As a small business owner, you may be considering becoming a government contractor. While this decision has many benefits, it also has disadvantages that are important to consider before committing. We will explore the challenges and benefits of being a government contractor and how AWS can help you grow as a government contractor.
Benefits of Being a Government Contractor
One of the biggest pros of being a government contractor is work stability. The government always pays its bills even during a recession, which means a consistent demand for goods and services to meet the needs of each government agency. This creates an excellent opportunity for small business owners needing help finding steady work to keep their doors open. Additionally, government contracts usually come with monthly payments for work completed, which means a steady cash flow that can significantly help small businesses. If the government is late paying their invoices, government contractors can still access the funds they are owed by using services such as government contract factoring through specialized factoring companies.
Another benefit of being a government contractor is that every government agency is required by law to offer a contract to small businesses and minority-owned businesses. These contracts can run from $25,000 to Millions of dollars. Therefore, winning a government contract can be a great opportunity for small business owners to break into the government contracting market and gain experience when working with government agencies. Gaining experience working with the government also increases any small business's reputation as a reliable contractor, which can lead to more business opportunities in the future, making it an essential step to growing and expanding the business.
Opportunities for Diverse Business Sectors
Government agencies have many needs, which means that as a government contractor, there are multiple opportunities in diverse business sectors. Some of these sectors are construction, IT, engineering, healthcare, cyber security, and janitorial. Additionally, there are often set-aside programs for businesses owned by women, minorities, and veterans, which can provide even more opportunities for diverse business sectors.
Challenges to Small Business Owners
However, being a government contractor also comes with its own set of challenges. One such challenge is the strict regulations that must be met in order to be considered and win a contract. This can be a significant barrier for small business owners, who may need more resources or expertise to navigate the complex government contracting process, such as taxes and legal requirements. Additional challenges small business owners face are:
- Cash Flow- Managing and maintaining can make the difference between success and failure.
- Competition- Steep competition for a contract can make it difficult to win work.
- Staffing- Attracting and, most importantly, retaining talent.
- Technology- With limited resources, obtaining the latest technology and keeping systems safe and reliable can take time and effort.
- Scalability- Without sufficient resources and support, growing and expanding operations can be hindered.
Helpful Resources
There are many resources government contractors can use to help them fulfill their contractual obligations or gain confidence in bidding on contracts. For example, partnering with a specialized factoring company that offers government invoice factoring can help with cash flow and staffing. In addition, using services such as AWS (Amazon Web Services) can help small businesses be scalable and have access to the latest technology. Below are some of the other benefits AWS brings to small businesses.
- Cost Savings: Provides a cost-effective and flexible solution, saving the investment you typically need for traditional IT infrastructures.
- Reliability: Get access to a reliable platform with built-in disaster recovery options.
- Innovation: Access a wide range of tools and services for data analysis, machine learning, and application development.
- Security: Provides a secure infrastructure, a range of security tools, and services to protect client data.
Being a government contractor can be an excellent opportunity for small business owners. Still, carefully weigh the advantages and challenges and commit to preparing as best as possible. The promise of consistent work, opportunities to work for different industry sectors, and telling potential clients the government is a current client is a great incentive to try to obtain a government contract, no matter how small it is. Even with the challenges a small business faces, from cash flow issues to technology advancement and scalability obstacles, partnering with the right financing company or web services like AWS can help get a small business one step closer to growth. Considering these factors and carefully evaluating whether becoming a government contractor is the right decision for your small business is essential.
