For many female business owners, the shortest route to a million in revenues runs through Washington.
All business owners, especially women owners, know that getting to a million in revenues is a tough hurdle. But there is one way to lower the bar: government contracting. Almost half of the small businesses that are active federal contractors have business revenues in excess of $1 million, while only 5% of small businesses overall have broken the million-dollar barrier, according to soon-to-be-released American Express OPEN research for 2011.
Better yet, in the federal-contracting ecosystem, female-owned businesses seem to be on remarkably even footing with the male-owned competition. “Once you get through the pearly gates of [federal] procurement], the success rates are very similar for all small businesses,” says Julie Weeks, the CEO ofWomenable and the American Express OPEN Research Advisor behind a recent report on federal contracts for small businesses. She notes in the report that the estimated life-time value of federal contracts doesn’t differ by gender or race once businesses have experience with federal contracting.
But isn’t federal contracting all about airplanes and highways? Not at all. It’s also about healthcare benefits management, technology, professional services, catering or, as Hester Taylor-Clark found out, communications and program management. She is the founder of Hester Group, a multi-million dollar business that grew 175% from 2010 to 2011, largely due to federal government contracts.
Like other women owners, Taylor-Clark benefitted from a 5% set-aside for women-owned businesses. In 2010 that translated to quite a bit of work for women-owned businesses. “In that year, $18 billion was awarded to women-owned businesses,” Lourdes Martin-Rosa, American Express OPEN advisor on government contracting, points out. “There are fewer than 80,000 women registered [as women-owned contractors]. Do the math. That’s a large chunk of money to each one.”
Landing one of those contracts takes some investment, however. On average, it takes four tries at a federal contract before you win one, according to Weeks’ research. Moreover, the competition will only tougher as government budgets contract.
In other words, the sooner you get started, the better.
First step: Learn what products and services the federal government wants and the way through the procurement maze. Check out:
- SBA information on federal contracting
- Procurement Technical Assistance Center
- Give Me 5 which provides women-owned businesses with education and access to federal contracts
- USA Spending, which shows the products and services the federal government wants
The next step may be as a subcontractor to an experienced prime contractor. Or team up on a bid with other small businesses. Either way, you’ll learn the system and build a track record so the next contract comes quickly … and the next and the next.
Seasoned owners say that becoming a successful federal contractor is almost like starting your business all over again. You need an accounting system that can provide the data each agency wants (each federal agency has differing requirements); a marketing program that appeals to procurement officers and highlights your expertise and track record as a contractor; and the right paperwork, in this case accreditation.
But once through those pearly gates, you have a customer who pays on time and quickly, often with multi-year contracts, and tells you what will be needed next year so you can plan ahead. And this is a customer that any woman owner can reach, as long as she has the right product and right amount of persistence. As Martin-Rosa says, “The only thing that sets [successful federal contractors] apart from you is that they registered and networked.”
Geri Stengel is the founder of Ventureneer.com, which connects socially responsible businesses with the knowledge needed to make the world better while thriving as businesses. As an owner herself, she understands the unique challenges women face when growing their businesses beyond $1 million.