Government Contracting Basics

Are you currently bidding on contracts or maybe you would like to get into the game of bidding on contracts? Below are several reasons for any business to have a certification.

Businesses who DO bid on contracts

Businesses who do bid on contracts will find that becoming certified by the State or the Federal Government will allow them to bid on new opportunities not available to them otherwise. Both the State and Federal Government set aside funds for certified companies. State and Federal agencies are required to designate a percentage of their contracts to certified agencies. Being certified not only increases your chances of getting new contracts, but it allows you to do it with less competition thus increasing your chances of winning the bid.

For Example: If there are 1000 machinists in the city they would all be able to bid on a particular contract that the Government makes available. Some are larger then others, therefore giving them the advantage of underbidding their smaller competitors and winning the bid. What if from those 1000 machinists only 100 were certified with the Government as a Small Business? If you were one of the 100 certified, you would only be competing against 99 competitors rather then 1000, thus significantly increasing your chances to compete in a fairer playing field.

 

Business who DO NOT bid on contracts

During time of uncertainty, consumers are looking to do business with people they can trust. Money is scarce nowadays and people are weary about spending as frequently as before. Gaining a new customer is the most difficult business activity. This is because you as the service provider must convince the consumer that not only are you trustworthy, bur rather you can get the job done at a reasonable price.

What makes someone choose one service over another? Most of you would say price is a key deciding factor, which is true but people are willing to pay a little more for quality. For instance, a friend of mine owns an insurance company (he mostly sells business and personal insurance). After having multiple discussions with him regarding his business, he consistently tells me that he is not the cheapest price in town. The reason for his success has been due to the legitimacy he has been able to establish amongst his peers. People are willing to pay a little extra for his knowledge knowing that they will get unmatched service.

Imagine for instance that you need to purchase a custom made machine from a manufacturer. You have two options: 1. A company that has been in business for 5 years or 2: A company that has been in business for 5 years and is Federally Certified.

Being designated as a certified business with the State or Federal Government gives you more legitimacy!

 

As Small Business owners we all need help to get ahead and becoming certified with the State or Federal Government will allow you to significantly increase future revenues. Visit our Certification link HERE.

 


Paul Mazbanian (2011 SBA Young Entrepreneur of the Year – Los Angeles District Office)
SBC Lending
http://www.sbclending.com/