Selling to the World’s Largest Customer
This week we’re exploring a unique opportunity to turn the world’s largest buyer of goods and services into a customer of yours.
That’s right, we’re talking about selling to the government.
There’s nothing like having a client that can literally print the money!
But there’s a lot of confusion and misunderstandings around getting government contracts so I’ve enlisted some expert help to help us learn how to do it the right way.
Retired Lt Col Ricky Howard of DoDContract.com spent years on the purchasing side for the U.S. Department of Defense and now helps small businesses like yours get their foot in the door.
Tune in to The Side Hustle Show interview to hear:
- why there are so many lucrative opportunities with government contracts
- Ricky’s tips and best practices for winning contracts
- how you can also win contracts acting as matchmaker or partnering with other business owners
- NordVPN — Get a huge discount off your NordVPN Plan + 4 additional months for free!
The Opportunities in Government Contracting
“It’s an amazing opportunity that most small businesses don’t know about or don’t try. Or, if they do try they’re really not sure where to start,” Ricky said.
The government is the single biggest purchaser of goods and services in the world, Ricky explained.
Furthermore, Ricky said that the government is mandated by law to buy from small businesses — at least 23% of their spending.
To give you an idea of what that looks like in dollars, Ricky said that the government spent around $154 billion just on small business contracts last year alone.
And it’s not just for heavy machinery and defense supplies. There is a huge amount of potential for small businesses of all kinds to get a slice of the pie.
Just about anything that goes into the infrastructure of a town where military personnel are based needs to be sourced.
From recreational activities to building and maintaining office buildings, the scope is incredibly wide.
Ricky also said it’s a great time to pitch contracts to the government right now. Less than 1% of small businesses are actively selling to the government, and that number has been decreasing in recent years.
Finding Out if the Government Is Buying What You’re Selling
“In the public sector, all the information is public,” Ricky said.
Ricky said it couldn’t be easier to find out who’s doing the spending and what’s being bought than when it comes to the government.
If you want to find out if the government is buying what you’re selling, Ricky recommends getting started by visiting USASpending.gov.
To use the search feature on USASpending to find out if there is a demand for your services, Ricky gave the following tips as an example:
- Go to “Award Search” and pull down the menu, then select “Advanced Search”
- Select a range covering the last three years for the most relevant data. That’ll be “FY 2023,” “FY 2022,” and “FY 2021”
- Type your niche or service into the “North American Industry Classification System (NAICS)” box to find out what your government code is. For example, if your type “Painting” into the NAICS box it’ll show you the code for painting is “238320”
- You can now search for contracts awarded to small businesses offering painting services. Ricky performed this search and could see around $253 million was spent on painting over the past three years, and the DoD was responsible for around $175 million of that.
This is just a quick example, there is a lot more you can do with the advanced search filters available.
If you spend some time digging into the data you’ll be able to see the types of contracts on a more granular level.
Registering to Sell to the Government
Once you’ve found that the government is awarding contracts to businesses similar to yours, the next step is to go to Sam.gov.
This is where the government repository of all federal contracting information is stored.
You can look up solicitation information on specific contracts, as well as register your business to sell to the government.
Ricky said the process of registering your business is self-explanatory, but expect it to take a week or two for all the approvals to go through.
Playing Matchmaker or Being a Subcontractor
If you don’t have a business or offer a service yourself, you could act as a middleman or matchmaker.
This is called being a government contract “integrator.” Ricky said being an integrator is a popular business model that works well.
You could also be a subcontractor and work with a larger prime contractor. This enables you to put in a joint bid on a project and work with another business.
This is a good way to be awarded contracts that have been set aside for specific business types of demographics that only one of you can bid on.
There are some rules around how much work the prime contractor has to do on a project, but it’s another model that works well.
Ricky explained that if you dive in and start writing proposals and bidding on contracts, your odds of winning are going to be very low.
To increase your odds, Ricky advises that instead of filtering for requests for quotes on jobs, you filter on “requests for information” or “sources sought.”
These requests are the government trying to figure out how to solve a problem before putting a solicitation together.
To create a request for information, you’ll need to put together a few pages of information answering questions, and recommending solutions as per the proposal.
The benefit of doing this is that you’re making contact before the solicitation has come out.
You’re putting your company name out there as someone that can do the work and explaining why you’re perfect for the contract when it’s created.
You’ll often have the option to request a meeting in person when filling out a request for information. This is something Ricky recommends doing as a way of introducing your business.
Bidding Best Practices and Tips
When you see a solicitation that you want to put in a bid for, some tips Ricky shared are:
- Don’t add anything that isn’t asked for in the proposal, it’ll only work against you. Your bid is going to be scored based on how well you followed the instructions.
- Look at similar contracts that have already been awarded to get an idea of how much to bid. You can use GSA.gov to see for how much General Services Administration (GSA) contracts are being awarded.
- Don’t be shy to reply and ask what the budget looks like. Ricky said most agencies will be willing to tell you what their budget is and that’ll help give you a ballpark figure.
If you’re struggling to put together your first proposal, Ricky said you can find someone on Upwork with experience writing proposals.
Seeing how a proposal is written up by someone with experience and a track record of winning bids is going to be a huge help.
Examples of Clients Winning Contracts
Ricky shared a couple of examples of his clients who have won government contracts recently.
One was a woman who moves furniture for a living. She won a couple of contracts at $16k/ea moving office furniture.
Another was a woman who ran a helpdesk service. From reaching out to the offices and using requests for information, Ricky was able to see that the government was transitioning from its legacy helpdesk system to a new system that helped people with disabilities.
His client was able to tap into that need to move from one specific type of helpdesk system to another. For the past two years, she has billed around $1 million a year.
“I’m excited about increasing the number of small businesses selling to the government,” Ricky told me.
Ricky has recently put together a certification program as part of his academy that takes students through the steps of winning government contracts.
If you want to learn more and enroll in Ricky’s training program, he’s created a coupon code for Side Hustle show listeners that’ll give you 1-month free.
Head over to DoDContract.com/academy and type “THESIDEHUSTLESHOW” in the coupon box to claim your free month.
Ricky’s #1 Tip for Side Hustle Nation
“It’s a marathon, not a sprint.”