Want to grow your business in a whole new direction? Consider marketing your goods and services to a federal government agency. Uncle Sam spends over $500 billion annually in goods and services procured from a variety of small, medium and large businesses – and in fiscal year 2012 (October 2011-September 2012), federal contract spending with women-owned small businesses (WOSB) amounted to $16.2 billion.
To understand more about how and why small business owners get involved in the federal procurement marketplace, and their challenges and successes, American Express OPEN and Womenable have conducted a series of surveys among the women and men small business owners who are active federal contractors. Here’s some of what we’ve learned:
- It takes time and money: In 2012, active small business contractors invested an average of $128,628 in time and money during the course of the year seeking federal procurement opportunities. This includes the time spent attending meetings and seminars, investigating opportunities online or in person, and preparing and submitting bids. Women business owners invested somewhat less – $112,112 – but were every bit as successful. On average, it took women-owned firms an average of 20 months and 4.3 bids before winning their first contract; very similar to the 25 months and 5 bids that it took men-owned firms.
- Perseverance pays off: Once small firms are actively engaged in federal contracting, women-owned firms are every bit as accomplished in terms of business size as are their male colleagues. While in general, among all firms, women-owned firms are smaller than average, among active small business contractors, 31% of women and 30% of men employ 50 or more workers in their firms, and 42% and 48%, respectively, generate $1 million or more in revenue. Selling to the federal government can lead to substantial business growth!
- Policies matter: Back in 1994, the federal government established a 5% spending goal for federal agencies to encourage contracting with women-owned small businesses. That goal has never been met, but in fiscal year 2012 it reached 4%. There’s hope that the goal will finally be reached by virtue of a recently-established WOSB Procurement Program, which gives federal agency procurement personnel more flexibility in letting out contracts for bids (including lifting prior caps on the value of contracts that could be awarded to women-owned firms). From the perspective of active women business owner contractors, the program is starting to find its footing. Back in the 2011 survey, when the program was just launched, just over one-third (37%) of women surveyed said they found the program useful in seeking federal contracting opportunities. Now, in the 2013 survey, the view has improved considerably – fully 61% find the program useful, including 28% who find it very or extremely useful. With this playing field-leveling policy, more and more women are finding federal procurement success.
And federal contracting opportunities abound across the country, not just inside the Washington Beltway. See if there’s a Procurement Technical Assistance Center near you, or visit your nearest Small Business Administration (SBA) district office to learn more about what might be available in your community. The SBA is collaborating with Women Impacting Public Policy and American Express OPEN in a national initiative, ChallengeHER, designed to boost government contracting opportunities for women-owned small businesses. ChallengeHER hosts free events throughout the country to help women business owners learn the ins and outs of government contracting and get direct access to government buyers – so check and see if there’s an upcoming event in your area.
And, from the convenience of your office computer or smartphone, learn more about the steps involved in entering the federal procurement marketplace at www.openforum.com/governmentcontracting . With a little digging, you may well find that a federal agency is in need of the goods or services your business provides. If so, an investment of time and resources could yield an incredible growth opportunity for you and your business!
~ Julie R. Weeks is President and CEO of Womenable, and American Express OPEN’s research advisor on women’s entrepreneurship. Learn more at womenable.com .