Women-owned businesses earned $22 billion in federal contract spending last year – but that figure accounts for less than 5% of total contracts awarded, according to data provided by American Express. In Los Angeles County alone, the U.S. government awarded $11 billion in contracts to businesses last year.
“Imagine 5% of those numbers. That’s a hefty spend for women-owned businesses literally in your backyard,” said Gloria Larkin, president and CEO of TargetGov, a national consulting services and business development products provider that is focused on helping companies win federal contracts. Larkin also serves as a contract procurement advisor for American Express, assisting in their small business education efforts.
Larkin noted that it’s her goal to see at least 5% of federal contracts awarded to women-owned businesses. “There is room for improvement, and it’s an ideal time for businesswomen to take a look at this [government] customer to see if it’s a good match for them and their business, no matter if they are providing products or services,” she said.
According to Larkin, the first step for women interested in winning this business is to expand their view of what goods and services the federal government might need. She noted that recent research by American Express revealed that 15% of women-owned businesses in the U.S. are health care or social assistance oriented, and that 13% are in the professional, scientific and technical services category. This includes business types such as law or accounting offices, or even public relations. “Those services are perfect matches for what the federal government buys,” she said. For example, many types of government offices – from Veterans Administration to Social Security facilities – are in need of day care centers, she explained.
Larkin continued, “But I don’t want to forget some of the basic kind of retail-oriented services, like even hair and nail salons, and pet care businesses. The reason I bring those up is if you think of a military base, everyone at the military base needs those types of services. So women business owners could really position their business beautifully if they would locate it near a military base, or even a government office complex.” She added, “If one thinks creatively, virtually every service or product that one offers could be targeted for the federal government customer.”
There are two primary ways to benefit from government contracts, according to Larkin. “One is becoming a prime contractor. That means the government buys directly from you and pays you directly,” she said. “That’s a big challenge, because there are legal responsibilities, there are reporting responsibilities. . . . It’s not insurmountable, though.”
A less burdensome approach is to become a subcontractor. “An easier way to enter the marketplace is often as a subcontractor, where you are essentially working with another company who has the prime contract and then they subcontract [with] the women-owned firm to provide the services or products that she offers,” Larkin explained.
According to Larkin, whose firm has advised business owners on winning federal government contracts since 1997, the federal government contracting market is one based on relationship-building – an area in which she believes women excel. “Buyers want to know who you are. They want to trust that you can do what you say you can do. For women, that comes naturally in building strong, trusted relationships,” she said.
But winning a government contract isn’t as easy as getting past a handshake. There is a significant paperwork burden and many requirements to be met, Larkin said. “Something as simple as registering on a website called SAM.gov/SAM is the first step. It’s totally free, but it’ll take a little reading and understanding in order to get registered.” SAM stands for “System for Award Management.” The website is a public resource for business owners to register to do business with the government.
Other government resources include SBA.gov, the website of the Small Business Administration, and FedBizOpps.gov, which lists government contracting opportunities. “The great news is you don’t have to make a big investment in order to start educating yourself and start tackling the federal government marketplace, but you do have to spend time,” Larkin said.
Business owners need to be sure to educate themselves before going after contracts, Larkin advised. “Educating oneself about the financial demands of being a government contractor [is] an important step to take,” Larkin noted. Small Business Development Centers (SBDC) are a “perfect resource” to gain literacy about government contracting and other business needs, she noted. Long Beach has its own SBDC – learn more about the resources it offers at longbeachsbdc.org.
Larkin noted that American Express has partnered with the SBA and the organization Women Impacting Public Policy to put on free events for businesswomen to learn about the government marketplace. The nearest event in the series, called ChallengeHER, takes place in San Diego on October 29. For more information, visit challengeher.us/events.