When the economy faces uncertain times, government contracts
can prove to be a lucrative and steady income for your collections
business. Beyond the increased business
and stable pipeline of income, one of the biggest pros to securing a government
contract is that you can be assured of prompt payment—often in as little as 15
days.
Some of the cases for which both local and state
governmental agencies hire outside collections firms include motor vehicle
violations, parking violations, and court-mandated alimony. On a federal level, student loans are
becoming a hot commodity for collections as many people are defaulting on them,
and can prove to be extremely lucrative for any collection agency that manages
to secure the contract.
The best way to apply for a government contract if you are a
collection agency is to look on the Federal Business Opportunities
website. In order to do this, you will
need your firm’s North American Industry Classification System (NAICS)code—this can be acquired from your accountant or you can find it through a
search of the U.S. Census Bureau’s website.
The process to apply for a government contract isn’t an easy
one, however, and many small businesses fail to secure one simply because they
don’t spend the time and effort required to make sure they are familiar with
the process and have the funds needed to start.
Experts estimate that obtaining a government contract for your collection
agency will cost approximately $3,500 and take approximately eight months to
achieve. And this is only if you follow
the rules carefully and pay due diligence to deadlines and certification
requirements in order to get priority bidding status for your collections
firm.
Many Chambers of Commerce and Small Business Association
chapters offer workshops and informational sessions to help small businesses
cover their bases in obtaining a government contract. Use these resources that are available to you,
or you can hire a private consultant who will guide you through the process.
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