Small Business Ideas for 2012: Selling to Uncle Sam

Throughout the Great Recession and in the years after it, one customer that actually increased its spending is the U.S. government.

Therefore, as the private economy continues to struggle, a savvy idea in 2012 for small businesses could be selling to Uncle Sam.

Generally speaking, the U.S. government is the “biggest customer in the entire world,” said Malcolm Parvey, founder of www.sell2gov.com and author of “The Definitive Guide to Government Contracts.”

“They’re also the best paying customer for small businesses because they are required by regulation to pay within 30 days,” said Parvey.

“The government will not go away, it buys goods and services at the rate of $1.5 billion every single day and it is the most level playing field a small business can be on,” he added.

FBO

A great place to get started is the Federal Business Opportunities (FBO – www.fbo.gov), which posts about 500 new sales opportunities (for amounts greater than $25,000) each day, according to Parvey.

To win these opportunities, small businesses must fill out the paperwork to bid for them.

One advantage small businesses have is that some of these opportunities – about 20 percent, according to Parvey – are specifically set aside for small businesses.

Moreover, there are additional set-asides for business that are women-owned, minority-owned, veteran-owned, disabled veteran-owned or located in historically under-utilized business zones (e.g. a low-income zip code).

Agencies

For opportunities under $25,000, one might have to dig through on the Web sites of individual agencies.

For example, an opportunity for a courier services contract under $25,000 (seen below) is listed on the Fiscal Year 2012 Forecast of Contracting Opportunities document from the U.S. Department of Housing and Urban Development (HUD).

A major agency that could turn out to be a lucrative source of contracts for certain small businesses is the Defense Logistics Agency (DIBBS), said Parvey.

GSA Schedule

The General Services Administration (GSA) helps other government agencies with procurement.

Once a small business gets on the GSA schedule, it can receive contracts from these government agencies.

A government agency may opt to use the GSA schedule, for example, when it needs something right away and does not have time to go through the FBO bidding process, said Parvey.

Professional Help

“There is a reason why I’m in business,” said Parvey, a sales and marketing consultant to small businesses for over thirty years.

He said turning in the right paperwork to win government contracts can be incredibly complicated. In his experience, it could take small businesses over a year to get on the GSA schedule if they forgo professional help. With professional, contrastingly, it could take just a few months.

Even for the less complicated process of bidding on the FBO, Parvey said it might be a good idea to enlist professional help in the beginning when small businesses are still unfamiliar with the process.