One question I get a lot from the many women entrepreneurs I work with is whether being a woman-owned business will make it easier to get government contracts. The short answer is that being a woman-owned business may make it easier to get into the lucrative government market — but by no means easy. The processes and benefits of becoming certified as a woman-owned business are complicated, often less beneficial than you might think, and offer no guarantee of actually getting a government contract. While government agencies and entities do sometimes give preference to women-owned businesses, the benefits are actually quite weak compared to the preferences given to other types of businesses.
Whether woman-owned or not, at the end of the day it really only makes sense to go after government contracts if that market is firmly part of your business plan and you are committed to the significant work involved in getting prepared for this market. There are lots of resources to help entrepreneurs navigate the wild world of government contracting including Procurement Technical Assistance Centers (PTACs) which help businesses understand and prepare for government contracting and navigate the processes of becoming a vendor. To find a PTAC near you see www.aptac-us.org. Also check the Small Business Administration (SBA) site at www.sba.gov and click on the “Contracting” link for more info on selling to the government.
If you decide you do want to pursue selling to the government, here’s a quick, radically simplified rundown of the process involved (excerpted from The Women’s Small Business Start-Up Kit):
Registering as a federal vendor is a somewhat involved process. As I mentioned at the beginning of this section, make sure that government contracting is a reasonable part of your business plan before wading into these waters. Government contracting can be really lucrative for businesses that are prepared and committed to this market; if you’re not ready, it will only waste a lot of your valuable time.
Here’s a general outline of the steps involved in getting started.
- Find out your NAICS code(s). The NAICS (for North American Industry Classification System) code is a five-digit code identifying your type of business. It’s not uncommon to have multiple codes for the different business activities; some businesses might have 20 or more codes. You’ll need to know your NAICS code(s) before you can register as a federal vendor. You’ll find a list of NAICS codes at www.census.gov, or Google “naics codes” to find your code(s).
- Get a DUNS number. Again, you’ll need this before you can register as a federal vendor. A DUNS number is a unique nine-digit identification number assigned to each physical location of a business. These numbers are issued for free by Dun & Bradstreet; go to www.dnb.com to get yours.
- Register at the Central Contractor Registration (CCR) database. This is the database of federal vendors. If you’re not in the CCR database, you basically don’t exist to the federal government.
- Apply for any certifications for which you are eligible. You’ll indicate self-certifications when entering your business into the CCR database. Other certifications such as 8(a) or WBE certification are completed at the SBA or other organizations.
- Look for contracting opportunities. This sounds obvious but it can be one of the hardest parts of government contracting. There are many different resources you can use here. One primary one is to sign up for FedBizOpps which will notify you of contract solicitations and requests for proposals. Also, as described above, research individual agencies and their record of hiring WOSBs. This may be a consideration in which agencies you want to target.
- Look for subcontracting and partnering opportunities. Government agencies generally require past government contracting work before they’ll hire you. The best way to get this experience is through subcontracting, working for the businesses that have the government contracts (called the “prime contractor”). Research which firms have government contracts and market your business to them. Note that prime contractors often use contracting preferences like the federal government does, so you can market your business to a prime contractor who is falling short of its 5% goal of contracting with WOSBs.
—From The Women’s Small Business Start-Up Kit, 2nd ed. (Nolo).