[This blog is part of the Federal Business Accelerator. This topic is covered in much more detail in the free 90 minutes workshop.]
In this article we are going to talk about five important areas:
Small businesses are defined as firms with fewer than 500 employees. According to the US Small Business Administration (SBA), in 2022, there were 33 million small businesses which accounted for 99.9% of all the businesses in the US. Most US small businesses have no employees. Small businesses counted for 61.7 million business employees or 46.4% of all US employees.
We, however, are going to talk about a few ideas where you can start small and yet grow a sizable business, with little to no initial investments. These are not fluffed ideas but practical, sensible ideas that you can work on systematically to grow your small business right from home. One more important note about this article, we are going to give you a list of affordable resources that you can utilize to mentor yourself as you embark on your journey of growing your small business, which otherwise is not exactly easy to do yourself, alone.
First, let us look at some data provided by the SBA in the below tables. Professional, scientific, and technical services have the highest number of small businesses, approximately 3.7 million. Most of the small businesses are owned by men, non-veterans, and non-Spanish. The trick lies in growing the small business from a no-employee business to a business of about 15-20 employees and then expanding to a few hundred employees. The strategies for growth in each of these areas are substantially different, therefore in the Federal Business Accelerator, we have broken up the step-by-step roadmap for growth from $0 to $100M in the federal government marketplace. First, grow your small business from $0 to $3M, then from $3M to $10M, then $10M to $50M, and finally all up to $100M. You will find more information about this roadmap in the free workshop listed above.
SBA 2022 Small Business Advocacy Report; Source: Census Data (Table 1)
SBA 2022 Small Business Advocacy Report; Source: Census Data (Table 2)
First, we are going to discuss five key principles on which we have developed these ideas, so you know these are not just fluffed ideas that you find on YouTube videos or basic blogs!
#1: WORK FROM ANYWHERE IN THE USA
We want to make sure that we put forth ideas that can be worked on from any part of the US. And yes, there is a possibility to take these ideas and apply them in foreign countries.
#2: START SMALL BUT CAN GROW BIG
These ideas can start small as a one-person company and are easy but should be able to grow bigger, into much bigger programs with the possibility to create a lot of wealth.
#3: THE IDEA WORKS IN GOOD TIMES AND RECESSIONS
Everyone knows that recessions are always around the corner. So, we want to make sure that we create ideas that work in good times and bad times including future pandemics!
#4: FLEXIBLE TIMINGS ARE KEY FOR SMALL BUSINESSES
Nowadays everyone wants flexible timings, so these small business ideas must allow for flexible work timings so that you are not tied down from 9 to 9.
#5: WORK-FROM-HOME POSSIBILITY IS A MUST
Everyone wants to work from home nowadays, so we have considered this factor while creating these home/small business ideas.
What is the one common thing amongst the US, China, Tongo, New Delhi, New York City, and the Maldives?
Well, they all have either a federal government, state government, or local government all of whom spend a lot of money! And yes, our home/small business ideas deal with government opportunities.
So now let us talk about the creator of this idea — Nitin Pradhan. As the former federal executive and part of the Obama-Biden Administration, NITIN PRADHAN had oversight of over $3.5B in annual technology investments/acquisitions, over 3,000 IT employees, 10,000 technology contractors, and 200 major technology systems. In this unique position, NITIN met hundreds of government product suppliers, contractors, and startups each year — from the largest to the smallest who pitched to him for government business. What Nitin observed was that very few home businesses, small businesses, and startups even considered working with the government. And when they did, their approach to winning business in the government arena was haphazard, inefficient, and ineffective. He, therefore made it his mission to find smart, capable, and impactful, smaller businesses and educate and train them to win government opportunities. By bringing in such smart smaller companies to the government marketplace, NITIN’s goal is not only to help the companies themselves grow, but to also help the government build better services for businesses and citizens using smarter minds from these smaller companies. He does this through his unique accelerator program called the ScaleUP USA, Federal Business Accelerator.
There are approximately 33 million businesses in the USA. Of these, by our estimate, 98% don’t even try to work with the Federal Government. So, if you decide to attempt to work with the Federal Government you are already in the top 2%. The federal government spends money across the nation, so you’re bound to have projects right in your location. Add to it state and local government opportunities and you could be working right in your backyard!
Let us take the example of the US federal government. The US federal government is the world’s largest customer obligating approximately over $10.1 trillion in the fiscal year 2021 — including grants and contracts on products and services each year. In the fiscal year 2021 alone, the US Federal Government spent $7.5 Trillion on grants and fixed charges and $1.1T on contractual services and supplies. Just to give you a comparison, all the Venture Capital funding in the US in 2021 was about $330B.
Remember, the government spends in good times and in bad times. Therefore, once you learn to win government business you should be good even if the economy “tanks.” Remember, this is one of the best hedges you can have for your small business, therefore put in the effort, and create a great government practice now while you can.
So now let us talk about the small business ideas relating to the governments!
There are hundreds of thousands of companies that are working with the U.S. Federal, state, and local governments. The one thing all companies who work with the government need to do to win government contracts and grants is to write government proposals. If you know how to write winning government proposals, you can offer your services to any of these government contracting companies to write proposals for them that they can submit to the government.
You really can do it right from your home, in any part of the US, or globally with flexible timings. All you need is for you to have a good command of English, that you are organized, are systematic, and can learn some basic steps on how to write government proposals and you may be in business.
We have a resource called the Federal Business Accelerator (bundled program). You can use this resource to learn all about the federal government including how to write proposals. There is a very specific course on how to write winning proposals in this resource, do check it out.
Proposal writers can make a lot of money if they are good at it. Salaries can range anywhere between $30 to $50 an hour at the lower end to hundreds of dollars at the higher end. The more experienced you get the more salaries you will draw. Now of course you can start as an individual consultant writing proposals and later you can build it as a proposal writing company with additional consultants that you can bring in to offer to government contracting companies.
You can expand this idea further by hiring graphics designers, video producers, and others in the related field. Government proposals require good graphics in them and some nowadays even require videos. So, this can be a very big business that you can start with very little investment and grow large. Check out the possibilities by trying it out yourself.
Now one question you may have here is -- how do you find government contractors in your region to offer proposal writing services? This question is answered in the Federal Business Accelerator already!
Once you start getting expertise in the government marketplace, by working as a proposal writer and building some contacts and a network within the government and the government contractor community — the sky is the limit.
One of the other good opportunities that come by is to become a marketing agent for a company selling products or services to the government. It can be a federal, state, or local government. And yes, you surely should be having a government office nearby where you live which you can visit to sell your company’s products or services!
Marketing agents are hired to advertise and promote the products and services of a business to increase sales in the government arena. They also conduct market research for the company that hires them in areas like the preferences of the government customer, the price the government is willing to pay, and the amount quantity they will require.
Again, the key lies in understanding the government as a customer. We have made it easy by giving you a link to the Federal Business Accelerator resource. You can either use it or you can learn how to do it yourself. Within this Federal Business Accelerator, there are specifically a couple of courses that I would point you to, one is related to government market and business development, and another is related to government sales acceleration. Check them out.
Now let’s assume you started as a proposal writer, built some expertise in the government arena, then became a marketing agent for one or two companies and started selling their products to the government, how can you step up further? The next big opportunity lies in becoming a reseller of products and services to the government. Again, it does not matter whether it’s the federal government, state government, or local government.
So, what is the reseller and how does it differ from a marketing agent? A reseller is a company or individual that purchases goods or services intending to sell them rather than consume or use them. The chief difference is that the reseller buys the products and resells them. The marketing agent is supplied by the company that produces the product and is helping to sell it. There is more risk and capital required in becoming a reseller but as a reseller, you can make a lot more money. Some of the resellers in the government space are making billions of dollars of revenue each year. You could get to that place too.
Again, to become a reseller you need to have some experience selling products to the government, pricing such products correctly, and writing proposals in the process to the government. If you have worked on the above opportunity #1 and opportunity #2 in the past, this one could be right for you. Also, if you have been in sales and marketing in the commercial sector this could be a potential jump for you to move into the lucrative government sector.
If you have worked in the government arena as a proposal writer, marketing agent, or in the reseller arena you understand the government well and have already built great relationships with the government and government contractors.
One of the things which are easily possible then is to set up your small business supplying consultants (staffing agency) to government contractors and the government itself. The government and the contractors typically work on projects and programs. They both constantly need a steady supply of quality consultants. If you can supply consultants to the government or the contractor community, you can make a tidy amount by charging a markup to these consultants’ fees.
Let’s assume the individual consultant is charging you $50 an hour and you can charge the government $75 an hour, now you are making $25 an hour for just placing this consultant in the government practice. Let’s assume the consultant works for one year and that is roughly 2000 hours. Then your profit would be dollars 25 multiplied by 2,000 hours, this would be a profit of $50,000 a year on just one person. Now let us say you can place four people (individual consultants) like this, then you will make a clean profit of $200,000 a year. Not bad for someone not working full-time! There are a lot of strategies discussed on how to best place consultants in the government contractors, and in the government agencies themselves in the Federal Business Accelerator program. Check it out.
The highest level of small business opportunity you can get started with the government is to set up a government contracting company and you take government contracts or grants and complete them.
These could be short projects that complete within a defined budget and time, or they could be longer programs that could go on indefinitely. The US government has many set-aside programs set up to grow small businesses. If you live in a foreign country make sure to check out the opportunities in this space in your country too.
The US federal government gives special set-aside contracts! According to the US Small Business Administration (SBA), the current government-wide procurement goal stipulates that at least 23% of all federal government contracting dollars should be awarded to small businesses. The Biden-Harris administration is looking at increasing this percentage. There are currently four categories under which your small business can be certified:
Women-Owned Small Business — 5% set-aside
Small Disadvantaged Business — 5% set-aside
Service-Disabled Veteran-Owned Small Business — 3% set-aside
HUBZone — 3% set-aside
Again, the Federal Business Accelerator program provides in-depth advice on how to build your team and win opportunities.
We are going, to be frank with you! Building a business in the government sector is very lucrative, but it also requires significant effort on your end as a small business, including time and investment. If you’re thinking that you are going to read a few free blogs like this and maybe watch one or two YouTube videos, and suddenly become an expert in building a government practice you are going to be sadly mistaken. Please spend the necessary amount of time (and investment) to get onto the right path. As we mentioned earlier, we have the Federal Business Accelerator program, which is affordable, part-time, and digitally delivered. You can join this program to improve your chances of becoming a high-growth, small business company. But before you start doing all of this, make sure to take the free 90-minute workshop (link on the top of this page) and only if you think you are ready, should you invest in the accelerator.
Now let us talk about the icing on the cake!
First and foremost, you are now following your passion and growth curve. Now you are fully motivated and you’re your boss. You can keep your own time. You can work from any location. You can hire the employees you want to work with. Is this not great?
Besides creating financial independence, you are also creating an asset (your company). This asset can be passed on to your children and family or you can sell it at any appropriate time and take the ton of money you make and vacation in the Bahamas!
Finally, you truly have job security. Almost no one can throw you out of your own company unless, of course, you have outside investors who own more of the company than you do. Don’t make this mistake.
Plus, you will become an expert in a broad range of skills and enjoy the ups and downs of your small business. And yes, you can call yourself a CEO.
So, get started small, and gradually grow your business in the entire government sector in the US. We are waiting to welcome you aboard!
Nitin Pradhan is the former award-winning CIO of the US Department of Transportation and an Obama-Biden Appointee. He founded and led the ScaleUP USA Federal Business Accelerator program and the ScaleUP USA newsletter and works with businesses to build their US federal government practices. Business and government leaders can connect with him on LinkedIn.