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Rescooped by FrederickFlores from Innovative Marketing and Crowdfunding
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SBA: Progress being made on helping unpaid VA hospital subcontractors - Denver Business Journal

SBA: Progress being made on helping unpaid VA hospital subcontractors - Denver Business Journal | FrederickFlores | Scoop.it
Greg Lopez, director of the U.S. Small Business Administration in Colorado, said...

Via Marty Koenig
more...
Marty Koenig's curator insight, April 7, 2013 12:48 PM

Government contracts can be lucrative for small businesses. On the other hand, they can be cash flow swamps. Unless the small business has unlimited cash reserves and lines of credits that extend out 2-3 years of business needs, I don't know how it's feasible to start a business or start a line of business doing government contracts today. 


I'm sure there are ways, but the fundamentals don't change. I had a client that did work for public school districts, and their standard pay schedule was 180 days AFTER the work was completed! Put that into your financial model, and see how much revenue over what time frame you need to support that business model. It simply doesn't work or scale. 


Chime in if you believe it's a smart move for any small biz to get into government contracts like this. Let us know if there are government contract work types beyond construction that this hasn't happened. 


Marty Koenig

CxO To Go

CrowdFundEnergy

Rescooped by FrederickFlores from Innovative Marketing and Crowdfunding
Scoop.it!

SBA: Progress being made on helping unpaid VA hospital subcontractors - Denver Business Journal

SBA: Progress being made on helping unpaid VA hospital subcontractors - Denver Business Journal | FrederickFlores | Scoop.it
Greg Lopez, director of the U.S. Small Business Administration in Colorado, said...

Via Marty Koenig
more...
Marty Koenig's curator insight, April 7, 2013 12:48 PM

Government contracts can be lucrative for small businesses. On the other hand, they can be cash flow swamps. Unless the small business has unlimited cash reserves and lines of credits that extend out 2-3 years of business needs, I don't know how it's feasible to start a business or start a line of business doing government contracts today. 


I'm sure there are ways, but the fundamentals don't change. I had a client that did work for public school districts, and their standard pay schedule was 180 days AFTER the work was completed! Put that into your financial model, and see how much revenue over what time frame you need to support that business model. It simply doesn't work or scale. 


Chime in if you believe it's a smart move for any small biz to get into government contracts like this. Let us know if there are government contract work types beyond construction that this hasn't happened. 


Marty Koenig

CxO To Go

CrowdFundEnergy