How do I specifically start a business as a government defense supplier?


2

No matter what shape the economy is in, the government will always have at least a few if not many contracts with defense contractors.

I would like to start a business as a supplier to these aerospace and government projects.

For a basic example, something like being the main supplier of all the nuts and bolts for the top fighter jet program or creating the mounts for unmanned vehicles cameras.

The idea is, it doesn't matter which company has the contract as long as I can supply.

How reasonable is it to start this business or do I have to be born into it?

How long would research in this business take?

Can I expect to make decent money?

How much money do I need at first?

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asked Sep 22 '12 at 04:17
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Greg Mc Nulty
75 points
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  • I would suggest working in the defense industry first to get the background you need as far as bidding and procurement, etc. It's not an easy market to break into based on my experience. Due to the logistics and requirements the company size is typically larger than what you seem to be envisioning. You might be better off trying to be a "sub" for the primary suppliers. The best way to do that is by becoming proficient/expert/known in the market for the thing(s) you are selling. – Tim J 7 years ago
  • @TimJ: yes, a sub to the primary would be perfect, that way I can move to which ever primary is funded. Is it possible to become an expert in the market while starting the business or is that usually a bad idea? – Greg Mc Nulty 7 years ago
  • If you do not already have high level of domain experience or knowledge then I think you should come up with a better plan. Focusing on "government defense" just because there are large budgets is not the right game plan - especially for someone with neither domain expertise or defense contract knowledge or "friends" in congress and the military. – Tim J 7 years ago
  • @TimJ: My buddy is an engineer for a defense contractor so we have the **general domain knowledge**. But no specific _contract_ knowledge or friends in high places. – Greg Mc Nulty 7 years ago
  • @TimJ: I have an MBA with some experience in finance. I think we would be able to get to speed on the technology and contract issues but not sure about displacing established companies. – Greg Mc Nulty 7 years ago

3 Answers


3

Your question is unanswerable. First of all we do not know what technologies you are contemplating or what expertise you have

Here are your questions:

How reasonable is it to start this business or do I have to be born
into it?

It is reasonable if you have some value to bring to the marketplace. If you do not have something that the other businesses in the space have then it is quite unreasonable. So, to try to enter the domain just because there is a large pot of gold to be spent by the government makes it unreasonable.

How long would research in this business take?

This is not a question we can answer. It is dependent on what business/technologies you are talking about and your expertise. It could take from 1 day to many years. This is impossible for us to answer.

Can I expect to make decent money?

If you have something of value to sell competitively, then yes. Otherwise, no.

How much money do I need at first?

Again, this is not something we can answer. It depends on what you are trying to accomplish.

As I pointed out in the comments - you are going about this the wrong way. At the very least you should find a need that is not filled. Instead, you identified some entity that has money to spend and you are trying to position yourself to get it with no experience or knowledge about the process or technologies.

You are better off finding some other niche to fill.

My answer would be different if you were a technologist that had a better or cheaper way to provide surveillance, or to dismantle bombs. But your premise/question is:

"The government has money to spend. I want to start a business to get it. What do I have to do to get it?"

answered Sep 28 '12 at 04:16
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Tim J
8,346 points

2

You wrote as an example, you want to supply the governments jet fighter program. Let's stick with it. It is not the government which does manufacture the jet fighter. Usually that is done by other companies like for example Airbus or Boeing. Both companies have tried to get a huge contract with the Pentagon.

The Pentagon would not buy nuts and bolts from you. But probably Airbus or Boeing would do. Of course they have their suppliers already and it will be hard battle to be accepted from them. It is most often not only the price of the nuts which counts, it is also the reliability or other factors.

The government probably does some engineering stuff on its own - who knows? The problem is we will not know about it and if it is secret, they will not order nuts and bolts as the "US Government" with delivery goal Pentagon. They probably have third names to do that stuff.

So I guess you need to have a good reputation to be considered by engineering companies like Boeing.

Not sure why you want to supply Defense in first, but if I would like to do that, I would read the governments public "call for bids". At least in germany there is a rule that contracts need to go to a "call for bids" first. If you manage to get into on of them - defense or not - you have at least a foot in the door.

Another option is to read the news and try to offer supplying to contracting companies. For example, if you hear Airbus is having a new contract with the Pentagon, try to make an Nuts-And-Bolts offer to Airbus. It will not be easy. But maybe you can make a personal contact in some point of time to get such a contract.

Research:

Do research who currently engineers for the Nasa, Government etc. Try to get in contact with them. Do research on upcoming contracts.

Money:

I think if you can supply, you'll paid well. Anyway, nobody will accept you as a supplier if you have nothing in hand than your idea and a startup which is not operational. My bet is you need to focus on a specific product to supply, get your startup running, and then you might make it into the desired areas.

answered Sep 28 '12 at 06:04
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Christian
3,590 points

1

Clearly you're aware that there are major differences between defense and other target markets. One of the most important is that potential suppliers typically need to satisfy a number of criteria in order to be approved even to bid for work. And those criteria typically require prior participation in the industry.

Is this a "Catch 22?" No. Do you need to think creatively to get where you want to be? You bet.

Businesses I have known who have established themselves in defense have typically started out one of two ways.

One route is targeting subcontracting work - for instance, supplying components to a product supplier rather than whole products to the end customer. Although there may be criteria applied right through the supply chain, they will generally be less stringent the further you are from the front line. Of course, this also may mean working in more commoditized or lower-value areas, but you're building credentials and learning your way round the industry.

The second route I've seen is finding an accredited partner who will act as your route to market. You need to do your homework. You need to find someone who will value the new opportunity your capabilities bring (which probably means you have offerings that are complementary to theirs as well as being somewhat outside their present competence) and be able to sell it (which means helping them acquire new skills). This definitely requires patience and diligence.

At the end of the day, in this or any industry you have to be solving real problems in valuable ways. But unlike typical business contexts, you're unlikely to find shortcuts to getting customer #1. And, of course, yours won't be the only company that's noticed the counter-cyclical nature of the market.

answered Oct 4 '12 at 05:08
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Jeremy Parsons
5,197 points

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