Women and minority business owners differ from the mainstream when it comes to equal share in federal contracting opportunities, for many reasons, according to a recent survey conducted by American Express OPEN. The survey examined the successes and challenges among minority and women business owners in government contracting.
OPEN’s groundbreaking survey of more than 1,500 business owners listed in the Federal Procurement Data System and registered on the Central Contractor Registration found that nearly two thirds of minorities whose firms do business with the federal government generate more than $1 million in sales, even though it took them nearly two years, on average, to land their first contract.
Findings specific to Asian business owners from the survey:
• Asian-American federal contractors, like other firms owned by business owners of color, are more active than average in the bidding process.
They are submitting – on average – 1.5 times as many bids for prime Federal contracts (33 compared to 20 over the past three years), and spent nearly twice as much in staff and monetary resources ($162,000 compared to $86,000) last year seeking federal contracting opportunities.
• It did not take active Asian contractors any longer than average to win their first federal contract – 1.6 years compared to the average of 1.7 years among all active small business contractors.
• That greater bidding activity appears to be paying off. Asian active contractors have received a significantly higher amount of federal contract dollars than average, and own larger businesses than the average active small business contractor.
Over the entire time they’ve been active in seeking federal contracts, 44 percent of Asian small business contractors have won more than $10 million in contracts, compared to 21 percent of all small business contractors. Last year, 39 percent of the firms owned by Asian contractors employed 50 or more people and 81 percent generated $1 million or more in revenues – compared to 24 and 65 percent, respectively, of all active small business contractors.
• What’s their advice to other businesses seeking federal contracts?
To be persistent (34 percent) and to spend time developing relationships with procurement officials (26 percent). In this, they are different from the average small business contractor, who advice prospective contractors to start small (26 percent) and to be persistent (23 percent). Only 13 percent of all small business contractors say that developing relationships is their top piece of advice – half the share of Asian active contractors.
This is the second of three summaries to be published from the Victory in Procurement – Small Business survey. The first report summarized the strategies for success employed by active small businesses in federal contracting, the level of effort required to achieve success, and the difficulties faced by those still seeking their first prime contract.
American Express OPEN is a payment card issuer for small businesses in the United States with products and services for small businesses to include business charge and credit cards and online tools designed to improve profitability.