Going Where the Money Is

There is a lot of money available for small businesses in government procurement contracts, and some companies have figured out the special sauce for winning bids. American Express OPEN recently asked small business owners who have successfully received government contracts to share their strategies. Research showed that businesses should start by bidding for small contracts, and grow over time. Of those who have banked $5 million or more in contracts, 34 percent gained success by starting small. “One of the key pieces of advice that existing small business prime contractors give is to start small and work your way up,” says Julie Weeks, American Express OPEN research advisor. “Starting small can mean becoming a subcontractor. Subcontractors are far more likely to eventually become prime contractors.”

Another important component to government contract procurement is engagement in networking and learning opportunities. Almost half of small business contractors have

attended agency-sponsored informational meetings or seminars.

While the benefits of government procurement can be extraordinary, it’s not a cheap endeavor. Active contractors estimate they spent more than $86,000 in cash or staff time and resources, just in one year, seeking contract opportunities. How long could it take to get a contract, while spending an incredible amount on bidding and searching? Research estimates two years on average.