How To Open a Federal Contracting Business

Opening a federal contracting construction company can be a lucrative endeavor, but it’s important to understand the process and what’s required to get started. 

This article will walk you through the steps necessary to open your federal contracting business and get on the path to success.


Eight Steps to Launching a New Federal Contracting Business

1. Name Your Federal Contracting Business

Give your federal contracting business an identity so people will think of it as a well-known and respected brand. You can take the name of your federal contracting business from your industry, focus on a geographical location, or use your own name among other options.

The main goal for naming your federal contracting business is to make it sound appealing and trustworthy so that potential customers will use your services.


2. Choose a Legal Form for Your Business

By incorporating your federal contracting business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.

The business structure you choose for your federal contracting business will determine the amount of taxes you pay and which state or federal tax forms you need to file.

Read our article comparing the most common federal contracting business structures.


3. Write a Federal Contracting Business Plan

All federal contracting business owners should develop a business plan. 

A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.

Read our article about how to write a federal contracting business plan.


4. Apply for the Necessary Permits and Licenses

There may be required licenses and permits you need to obtain before launching your federal contracting business.

For example, if you will be contracting with the government, you will need to register in the System for Award Management (SAM). You will also need to have a D-U-N-S number and an active registration in

You must also register your federal contracting business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.

Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.

Read our article about obtaining the proper federal contracting business licenses.


5. Determine Your Budget & Apply for Funding as Needed

In developing your federal contracting business plan, you will figure out how much funding you need to start and grow your business.

If you have your own funds to invest in your federal contracting business, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your federal contracting business include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.

Read our article about the costs associated with starting a federal contracting business to help you determine if funding is needed. 

Read our article about how to fund your federal contracting business


6. Get the Technology & Software Needed to Run Your Business Efficiently

When you start your federal contracting business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues. 

You may also want to invest in project management software to help you keep track of deadlines and project progress. And if you plan to do any online marketing, you’ll need a website and email hosting.

Read our article about the technology and software you need to run a federal contracting business.


7. Market Your Federal Contracting Business to Potential Clients

Before you start selling your services, you have to let the world know you exist. The first step is to create a website so people can learn more about your services and how they benefit them.

After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the federal contracting industry through social media and blogs so they can help share your business. 

Additional strategies to consider include:

Content marketing – This involves creating articles, blog posts, infographics, and other types of content that educates potential clients about your services.

Search engine optimization (SEO) – This is the process of optimizing your website and content to rank higher in Google search results.

Social media marketing – This is the process of promoting your business through social media channels.

Email marketing – This involves sending emails to potential and current clients to promote your business.

Referral marketing – This is the process of asking satisfied customers to refer your business to their friends and family.

Read our article about how to market your federal contracting business for more tips.


8. Get New Clients & Grow Your Business

When you promote your services, you’ll start to get interest from potential clients

Make sure you’re ready to serve these clients. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your federal contracting business.

Read our article about how to effectively grow your federal contracting business to learn more.


Starting a Federal Contracting Business FAQs

The answer to this question depends on your personal and professional goals. But some reasons people start federal contracting businesses include the desire to be their own boss, the challenge of running a business and the potential for high earnings. The federal contracting field has a market share of about $500 billion, so there’s definitely opportunity for those who are willing to put in the work.

You need a few things to start a successful federal contracting business. First, you need to have experience in the construction industry. You also need to be familiar with the Federal Acquisition Regulation (FAR) and the Federal Procurement Data System (FPDS). Finally, you need to have a strong marketing and sales strategy to promote your business to potential clients.

Here are a few tips for starting a federal contracting business:

  1. Familiarize yourself with the FAR and FPDS.
  2. Create a strong marketing and sales strategy.
  3. Find experienced employees to help you grow your business.
  4. Make sure you have the necessary licenses and permits.
  5. Promote your business through social media, email marketing and referral marketing.
  6. Get new clients and grow your business.

A simple checklist to use when starting a federal contracting business is as follows:

  1. Name Your Federal Contracting Business: This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
  2. Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
  3. Write a Federal Contracting Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
  4. Apply for the Necessary Permits and Licenses: In most locations you will be required to apply for a business license and/or permits before you can begin operations.
  5. Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
  6. Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
  7. Market Your Federal Contracting Business to Potential Clients: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the services they truly need. 
  8. Get Clients & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your services



Starting a federal contracting company requires several steps, but following the steps in this article will help make the process much easier. First, familiarize yourself with the industry and the laws that govern it. Next, create a business plan and register your company with the government. Then, get the necessary licenses and permits. Finally, market your business to potential clients.