When small businesses enter the world of government contracting, there’s an initial temptation to cast a wide net, offering as many products and services as possible in hopes of landing more contracts. It might seem logical: The broader your offerings, the more likely you’ll find a match, right? Unfortunately, this strategy often leads to more frustration than success. Carrying too many lines, services, or offerings in the government marketplace can dilute your efforts, making you appear scattered and unfocused to federal clients.

The secret to winning more contracts isn’t doing everything for everyone. Instead, it’s about focusing on your superpower—the specific products or services you excel at delivering. By narrowing your focus, you’ll create a stronger, more targeted government contracting strategy that resonates with federal buyers.

In this article, we’ll explore why less is often more in the world of federal contracting and how focusing on your core strengths can help you win more contracts.

The Pitfalls of Offering Too Much

Imagine walking into a business meeting with a company that claims expertise in IT services, construction, medical supplies, roofing, HR, and laboratory equipment. Your immediate reaction would likely be skepticism. How can one company excel in such vastly different fields? The same doubt arises in the minds of government buyers when they encounter small businesses that try to cover too many industries at once.

One common pitfall in the federal contracting world is trying to cater to too many niches. We often see businesses with 20 or 30 NAICS (North American Industry Classification System) and PSC (Product Service Code) listings in their SAM (System for Award Management) profile. These companies list everything from energy services to furniture manufacturing, hoping to increase their chances of being selected for a contract. However, this approach often backfires.

Why? Because it lacks focus. When federal buyers search for potential contractors, they want to find companies with deep expertise in the specific area they need. A company trying to do everything ends up looking like it specializes in nothing. The key to success in government contracting is narrowing your focus and honing in on what you do best.

Understanding NAICS and PSC Codes

Before we dive deeper into why specialization is critical, let’s take a moment to discuss NAICS and PSC codes. These codes are the building blocks of how the federal government categorizes and identifies businesses and the products or services they offer.

NAICS Codes: These codes classify businesses based on the types of goods or services they provide. For example, a company that provides custom software development might list under NAICS code 541511 (Custom Computer Programming Services).
PSC Codes: These are used to describe the products, services, and research and development activities purchased by the federal government.

When you create your SAM profile, it’s tempting to list as many NAICS and PSC codes as possible. However, it’s essential to focus on the codes that reflect your true strengths. Choosing too many codes can confuse federal buyers and make your business appear unfocused.

Our company, FedBiz Access, assists businesses in selecting the specific NAICS and PSC codes that best represent their core offerings, increasing their visibility and attractiveness to contracting officers. By aligning your business with the right codes, you’ll stand out as a specialist in your field rather than a jack-of-all-trades.

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Why Specialization Matters in Government Contracting

Specializing in a limited number of services or products offers several advantages in the world of government contracting. Let’s take a look at why focusing on your superpower—your core area of expertise—is a more effective strategy:

1. Building Credibility with Federal Buyers

Federal buyers want confidence that the contractors they select have the skills and experience necessary to deliver on their promises. If you’re a small business claiming expertise in multiple unrelated industries, buyers are likely to question whether you can truly deliver on everything. Specializing in one or two areas allows you to build a reputation as an expert in those fields, which is much more attractive to federal buyers.

For example, if you specialize in furniture manufacturing, your SAM profile might list five to ten key products like desks, chairs, workstations, and reception tables. This demonstrates that your business is laser-focused on delivering high-quality furniture solutions, making it easier for federal buyers to trust your expertise.

2. Focusing Your Marketing and Outreach Efforts

Marketing in the federal marketplace is all about targeting the right agencies and buyers. If you try to market yourself as an expert in multiple areas, your outreach efforts will be scattered, making it difficult to build meaningful relationships with key decision-makers. On the other hand, by focusing on a single niche, you can concentrate your marketing efforts on the specific agencies that are most likely to need your services.

At FedBiz Access, our Federal Connections Package and MatchMaker services are designed to connect our clients with the right government buyers. These services help businesses focus on building relationships with contracting officers and decision-makers within targeted agencies. By narrowing your outreach to the buyers that matter most, you’ll build stronger relationships and increase your chances of winning contracts.

For example, if you specialize in healthcare services, particularly in providing qualified medical staff such as nurses, lab technicians, and radiologists, our services can help you target agencies like the Department of Veterans Affairs or the Department of Health and Human Services—agencies that are always in need of healthcare personnel. Your marketing message becomes more targeted, and you’ll be able to build deeper relationships with the people who matter most.

3. Winning More Contracts with a Niche Approach

Specialization doesn’t just make you more attractive to federal buyers—it also increases your chances of winning contracts. When you focus on a limited number of products or services, you can allocate more resources toward understanding the specific needs of your target agencies. This means you’ll be better positioned to submit strong, competitive bids.

For example, if you specialize in providing IT services to the Department of Defense, you’ll have a deeper understanding of the DOD’s specific requirements and contracting processes. This allows you to tailor your bids more effectively, increasing your chances of success.

4. Managing Resources More Effectively

For small businesses, resources are often limited. Trying to juggle multiple industries and service lines can stretch your financial and physical resources too thin, leading to inefficiencies and poor performance. By focusing on a smaller number of offerings, you can manage your resources more effectively and deliver higher-quality products or services.

Think of it this way: If you’re trying to offer IT services, staffing, construction, and medical supplies all at once, you’ll need to invest in staff, equipment, and expertise in each of those areas. This can quickly become overwhelming and expensive. However, if you narrow your focus to just one or two core services, you can invest in the resources necessary to excel in those areas, leading to better outcomes and more satisfied clients.

How Many NAICS and PSC Codes Are Too Many?

A good rule of thumb in the world of government contracting is to limit yourself to no more than five to ten NAICS and PSC codes. This ensures that you’re presenting a clear, focused profile to federal buyers.

When we sit down with a business to help them develop their federal sales action plan, we often encounter companies that have listed 20 or more NAICS codes. They’re offering IT, HR, construction, energy, staffing, medical supplies—you name it, they’ve listed it. Our first piece of advice? Pick a lane. Decide what your business does best, and stick to it.

For example, if you’re in the healthcare field, your lane might be healthcare services, and your five to ten points might be nurses, lab technicians, radiology, therapists, and administrative staff. By focusing on these key offerings, you’ll be able to present a clearer, more compelling case to federal buyers. You’ll also be able to target specific agencies that are in need of these services, making your marketing efforts more efficient and effective.

FedBiz Access: Helping You Focus on What Matters

At FedBiz Access, we understand the importance of specialization in the government marketplace. That’s why we’ve spent the last 23 years helping businesses of all sizes narrow their focus and refine their offerings to increase their chances of winning contracts. Our comprehensive suite of services includes:

SAM Registration and Optimization: Ensuring your SAM profile accurately reflects your core competencies and is optimized for visibility.
NAICS and PSC Code Selection: Helping you choose the right codes for your business, so you can present a focused, professional image to federal buyers.
Capability Statement Development: Creating a compelling capability statement that highlights your strengths and sets you apart from the competition.
Marketing Services: Including Federal Connections Package and MatchMaker services, which connect you with the right buyers through targeted outreach, personalized email campaigns, and market research to ensure your marketing efforts are aligned with your niche.

Over the years, we’ve helped our clients secure more than $35.7 billion in federal contracts, and we’re ready to help you too.

Ready to Win More Contracts? Focus on Your Superpower

If you’re ready to stop spreading yourself too thin and start winning more contracts, it’s time to focus on what you do best. Narrow your offerings, target the right agencies, and build a reputation as an expert in your field. By doing so, you’ll not only increase your chances of success but also make your business more efficient and profitable.

Need help navigating the complex world of government contracting? Schedule a complimentary consultation with a FedBiz Specialist today. Our experts will help you refine your federal contracting strategy, select the right NAICS and PSC codes, and develop a targeted plan for winning more contracts.

Remember: In government contracting, less is often more. Focus on your superpower, and let us help you win more business.