As your IT consulting business expands, the allure of government, city, and state contracts, including those from school districts, might grow. However, venturing into this arena represents a significant shift in business model. Unlike serving medium-sized businesses, which requires a deep understanding and specialization in specific technical skills, government contracts demand a different approach.
Medium-sized businesses seek consultants with specialized expertise, not simply an outsourced IT manager. Before pursuing government contracts, meticulously assess your team’s strengths and determine if you possess the depth of knowledge required in niche areas.
Securing government contracts involves navigating a complex landscape of bids, surety bonds, extended sales cycles, and intricate political considerations. This contrasts sharply with the direct approach often employed with small businesses. Therefore, prioritize saturating your local small business market before diverting resources to government opportunities.
Only explore government contracts after you’ve exhausted your local small business potential within a 50-mile radius. Ensure your pipeline is full, and you’ve maximized revenue from existing clients. Supplementing your business with select high-end micro-businesses and medium-sized enterprises is advisable before engaging with government work. The bid process, political hurdles, and extended payment cycles can be particularly challenging for startups.