CEO at Government Office Furniture and Manhattan Office Design. Inc 500 Fastest Growing Companies in America.
As a small-business owner who often works with the government, I appreciated that during the Covid-19 pandemic, the U.S. government spent $800 billion to help businesses through the Paycheck Protection Program. But now, it is hesitating to modernize and reauthorize the U.S. Small Business Association (SBA). More funding for SBA would mean more training, more networking events with buyers, more accountability measuring where government agencies’ contracting dollars are going and more programs educating and encouraging agencies to buy from small businesses, among many other results.
After 17 years of doing business with the government, I’ve found it can sometimes feel like a fraternity party where small businesses, especially those owned by minorities, are not invited. According to a 2020 report by the SBA itself, approximately 91% of the $560 billion worth of government contracts that year went to non-minority-owned businesses or corporations.
And these numbers are actually getting worse, not better. According to a report released in 2022 by Goldman Sachs, 10,000 Small Business Voices in partnership with the Bipartisan Policy Center, “From 2010 to 2019, the number of small businesses providing common products and services to the federal government shrank by 38%. Even more alarming, the number of new small business entrants into the federal procurement marketplace fell by 79% over that time period.”
The same report notes that the government is working to be more inclusive in awarding its contracts but so far has failed to meet many of its goals: “The women-owned small businesses federal contracting goal has been met just twice since it was established in 1994 and the HUBZone goal has never been met.”
In my line of work, office furniture, I find that the same large public companies tend to get the majority of the contracts year over year, and the top companies seem not to consider working with small businesses at all. The modernization of SBA will help the government redefine its priorities to assist small businesses. Government contracts can bring recurring revenues to small businesses that help us to grow and, most importantly, provide some revenue stability.
Here is what my company has done to persist against the tide and what I recommend all small businesses do.
1. Make yourself heard.
My firm has repeatedly contacted the top three largest manufacturers in my field, looking for partnerships or joint ventures. Most of the time, we do not even get a response. The modernization of the SBA is expected to include federal contracting goals for working small businesses. This means large companies will have more incentive to be inclusive and try to level the playing field for the 31.7 million small businesses in America. In the meantime, small businesses should continue reaching out to larger companies for subcontracting opportunities.
2. Start now.
To get certified to sell to the U.S. government, I had to register my business with the GSA. The process took almost three years. Unfortunately, not every small business can expend the resources, time and money just to sell to federal agencies. The GSA itself can be tricky to navigate and could use more resources to help small businesses with the certification process. However, the reward can be extremely lucrative. If you are planning to pursue government contracts, start well ahead.
3. Start small.
While bigger firms quickly gobble up the biggest contracts, there is an opportunity to get into government contracting with smaller deals. Small contracts—in the range of just a few thousand dollars—pose less risk to the agency when working with a small or unknown entity such as a new small business. As you do well on small contracts, you will build the credibility to obtain larger contracts.
4. Contact your representatives.
Small-business owners from Des Moines, Iowa, to Bakersfield, California, agree that modernizing the SBA is a no-brainer to help small businesses and, therefore, the greater economy. That kind of unity is practically unheard of in America, proving that modernizing the SBA to support business owners in the 21st century is truly a bipartisan decision.
If you agree that this policy can help, then I encourage you to make your voice heard to help make sure the SBA gets modernized and reauthorized. But in the meantime, I hope the above tips will help my fellow small-business owners level the playing field when it comes to government contracts.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?