Becoming a government contractor involves a steep learning curve - especially as an entrepreneur. Along with managing your business, you must adhere to strict government regulations, tons of paperwork, procurement, and so on. 

That said, the Small Business Administration has developed several support programs to help small business owners become successful contractors, including seminars, mentoring and counseling, and financing assistance.

Several benefits await you in a sector worth $100 billion in sales to small businesses yearly - if you manage to work through the obstacles and meet the requirements to become a government contractor.

Benefits of Becoming a Government Contractor for Entrepreneurs 

Constant Revenue to Your Business

One of the main reasons many entrepreneurs go out of business is a lack of consistent cash flow. Government contracts can provide a steady income to a company and help it weather the tough times caused by slow economic conditions or a single project taking longer than expected. 

Cash flow stability allows businesses to create marketing budgets, hire staff, and grow their business efficiently.

Prompt Payment

Generally, payments are made within 30 days or even sooner in the case of construction. The government will also pay you interest on the amount they owe you if you do not receive payment within the contract terms.   

When you need access to funds sooner, government contract factoring companies will help you immediately obtain the cash you need from your outstanding invoices. 

You will receive 85 - 90 percent of your invoice's value minus a small factoring fee which ranges from 1-2 percent. 


If there's one thing every business owner craves, it's stability. A steady flow of revenue from multiple sources provides businesses with the serenity and security they need to meet payroll, pay consulting fees, and fund future operations. 

Government contracts can give this security because they are long-term and project-specific, and businesses can meet their employees' needs with less risk than a traditional job. 

Flexibility for the Entrepreneur

When you are a Utah contractor, you have the flexibility to pursue other business opportunities or pursue personal endeavors without compromising your current obligations. 

If you're in the market for a new business venture, you can maintain your current obligations while pursuing your next dream.  

You can also pursue any personal endeavors without worrying about the negative financial implications that a permanent job might produce. 

The Pay is Good

As an entrepreneur, one of the motivations for going into business is to earn as much as possible. As a government contractor, you can make money at a rate substantially higher than you could in a job. 

In the United States, the average salary for a Federal Contractor is $98,706 a year as of May 28, 2022.

Moreover, your potential earnings increase as your contracting business grows and your company network expands.  

Final Thoughts

Becoming a government contractor is not typically easy, but it has several benefits for the entrepreneur. Along with the benefits listed above, you'll have access to new markets and networks. 

A small business that successfully becomes certified as a government contractor will have years of steady work and a stable source of revenue and cash flow for years to follow. 

About the Author(s)

Adam Torkildson

Adam is a long-time resident of American Fork, UT. He serves in several local service organizations and advises several startups that he's invested in or founded.

Owner, Tork Media