Everything in life has its advantages and disadvantages. One of the things that have its pros and cons is selling goods and services to the United States government.
Why Sell to the Government? The key advantages of selling goods and services to the U.S. government is having a customer that can be trusted to pay for the goods and services it uses in a timely manner. Another reason is because of the amount of money the government is willing to pay for the goods and services; according to SBA.gov, the U.S. government purchases over $95 billion worth of services and goods from small business annually. The third reason for becoming a government contractor is because doing business with the government helps to establish a person’s business as a credible entity to other potential customers.
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"The Pros and Cons of Selling to the US Government".
One of the key disadvantages of contracting goods and services to the United States government is not being able to know whether or not the government will continue to be a buyer after the initial purchase of goods and services. For example, the government, like anyone else, is on the lookout for quality goods and services for a low fee. Although a company may be doing business with the government for a reasonable amount of money the government could find another company that can handle their goods and service needs for a lower cost, which could lead to a deficit in income. Another drawback is that the government can break their contract with a company at any time if it is for the benefit of the government.
The Purchasing Power of the U.S. Government. A lot of business owners may be hesitant to do business with the U.S. government because the practice of selling to the government may seem too foreign and scary to them. According to the U.S. Department of the Treasury, there are a few ways that government and commercial contracting differ. One of the ways is that the government is able to sever a contract at any time if it is for the benefit of the government, unlike that of another consumer who must adhere to a contract that they have made with a business. Government and commercial contracting also differs by the way that contracts may be arranged, which could prohibit how much a company can earn through the government.
If I had a position where I had to advertise goods and services to the United States government I would first register my business as a government contractor. I would then start networking to get the word out about goods and services and my last marketing tool would be to find the need that the U.S. government has and determine how my goods and services can fulfill their demand.
- Beesley, C. (2012, February 8). Selling to the government – get started with these 5 steps. Retrieved from http://www.sba.gov/
- Part i: Major differences between commercial and government practices. (2010, November 13). Retrieved from http://www.treasury.gov/
