Small businesses hoping to cash in on government contracting jobs might be better served by first winning subcontracting work, says an article in the Wall Street Journal.
While the federal stimulus plan has poured billions of dollars into municipal projects, experts warn that small businesses with little experience working with government agencies may get in over their heads.
By subcontracting, businesses can make money while learning about the many requirements necessary for direct contracting work. A smaller business doing subcontracting work also can build a reputation in the industry and gain valuable contacts that might lead to more lucrative contracting work in the future.
Small businesses can find out more about subcontracting opportunities by networking at federal agency meetings, trade shows, conferences and events sponsored by the Small Business Administration and industry associations, said the Wall Street Journal.
Businesses should also check out Web sites such as the Federal Contracting Network at www.tfcn.us and at www.mySBX.com. The SBA’s Subcontracting Network (www.sba.gov/subnet) posts opportunities from contractors.
Business owners should be ready to explain how they will add value to a job. Melinda Warren, a corporate executive who frequently hires subcontractors, told the Wall Street Journal she “wants proof of past performance, information about present capabilities and insight into prospective subcontractors’ business approach.”
A business should fully understand any contracts they enter into and even consult an attorney so terms and conditions are absolutely clear. Finally, experts warn that low-balling on a bid just to win the contract could very well lead to problems down the line.
This article was submitted by Katie Kapler, Director of Online Strategy for Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to firstname.lastname@example.org.