5 Steps to Help Small Businesses Do Business with the Federal Government

by Edgar R. Olivo

President Biden announced a bold new goal last summer to increase the share of contracts going to small, disadvantaged businesses by 50% by 2025. This unprecedented target is projected to add $100 billion to small businesses in the United States over the next five years. Now is the time for small businesses to prepare to find opportunities with the federal government.

According to the Small Business Administration, the United States government is the largest single purchaser of goods and services in the world. This starts to become more apparent as you think about the federal government as an organization that has more than 4.2 million federal employees needed to run it smoothly. The government needs supplies like any other organization, such as pens, paper, computers and software, toilet paper, building maintenance and cleaning materials.

Small businesses should consider preparing for the opportunities ahead by doing a few key activities first. Here are six activities a small business owner must do to be ready to sell to the federal government.

  1. Know your target market. Do research about what departments within the federal government you plan to sell to. If you understand their needs, then you can create a tailored strategy to meet their needs. Start by searching for contract opportunities on government vendor sites like USASpending.gov or SAM.gov.
  2. Find technical assistance providers in your area. Small businesses can get free help to prepare for contracting opportunities, especially in high-growth industries like construction and technology. To find assistance, the Small Business Administration provides a list of local Procurement Technical Assistance Centers (PTAC) with mentors that can help with document preparation to help you win more federal contracts.
  3. Sharpen your skills constantly. Even the government is in a constant state of evolution, so staying up to date with your industry trends and skills will become your greatest advantage. Earn the necessary licenses and certificates to increase your value in the market and always be on the lookout for learning opportunities.
  4. Find your NAICS/CAGE/NCAGE Codes. Your NAICS Code, or North American Industry Classification System Code, will be used by contracting officers to know the nature and industry of your business. There is a self-service website where you can select among the NAICS Codes in the list that best describes your business offering. If your business is located within the country and its territories, you will be assigned a CAGE Code. You will need an NCAGE Code if your company is built outside the U.S. and its territories. You can get this after you complete your SAM.gov registration.
  5. Register your business at SAM.gov. Registering your business at the System for Award Management website means you are now qualified to bid and win federal contracts. To have a completed vendor profile in SAM.gov, you will need to have your Employer Identification Number (EIN), a Unique Entity Identifier provided by SAM.gov, and your banking and financial information.

Becoming a federal contractor to sell to the government can seem complicated and, luckily, most of it can be completed online. A U.S. government contract can generate steady sales for a small business for several years. It is worthwhile strategy to pursue to grow your business.

EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor, and contributor for several media outlets. He’s a nonprofit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.

Para la versión en español de este artículo, haga clic aquí.

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