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Aspiring 8a

GSA – Does Your Business Only Take Money Orders?

The federal market is not a uniform homogeneous market where all buying occurs the same way. In order for a federal buyer to make a purchase, they need a FAR compliant way to conduct the transaction. This often makes it hard for firms new to the federal market to navigate this process. In many cases, they are not set-up for easy transactions with federal buyers. For your understanding, I am going to explore (and explain) what your firm looks like to a federal buyer as if they were in the private sector.

 

Registration in Sam.gov = We Only take Money Orders
Simply registering your firm in Sam.gov and going out and looking for federal business is like telling your private sector customers “Sorry we only take Money Orders, please conform to our preferred method of payment.” If you have a completely novel product that people are in love with, people will go through the hassle of obtaining a Money Order and using it as the form of payment. Imagine what you would likely do if another vendor took a more convenient form of payment.

 

SBA/VA Certification = We Now take Checks
SBA Certifications are designed to cut out a lot of the red tape during the federal buying process. In doing so, the different certifications give agencies the ability to award set-aside and sole source contracts. Because these contracts are set-up more or less on a one-on-one basis, it is very similar to a business having its customers “Pay by Check”

 

As you can see by the results, Small businesses in the federal marketplace average $366K in annual sales.

 

Category

Annual Federal Sales

# of Firms

Average Sales

Small Business

$132,900,000,000

363,000

$366,116

 

8(a), HUBZone and SDVOSB outperform small businesses as a whole by many, many times. Due to the small size of many of its participants, the WOSB Certification does not do as well as small businesses at large.

 

Category

Annual Federal Sales

# of Firms

Average Sales

SDVOSB

$22,000,000,000

26,297

$836,597

WOSB

$26,000,000,000

96,488

$269,464

8(a)

$51,600,000,000

6,598

$7,820,552

HUBZone

$11,400,000,000

7,774

$1,466,427

 

GSA Schedule = We now take Credit Cards
The GSA Schedule in fact gets your firm set-up to take the federal buyers’ Credit Cards. A GSA Schedule provides a widely used contract vehicle that can be used by all agencies within the federal government.

 

GSA Schedule holders generally have higher sales levels than non-schedule holders. And SBA/VA Certification holder generally benefit by the synergy of having both a Certification and a GSA Schedule.

 

The sales figures are GSA Schedule Sales only. But as you can see, the sales that occur for small businesses that have a GSA Schedule are 3x what they are for Sam.gov only registered businesses. We also see that firms with SBA/VA Certifications all benefit by over $1MM annually by having the use of their schedule.

 

Category

GSA Annual Federal Sales

# of Firms

Average Sales

SDVOSB

$2,398,200,000

1,449

$1,655,072

WOSB

$3,673,900,000

3,401

$1,080,241

8(a)

$2,464,000,000

1,635

$1,507,034

HUBZone

$1,150,000,000

885

$1,299,435

Small Business

$13,766,700,000

11,956

$1,151,447

 

Having a GSA Schedule is not the only thing leading to the success of these firms. However, imagine only allowing your customers to pay with Money Orders for a week, then consider the difficulty of that sales process.


A GSA Schedule is great early step when entering the federal marketplace. Coupling that with a federal certification such as an 8(a) Certification can exacerbate your future business development potential even more. If you are interested in exploring your firm’s potential in federal contracting, I always recommend contacting an industry expert such as ez8a, Advance GSA, Advance 8a or Government Marketing. None of them charge for an initial consultation.

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