Should Your Small Business Become A Government Contractor?


As an entrepreneur or small business owner, you’re always looking for ways to grow your business. One option you might not have thought about is getting a government contract, which means you’ll be working for the government.

It might sound complicated because there are a lot of rules and lots of competition, but it can really pay off.

Let’s look into why, when, and how your small business should consider this chance.

Benefits of becoming a government contractor

  1. Stable and Reliable Work

One of the most appealing aspects of government contracts is their stability. Governments often require ongoing services and products such as IT, construction, research and development, security, and office supplies, to name a few, which means short-term and long-term contracts. 

Additionally, unlike some private-sector clients, government agencies are generally consistent and reliable regarding payment, offering a degree of financial predictability.

Although government contracts provide steady and reliable work, they can be tough to get started or continue for numerous reasons, such as needing to hire staff and vendors to fulfill the contract.

This is where partnering with companies vetted by the government, like LEONID, a member of the Department of Defense Trusted Capital Provider program, can help get you through those issues and hit the ground running.  

  1. Potential for Business Growth

Government contracts are often much bigger than those in the private sector, offering big chances for business growth. Plus, small businesses get a boost from a law that says 23% of government spending on contracts should go to them every year.

This means lots of chances to grow your business, buy new equipment or tech, and bring on more team members.

  1. Prestige and Credibility

Working with the government can make your business look good. It shows your products or services are top-notch and reliable. This good reputation can attract more private clients who like working with businesses that have handled big projects and are trusted by the government.

Market and preparing your business

To start getting government contracts, a small business needs to do some homework. Use to see which government parts might need your products or services.

To know the Federal Acquisition Regulation (FAR) – it’s key to understanding how the government buys things.

Get your business ready by signing up in the System for Award Management (SAM), getting important certifications (like for small disadvantaged or woman-owned businesses), getting a DUNS number, and figuring out your NAICS codes.

If your business is a small disadvantaged or woman-owned, it gets easier to win some contracts. This is because certain contracts are only for businesses with these special labels, which means less competition.

Identifying opportunities and preparing bids

Use websites like to look for federal contracts and state websites for local ones. Learn how to understand and reply to Requests for Proposal (RFP) and Requests for Quote (RFQ).

When making a bid, make sure it fits the contract well, clearly shows your skills, and offers good prices. Your bid must also meet all legal and financial rules listed.

Adapting and continuous improvement

Keep up with changes in government contracts and change your plans as needed. Always ask for feedback on your bids, especially the ones that don’t win, and use what you learn to do better next time.

This way of always learning and adapting is key to doing well in government contracts over time.

Essential considerations before bidding on a contract

  1. Navigating Regulations and Requirements

Government contracts come with a web of regulations and compliance requirements. Understanding and adhering to these is crucial. This could involve understanding federal acquisition regulations, adhering to specific industry standards, or obtaining necessary certifications.

  1. Resource Investment

The process of securing a government contract is often resource-intensive. You’ll need to dedicate time and personnel to understand solicitations, prepare detailed proposals, and invest in specialized legal or consulting services.

  1. Meeting Contractual Obligations

Before bidding on a contract, assess your capacity to fulfill it. This includes evaluating your operational capabilities, financial resilience, and human resources. Defaulting on a government contract can have serious consequences, both legally and for your business’s reputation.


Jumping into government contracts can really help your small business grow, bring in steady money, and make you look good in the market. But, you’ve got to get ready carefully, really know what the government wants, and stick to top quality. It’s tough, but with the right attitude and plan, it can pay off big time.

Keep in mind, winning in government contracts takes time. It needs a smart plan, patience, and toughness. With good planning and action, your small business can use government contracts to grow.

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