Big Government, Small Business
YOU DON'T HAVE TO BE A HUGE CORPORATION TO GET HIRED BY FEDERAL, STATE AND LOCAL GOVERNMENTS.
Hemant Wadhwani, 34, isn't the type of entrepreneur you would imagine as a government contractor. He doesn't make tiny parts for airplanes or run a huge computer coding operation. Rather, he's the founder of a home-based translation service, TranslationCity.com, a one-man show that relies on a crew of freelancers.
This vest-pocket business gets about 10% of its sales from translating brochures, web-sites, press releases and other written material into South Asian languages for government agencies including New York City, the State of New Jersey and the US Department of Health and Human Services under small, one-time agreements called microcontracts.
After he won his first contract translating fact-sheets and surveys for the US Census Bureau five years ago, it led to referrals to other agencies, which have hired him repeatedly. "Once they feel comfortable, they keep giving you business," Wadhwani says. "They have become a steady source of income."
Federal, state and local governments routinely look for small businesses to tackle projects such as printing, providing office or field supplies and creative work such as designing logos, shooting videos or writing website copy. Often, if the total cost is $5,000 or less (there are exceptions; some can be as high as six figures), government officials can issue a simplified contract. While you obviously won't get rich from a single microcontract, if you win a bunch of them, the revenue can add up quickly. Here's how to get your foot in the door:
TAKE A CRASH COURSE. If you can't afford to hire a consultant, take a free workshop at a regional office of the Small Business Administration. "They might even help you with marketing to a government agency," says Jeff Belkin, leader of the national law firm Alston & Bird's government contracts practice.
START WITH MICROPURCHASES. If an office worker at a government agency needs to restock its staplers, or a member of the US Army Corps of Engineers needs a tarp for a field project, they can put these small buys (less than $3,000) - called micropurchases - on a government credit card, or GSA SmartPay 2 card.
By allowing your business (including brick-and-mortar stores) to accept these cards - which you can do through your bank - you open the door to a relationship that could lead to a microcontract.
"The market is huge," says Lourdes Martin-Rosa, adviser on government contracting at American Express OPEN, which provides services to small business owners and helps run Give Me 5, a program that teaches women how to become government contractors. "There are more than 600,000 federal credit card holders who spend more than $20 billion annually."
To get government workers to make purchases from you, Mark Amtower, founder of Amtower & Co., a Highland, MD, consultancy group that advises clients on winning government contracts, says to list your company in the Central Contractor Registry, a database that government buyers often search when looking for vendors. Also put the SmartPay program's logo from its website onto your own. "It says you're government-friendly," he says.
FILL OUT THE PAPERWORK. Government officials can't issue contracts unless you get certain identifying numbers and codes. You'll need a DUNS number - a nine-digit code the government uses to keep track of records on your business - from the commercial information company D&B in New York City. You also need to register with your state, as well as the Central Contractor Registration to get a Commercial and Government Entity (CAGE) code, which identifies you in government computer systems. Finally, get a federal tax ID number from the IRS and open a business bank account where you can receive direct-deposit payments.
RESEARCH WORK OPPORTUNITIES. To find out about government projects, check FedBizOpps.gov and Stateandfederal bids.com. Will Dearman, president of the Location Store in Austin, TX, which has sold GPS units to the US Army, also suggests asking state and city procurement officers about e-newsletters on upcoming projects and vendor registries you can sign up for locally. These listings will tell you what you need to do to go after a job.
CONSIDER THE TIME COMMITMENT. Before you go after a government project, make sure you know how much paperwork is involved in the application process. "The requirements [for proposals] are very technical and time consuming," says Dee Ann Deaton, founder of Spotlight Imaging, a Mesa, AZ, publicity and videography firm. She says one proposal - which should highlight company history, awards or distinctions in the industry, details on how the job would get done and a price - took her a month to complete.
DON'T SELL YOURSELF SHORT. Government agencies don't have to choose the lowest bidder for microcontracts, so you may be able to win jobs if you are more qualified but don't offer a rock-bottom deal. And make sure you choose a price point you can stick with in the event you get repeat business or word-of-mouth referrals, says Adam Ishaeik, federal contracts manager at Hunter Wellman in Arlington, VA. "Other agencies will want the same price," he says.
NETWORK, NETWORK, NETWORK. Like corporate clients, government agencies like to work with vendors referred by people they trust. "You'd rather go with someone you're comfortable with than some unknown," says Steve Ball, a graphic designer in Sacramento, CA, who gets about 35% of his sales from microcon-tracts, often through referrals from other government clients.
Many agencies run events to meet small vendors, where you can network with procurement officers, whose job it is to buy things for the government. Always bring a brochure, as well as business cards that include your North American Industry Classification System (NAICS) Code (a number you can look up on naics.com that indicates what industry you are in) and CAGE code. "These codes speak the language of the government buyer," says Scott Orbach, principal of Bethesda, MD-based EZGSA.com, a consulting firm that helps clients win government contracts. "If they are looking for translations, for instance, they're looking for a certain number."
You can also contact government officials directly. Pegine Echevarria, a motivational speaker based near Jacksonville, FL, took this approach. She won her first government job seven years ago when looking for reasons her son should not join the National Guard. Uncovering reasons why it was actually a good idea, she approached his recruiting officer - and ended up with an invitation to speak to top recruiting officers in Puerto Rico. Echevarria now generates about 30% of sales at her three-person firm from government clients like the military and the Social Security Administration.
Chris Dixon, an analyst with Input, a firm in Reston, VA, that helps clients develop government business, advises attending public hearings and meetings run by local city councils to find out about problems officials are trying to solve. "Don't be afraid to step up to the microphone and say you have a homegrown solution," he says.
Because, as Wadhwani proves, even the smallest, one-person business can fill a government need.