Federal Contracting for Small Businesses

“What is a small business?”

Depending on who you ask, the answer will vary.

However, if you’re looking for the answer that can actually help you make a lot of money and grow your business, then you’re going to want Uncle Sam’s opinion.


By law, the federal government has to spend around 23% of its annual contracting budget (around $500 billion) on small businesses.

So that’s around $115 billion up for grabs every year.

Want in on this?

Thought so.

If you want to:

  • Find out if you qualify as a small business (in the eyes of the government).
  • Access a proven path to increase your revenue and grow your business.
  • Learn about even more exclusive opportunities with the federal government.

Then keep reading this blog.

Let’s get started.

What is a small business?

When it comes to the federal government, if you are or are not a small business depends on your industry. Your industry is marked down by your North American Industrial Classification System code or just NAICS code.

What is a NAICS code?

It’s basically a 6 digit code assigned to a specific industry. That’s it.

NAICS codes apply to everything from OEMs to magicians.

And by the way, the NAICS code for a magician is 711510 – Independent Artists, Writers, and Performers.

So first, you want to find out your primary NAICS code (aka, your main offering) which can be found in this comprehensive manual.

Now, once you’ve established your NAICS code, you can figure out if you’re a small business which can come down to two factors (aka find these out and jot them down):

  • Average annual receipts.
  • Employee headcount.

Find out if you count as a small buisness with a tool from the Small Buisness Administration. Simply open up this page in your browser and enter your NAICS code along either of the two pieces of information mentioned above.

Now let’s talk about how this will significantly boost your business’s revenue.

Uncle Sam: Your Next Favorite Customer

You’ve found the answer to “What is a small business?” and it turns out that you fit the U.S. government’s definition.

Great! So what does that mean?

Well, working with the federal government has a lot of perks:

  • You have a reliable and accountable customer.
  • Federal contracts are recession proof.
  • The U.S. government is always looking to spend money.
  • Agencies strive to build working relationships with contractors.

Since the Small Business Act of 1953, the federal government has made an initiative to contract with small businesses whenever possible and to offer “maximum practicable opportunities.”

Today, as mentioned before, Uncle Sam strives to spend around 23% of his total contracting budget (he sets it aside) on small businesses.

Being a small business puts you in the front of the line for bidding to the largest buyer of goods and services in the world.

This works through:

  • Solicitations that only small businesses can bid on.
  • Quotas/incentives given to agencies for awarding small businesses.

…And it gets even better.

If you’re new to the sector or are curious about getting in, you need to get familiar with the term “set-aside” which means two things:

  1. A specific designation is given to a small business working with the federal government.
  2. An opportunity that is exclusive to small businesses or a specific type of small business.

Now, you may be scratching your head, but there are even more opportunities and incentives for certain types of small businesses.

These designations include:

  • Women-owned small businesses – WOSB
  • Service-disabled veteran-owned small businesses – SDVOSB
  • Minority-owned small businesses – 8(a) Program
  • Small businesses in designated census tracts – HUBZone

And think about this…

Set-asides are so valuable, that there are tons and tons of cases people trying to defraud the government through faking or being misleading about their qualifications.

Just let that sink in.

If you think you may qualify for these set-asides, then it’s worth the time and effort to look into it.

Or better yet, there are third-party firms such as US Federal Contractor Registration which can help you find out if you qualify and even take care of the paperwork for you.

Got Questions? Send Them Over!

So that just about covers:

  • What is a small business?
  • The benefits of being a small business in federal contracting.
  • The advantages of set-asides.

Did you like this blog post? Did you not like this blog post? Let me know in the comments below. Also, if you have questions pertaining to small business opportunities, set-aside qualifications, or just federal contracting in general, send them to me!

My name is Hayden Johnson, I’m a copywriter at US Federal Contractor Registration. Just shoot a question over to hjohnson@usfcrgov.com and I will get back to you as soon as possible.

Good luck and happy contracting!

Filed under: Uncategorized

No comment yet, add your voice below!

Add a Comment

Your email address will not be published. Required fields are marked *

Comment *
Name *
Email *