is the official 12-character identifier for your business.
Register in SAM.gov: The System for Award Management (SAM) is the primary database for government contractors. Your registration is mandatory for federal contracts over $25,000 and is how the government will find you and pay you. Your profile here acts as a resume for your business, so make it comprehensive.
4. Understand Your Market (Federal vs. SLED) Government contracting isn't a single entity. It's broadly divided into two worlds:
Federal: The massive, centralized market where all opportunities are posted on SAM.gov.
SLED (State, Local, and Education): A highly fragmented market of over 100,000 different entities (cities, counties, school districts) with their own rules and procurement portals. For many new businesses, the SLED market is a more accessible entry point. We'll cover this in more detail in our State & Local Contracting category.
5. Build Your Core Marketing Materials In the government world, your primary marketing tool is your capabilities statement. This is a one-page document that acts as a corporate resume. It must be professional, concise, and tailored to the specific agency you are targeting. It should clearly state your core competencies, past performance, business information (including your UEI), and what makes you the right choice.
The Takeaway Entering the government marketplace requires a strategic approach. By building a solid foundation through planning, registration, and targeted marketing, you can overcome the initial complexity and position your business for long-term success.
Feeling stuck on these first steps? Holt's GovCon Launchpad service is designed to handle these foundational hurdles for you, from registrations to crafting a compelling capabilities statement. to learn more.