Selling to the Federal Government

The US Federal government can be one of the best customers.  Here the top reasons why you should consider selling to the Federal Government.

Unlike states and other municipalities, the Federal Government pays their bills on time (and doesn’t run out of money). It isn’t a secret that the government prints money as it wishes, so you might as well be on the receiving end.

Each department will always spend at least the same amount as the year before. While the Federal Government is technically a single entity, the reality is that there are many agencies and individuals with their own interest.

Because of these self serving interests, each department will make sure to spend their “use it or lose it money” every year

The government purchases everything from single paperclips, to Aircraft Carriers (and everything in between).

If you are a manufacturer, there is a pretty good chance that someone in the government may need to purchase it.

The government not only purchases finished goods, but is also a large buyer of raw materials.

The government purchasing card program (IMPAC) has created a huge market of potential decision makers.

Micro purchase limit  credit cards create a large hidden market opportunity. Individuals p-card holders have the discretion to spend up to $3,000 per transaction without having to do any research or competitive bidding.

This is the biggest spending loophole, and provides individual decision makers with a huge about of discretionary decision making authority.

Value is determined by factors such as reasonable price (not necessarily always the lowest), and timely/reliable/quality service.

A savvy business owner can quickly see that there is a lot of wiggle room in the best value clause (i.e. the opportunity and value in building relationships).

Selling to the Federal Government can be a profitable venture, if strategically planned. If you are interested in doing business with the US Federal Government, the best way to get started is to follow the money trail. Here is a breakdown for 2009, by Agency. When reviewing these figures, keep in mind that figures include their internal spending as well (such at salaries) external spending.

With the total dollars spent in the Federal Government, it is certainly viable to do business with government end users.  One of the ways to get your foot in the door is to use a GSA schedule. The key is to find a proper niche, using research. Here is an example of a potential niche, with full research.