Winning the contract is only half the game. The other half is the money — starting with fast-paying small jobs, keeping cash in the bank, buying smart, and using credit so you can deliver before you ever pay a dime.
In partnership with the Rock Solid Development & Training Foundation — a 501(c)(3) nonprofit · EIN 86-3679037
Plenty of small businesses land a government order and then panic — because winning means they now have to buy a pile of goods, deliver them, and wait to get paid. If you front all that cash and the payment runs late, you can win your way right into a hole. So the pros think about the money before they ever bid: where do you start so you get paid fast, how do you keep cash flowing while you wait, where do you buy to protect your margin, and how do you stock an order without emptying your account? Get those four right and government work becomes what it should be — steady, profitable, and survivable.
Four moves: start where the money's fast, keep a cushion, buy at the source, and use net-30 credit.
The best on-ramp for a supplier is the smallest kind of buy: the micro-purchase. These are quick, low-dollar orders the government can make with almost no red tape — and they usually pay you in the fastest way there is.
Buys at or under this amount skip the long bid process — the agency can come straight to you.
Heads up: this went up fromHere's the part that matters for your bank account: for micro-purchases, the Government Purchase Card (the GSA SmartPay card) is the preferred way agencies pay. That's the government credit card the buyer keeps on file. They swipe it, and the card's bank pays you — often in days, with no drawn-out invoice to chase.
The buyer charges the purchase card on file. The card bank pays you quickly, like any card sale. No invoice marathon.
Bigger awards run through invoicing and the agency's payment cycle — generally about 30 days after a proper invoice.
The government can't split a big buy into several small ones just to stay under the threshold — and neither can you suggest it. Also, most states exempt government purchases from sales tax, so don't add it; just note the sale is for official government use.
By law, the government is supposed to pay you on time — the Prompt Payment Act generally means payment within about 30 days of a proper invoice, plus interest if they're late. That's the rule. Reality bites differently.
Budgets stall. Shutdowns happen. A card freeze or a paperwork snag can hold up your check for weeks. Veterans of this game will all tell you the same thing: never let one government payment be the only thing keeping your doors open. Keep a cash reserve, keep other customers, keep a second line of revenue. The contractors who get wiped out aren't usually the ones who lose a bid — they're the ones who bet everything on a single check that came late.
Aim to keep enough cash or backup revenue to cover your costs for a few months without a government payment landing. That cushion is what lets you say "yes" to the next order with confidence instead of fear — and it's what keeps you in business through a shutdown.
When you're supplying goods, your profit is the gap between what you pay for them and what the government pays you. Every middleman in between shrinks that gap. So go as close to the source as you can.
Buy direct from the manufacturer (or an authorized distributor) instead of a retailer or reseller. You get the best price, which means the best margin — and the room to bid competitively while still making money. Then do the most important part: build the relationship. A supplier who knows you, trusts you, and wants your repeat business will give you better pricing, faster turnaround, and — as you'll see next — payment terms that change your whole cash-flow picture.
The first order from a new supplier is just a transaction. By the fifth, you're a known customer — and that's when you can ask for volume pricing, priority on stock, and credit terms. Treat your suppliers like partners, because in this model, they are.
Here's the move that makes the whole supply model work. New suppliers want their money up front — but once you've built a relationship, you can fill out a credit application and earn net-30 terms: 30 days to pay them back.
Why does that change everything? Because now the timing works in your favor. You get the government order, buy the goods on net-30 (no cash out of pocket yet), deliver them, get paid — and then pay your supplier, with time to spare. You fulfilled an order you never had to fund yourself. Toggle it and see:
That's the engine of a healthy supply business: your customer's payment funds your supplier's payment. You're the bridge in the middle, not the bank.
Terms are trust. Pay every supplier invoice on time — early if you can — and your credit line and your reputation both grow. Miss payments and you lose the terms, the relationship, and your cash-flow bridge all at once. Treat net-30 like the lifeline it is.
You can now find contracts, get certified, build a brand, read and win a bid, and price and fund the work without sinking your cash flow. That's the full loop of getting started in government contracting — and you built it for free.