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Why Start-Ups or Entrepreneurs Should Consider Becoming a Government Contractor

Becoming an entrepreneur or founder of a start-up sounds very appealing to many people these days. Perhaps all will go well, and you will become a billionaire and start your foundation! 

But as many successful entrepreneurs and start-up owners will tell you, it isn’t always easy. In fact, 90 percent of start-ups fail. There are many reasons these ventures fail, but finance is the critical factor in most cases.

That’s why entrepreneurs and start-ups should consider becoming government contractors. Alongside access to finance to keep the lights on; here are six more reasons to take the plunge and apply for a government contract: 

1. Access to Funds When You Need It

As we’ve covered above, becoming a government contractor is attractive because you can access the funds required to grow your business and scale quickly. It’s like getting early venture capital funding without the risk. 

Typically, small businesses that work as contractors for the government get paid in 30 days. But even if you need money before that time, government contract financing can be an easy way to access business cash flow and capital 

2. Small Businesses Get Special Consideration

At least 23 percent of the federal government’s budget must be devoted to small businesses. Several small businesses have been awarded federal government contracts and made fortunes.

So, compared to other industries where the most prominent and influential players get big contracts, the government’s small business policy allows small firms to stand out and succeed.

The government is open to considering your businesses for contracts as long as you meet the qualifications.

3. Ability to Scale Quickly

Government contracts offer long-term deals and usually last between one and three years, but some government contracts can last much longer. 


This opportunity offers businesses the chance to build a stable cash flow without relying on funding from venture capitalists or angel investors. Your business can also quickly build its cash reserves and scale its workforce. 

4. Government Contracts are Long-term and Stable

Another benefit of becoming a government contractor for entrepreneurs and start-ups is the stability that comes with it. 

Of course, government contracts are usually long-term, which can give your business a more stable cash flow. But some other industries can also offer you long-term deals. 

The government contracting industry stands out during times of uncertainty, like the COVID-19 pandemic. While most businesses shut down, the government had to keep operating. As a government contractor, you reap the benefits of this situation. 

5. Increased Market Visibility

There is no more prominent customer than the government. Having the government as your client gives you clout and authority in the eyes of other businesses and investors. 

And if you deliver successfully and consistently, your reputation will soar in a relatively short time.

6. Improved Business Efficiency and Reduced Costs 

While start-up businesses and entrepreneurs usually operate on a tight budget, working with the government can help you save significant sums of money on office leases and facilities costs, computer software and hardware, and so on. 

Plus, you will likely get to use government-provided software and other technology at discounted rates. Remember, you usually have to factor these costs into the price of your goods and services.  

The government can also help your start-up gain business efficiency, especially in hiring staff, training new staff, and accelerating the growth of your business! 


These are just a few reasons you want to seriously consider becoming a government contractor or selling to the government as a start-up or small business. 

You can access a wealth of resources through the Federal Business Opportunities website and other government portals to help your company grow and succeed. 

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