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there are several key Items you should consider before you can determine if you can afford to sell to the government?
Before you determine if you can afford to sell to the government, you should consider the following: |
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How often does the government purchase what I’m selling?
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Often and in high volume
Often and in low volume
Rarely and in high volume
Rarely and in low volume
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Does the government buy your product or service in sufficient volume that notices would be posted on government websites? Do you provide a high dollar commodity or a service valued above the dollar threshold that the agency has set for posting upcoming solicitation announcements to the internet? Posting requirements vary from agency to agency. |
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Is a sales history available for previous purchases, including the previous contract winner, date of award, total price, total quantity, and period of performance? |
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What type of marketing effort is required to sell my product or service? |
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Can I sell by searching for and replying to posted RFQs, IFBs, or RFPs (Request for Quote, Invitation for Bid, Request for Proposal)? Is my product or service purchased regularly, or at least annually? |
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Do I need to market directly to a purchasing agent? Is my product or
service new, require explanation, highly technical, sold in small quantities, or low priced? |
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Can I tolerate the generally longer payment cycle typical with government sales? Payment for purchases made using other than credit cards may take 30 days, 45 days or longer. Can you maintain adequate cash flow and still cover payroll and bills? |
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Can I tolerate the method of delivery selected by the government? |
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High volume
Low volume
Indefinite delivery, indefinite quantity (guaranteed price, guaranteed fulfillment for the term of the contract)
Shipping terms and conditions
National or international scope for delivery or service
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Am I able to get sufficient credit to allow coverage for upfront costs, such as manufacturing expenses, materials or labor, or to bridge an extended period before payment? |
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If I am in construction, can I meet minimum thresholds for bonding and insurance typical of the type of government organization I want to work with? |
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Check these requirements when you first review a bid package – if you cannot meet the requirements, you will not be eligible for the contract. |
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For more information on bonding, also known as “surety guarantees”
http://www.sba.gov/aboutsba/sbaprograms/osg/index.html |
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Contact your insurance agent or broker and discuss your coverage needs and how to furnish your insurance information to the government. |
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Ensure that you have considered all of the above and modified the financial section of your Business Plan. |
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If you have considered the questions above and have determined that you can afford to sell to the government, go to Step 6.
If you have considered the questions above and have determined that you cannot afford to sell to the government, go to No. |
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