Most people think the path to business ownership starts with an LLC filing and a dream. After 15 years in government contracting and dozens of acquisitions, I can tell you: buying beats building almost every time.

Here's why.

The startup trap

When you start a business from scratch in government contracting, you're facing:

• No past performance. Federal agencies want to see you've done the work before. No track record = no contracts.

• No contract vehicles. Getting on a GSA Schedule or winning a spot on a MAC IDIQ takes months — sometimes years.

• No revenue while you build. You're burning cash on proposals, certifications, and compliance while waiting for your first award.

The average government contracting startup takes 18-24 months before seeing meaningful revenue. Most don't survive that long.

The acquisition advantage

When you acquire an existing government contracting business, you get:

• Immediate past performance — the company's track record transfers with ownership

• Active contracts — revenue from day one

• Existing relationships — contracting officers who already know and trust the company

• Established systems — cleared employees, compliance frameworks, accounting in place

• Set-aside eligibility — potentially including 8(a), HUBZone, SDVOSB, or WOSB status

You're not starting at zero. You're starting at sixty.

What to look for in an acquisition target

Not every business is worth buying. Here's what I evaluate:

1. Contract backlog. What's the total value of active contracts? What's the pipeline look like?

2. Customer concentration. If 80% of revenue comes from one agency, that's a risk.

3. Key person dependency. Will the business collapse if the founder walks away?

4. Recompete timeline. When do current contracts come up for renewal?

5. Margin profile. Revenue is vanity. What are the actual margins after labor, overhead, and G&A?

The numbers most people miss

A $2M/year government contracting business with 15% net margins and a 3-year contract backlog is worth roughly 3-4x SDE (Seller's Discretionary Earnings). That's a $900K-$1.2M acquisition.

With SBA 7(a) financing, you might put down 10-15%. That's $90K-$180K to control a business doing $2M in revenue with $300K in annual profit.

Compare that to spending 2 years and $200K trying to win your first contract from scratch.

The math speaks for itself.

Get started

If you're serious about acquiring a business in government contracting, construction, or professional services, I break down the entire process inside the GC Advising Community — including live calls every two weeks where we review real deals and real numbers.

Stop building from zero. Start acquiring from strength.