Very often we become buried in statistics and very large numbers when talking about government contracting. It is easy to be seduced by the big numbers: Over 500 billion dollars in contracts are awarded last year to small and large businesses throughout the US, some who may provide the exact services or products that you do. For instance, in the case of small businesses nationwide, according to the Federal Procurement Data System – Next Generation web site small businesses received over 84 billion dollars in contracts just last year.
Further dissection shows that last year, Minority-owned firms won $ 41 billion; Small Disadvantaged Businesses won $ 36 billion; 8 (a) certified firms won $ 26 billion, Women-owned firms won $ 20 billion, HUBZone designated firms won $ 13 billion and Service Disabled Veteran-owned firms won $ 9 billion in contracts. Note that these numbers, when added together, total higher than the $ 84 billion won by all small business. This is due to some contracts may satisfy more than one design, depending on company ownership. For instance, a company may be owned by a woman who is a minority and her business is located in a HUBZone. Her winning contracts could then be countered in all three related categories.
To bring this a little closer to home, if you look at the average single transaction by 8 (a) firms you will find that it is $ 165,000 per sale in 2007 (the most recent year data at this detailed level is available). Many business people find that it is well worth the time to learn how to be successful in this market if it is possible to average $ 165,000 per transaction. While $ 165,000 seems to be very small when compared to $ 500 billion, it is a very realistic amount. Ten of those contracts equal $ 1.65 million, not a bad start in this market.
Getting Started: Accept Government Credit Cards
One of the quickest ways to enter the government marketplace, or to sell more volume, is to sell your products or services via credit card. The federal government's main credit card purchase system is called GSA SmartPay 2. This program provides charge cards to US government agencies and departments, through master contracts that are negotiated with major national banks. There are currently over 350 agencies and organizations participating in the program spending $ 30 billion annually, through 100 million transactions on over three million cards.
Why Accept Government Charge Cards?
Charge cards enable authorized government employees to make purchases on behalf of the government to support their agency or organization's mission, mostly for small (generally under $ 3,000) work-related purchases, travel expenses, and fuel. While an individual transaction limit may be $ 3,000, do not be misled by that figure. Certain purchasers have authority for much higher purchases – up to $ 25,000 and in certain cases, even up to $ 100,000 per purchase. The federal government started using GSA SmartPay …