You’ve heard the phrases before: government contracting and small business certification, but what do they really mean? And does it really matter for your small business? Maybe — and maybe not. Let’s cut through all the noise and define these phrases in a meaningful way for your entrepreneurial endeavors.
What is government contracting?
Government contracting is the process that lets you sell your goods or services to the government and its various agencies. The government has a contract or agreement with you, whereby it purchases what you do or make. And U.S. government agencies buy a lot from small businesses — nearly $100 billion worth of goods and services each year! From market research to janitorial services, if you want to make the government your customer, there’s a good chance there’s a need for what you offer.
So, what does it mean to be certified as a “small business”?
Being certified as a “small business” is only significant if you’re interested in government contracting. Why? Because there are certain set-asides that the government must adhere to when they’re looking to buy goods or services – there’s a percentage of business set aside for different kinds of companies, including small businesses. (Others include women-owned, veteran-owned, etc.) So if you want to be a contender in the federal marketplace, your small business has to meet official criteria to be eligible for government contracts.
How do I certify my business as small?
First, make sure you do, in fact, have a small business. For most industries, SBA defines a "small business" either in terms of the average number of employees over the past 12 months, or average annual receipts over the past three years.
Then, when you know you adhere to the size standards, you register for government contracting. This process also serves the purpose of “certifying” your business as small.
Where can I get help?
Starting out in government contracting can be overwhelming, but SBA has resources to help:
•The Government Contracting Classroom: Online, self-paced training courses to fill you in on the government contracting landscape — from starting out to special programs.
•Procurement Technical Assistance Centers (PTACs): PTACs offer local, in-person counseling and training services to businesses that want to sell products and services to federal, state and/or local governments.
•Selling to the Government – Get Started with These 5 Steps: A five-step plan that summarizes the process of entering the federal marketplace, plus links to additional resources.
K. Murray is an author and moderator for the SBA.gov Community.The New American Chamber of Commerce (NACC) offers seminars on government contracting and certification. For more information, visit www.mynacc.org