How to Capitalize on Federal Funding for Small Business: The Commercial-Federal Transition Explained

In the midst of a post-pandemic economy, small businesses are seeking all outlets of revenue that is available to them in order to ensure their success. Rising interest rates, real estate, and supply chain costs certainly add a stressful layer to owning a business, but there are several ways to grow your company and combat these increasing costs.

One of the best opportunities to develop a new source of revenue or expand an existing project or program is to consider transitioning your business from purely commercial to also include capitalizing on non-dilutive federal funding as a way to grow your business. There is some common ground between commercial and federal contracting, but also a broad array of differences that can be confusing even for seasoned entrepreneurs.

The government has a dedicated budget alleged specifically for partnerships with American small businesses. Through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, small businesses have the opportunity to explore their technological potential and provide the incentive to profit from its commercialization.

Transitioning your small business from commercial to federal contracting can be pretty daunting. From policies to procedures and contracts, your business might need to make a number of changes and needs to have a solid understanding of the government procurement process in order to succeed in this space.

Understanding the Acquisition Process

The government procurement process can be confusing and intimidating, but it doesn’t have to be. With the right information, you can ensure that your company is ready for government contracts. There are several resources you can turn to for help:

Make sure your company is eligible – In order to participate in the SBIR/STTR program, your business must be organized for profit with a place of business located in the United States; more than 50% owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States, or by other small business concerns that are each more than 50% owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States; and have no more than 500 employees, including affiliates.

Ensure and maintain compliance – The most important difference between commercial and federal business is compliance. Even if you have a solid proposal, if your proposal or business does not comply with federal requirements your company will be immediately disqualified for review. The basic requirements for a small business seeking to start government contracting are get proper registrations and ID numbers, meet size standards, register with SAM, maintain compliance, and meet cybersecurity requirements. For more information, find a breakdown of everything you need to know about these requirements here.

Talk to a mentor/peer/industry insider – The good news is that there are people who have been through the SBIR/STTR program before and can help you understand the process. They can help you understand government contract vehicles, how to get your product into the pipeline, and discuss the challenges they faced during the process. We recommend looking for commercial customers who already sell to the government – their experience and lead can be helpful for you. They may also be able to provide advice on how to navigate some of the more difficult parts of the process. The Outpost is always available to brainstorm with you. If you are interested in learning more about the SBIR/STTR program and how your company can capitalize on federal non-dilutive funding to grow your business.

Read articles and books – there are many online articles and books written by experts in government contracting who can help guide you through the process. Many of these publications offer step-by-step instructions on how to write a proposal, how to navigate solicitation requirements, how much time each part of the process should take and more! The Outpost constantly updates our blog and newsletter where we post about upcoming solicitations, publish articles breaking down the SBIR/STTR program, and announce our educational events.

Watch The Outpost’s webinar series – The Outpost hosts monthly webinars that are focused on federal funding and acquisition education and supporting small businesses in their SBIR/STTR and commercialization journeys. All webinars are 30 minutes, free to the public, and have a designated Q+A session at the end so as to ensure entrepreneurs have the space, community, and support needed to succeed. These webinars also give you a chance to meet various experts in the federal funding community, from IP lawyers to the co-founders of AFWERX, the Air Force’s innovation program. Stream past webinars here.

Network, network, network – Similarly to the commercial sector, it is vital that you network – the more people you know, the better chance you have in obtaining a contract. Letters of support are a crucial element of emphasizing to the government that your proposal has federal support and a demonstrated use-case that solves a federal problem. We recommend attending government-sponsored events in order to speak directly to potential federal customers. This allows you to build direct relationships, sell your tech solution to government end-users, and establish a foundational network of support.

The Outpost Approach

As you can see, the SBIR/STTR program is one of the best ways to grow your business and develop a new revenue stream. The government is serious about small business partnerships and wants your help to develop technology that addresses important national problems. This program allows innovative U.S. companies to further develop their high-tech innovation while also providing the nation with solutions that meet its specific research and development needs.

The Outpost has helped clients win over $250M in non-dilutive funding and contract awards in just the past two years, as well as secured over 100 signed MOUs. Your company could be the next to win big in government contracting and beyond.

The Outpost can help you submit a proposal with help from knowledgeable contracting experts, including the pioneers of AFWERX and SpaceWERX.

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