We started testing it ourselves. We registered an LLC, which took about a week. Then we registered on SAM.gov. We found some contracts that looked manageable and started bidding.
We did not win the first one. Or the second. Or the third. We bid on five contracts before we won anything. Each one taught us something we didn't know before.
Our first win was an IT support contract. Matt had contacts from his previous business who he knew could do the work. He approached them, got a quote, priced the bid above it, submitted the proposal, and won.
The contract was for around $70,000. The subcontractor did the work for $50,000. We kept the $20,000 difference. We did not lift a finger to do the actual work.
Here is what surprised us most: the government pays on time, every time. And 80% of government contracts renew for four or more years. So once you win a contract, you can bid on it again the following year. And the year after that.
Three and a half years later, we now have 24 contracts.
It is, without a doubt, the most boring business in America. There is nothing glamorous about government procurement. It is paperwork, regulations, and reading PDF documents.
But it is also one of the most reliable, predictable, and recession-proof business models we have ever come across. The government always needs things. It doesn't matter what the economy is doing. The contracts keep coming.