Government Contracting Basics

Doing Business With the Government

The size of government has grown massively over the years, and profitability from working with the government has never been greater than right now. The government contracting industry has been beneficial to many business owners. The richest man in the world, Elon Musk, would be nowhere if not for government largesse. The majority of his money comes from government contracts, as well as favorable tax treatment - through tax credits and subsidies for electric vehicles due to the desired green transition.

Government contracting is anathema to the anarcho-capitalist, but it is gravy for any other form of capitalist who likes making money, and business has been booming with the gargantuan size of government in the modern day. Government spending may overburden the taxpayer, but the government has to provide services somehow, and you are the perfect way to help the government cheaply provide services. Governments have mandates to complete projects, direct funds, and engage in partnerships with the enterprising capitalist who can create valuable services to governments, and make a tidy profit.

Government business is big business!

How can you get involved in this gold rush? You can enter into contracts with any level of government. Contact us for more information about entering into contracts with the government. Here are the steps, note that this is a high level overview:

Have an established business

The absolute worst thing you can do is start a business to only focus on government contracts. If you want to learn the mistakes to avoid when starting a business, follow this link. You need a business that has already provided value to some people, then tailor those services to a government.

This first step is the most critical step. Because having a business that already has demand from private customers means that there is product market fit, and the government loves using proven successful businesses. In addition to that, the government won’t prepay you for services, so you need some income in the bank to cover your expenses for the time you are not getting paid.

Navigate (or at least hire someone who can navigate) the government procurement websites.

This part is the most difficult part. Each level of government and different governments have their own unique way of awarding contracts, and the websites they use to accept bids are NOT intuitive. Either you, or someone who works for you, have to find these contracts. Alternatively, you can be a subcontractor, but that means that essentially you are taking smaller profits, with the lion’s share of profits going to the business that sourced the deal. There are multiple options, but the best would be mastering the art of contract negotiation and getting in front of the key decision makers for the government contract.

Perform

Don’t show up to the game unprepared. If you’ve got to this point, this means you’ve done everything right. You must complete your performance obligations in order for the contract to be complete. When you make a contract, you must abide by it. First of all, you won’t get paid until project completion so you need to have financial liquidity to perform the obligation, and you must be prepared and have patience as the government always pays - but not always on your timeline. Remember, there is no scamming the government. If the government feels like you’ve been cheating them, you may be looking at free housing and 3 meals a day in a jail cell.

Conclusion

Any enterprising individual can get government contracts and start a very valuable business. All it takes is the ability to fill out some forms, have a decent ability to price things, and some dedication and grit to complete all of your performance obligations. It takes some intelligence and hard work, but nothing worth doing comes without hard labor.

Contact us here for more information.

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