Would it be best to form a parent company and have the oilfield service company and contracting company under one umbrella? Also, I do have a 50% disability rating and I know the government has set aside contracts. I am thinking it would be best to name the business as a Group, Enterprise, or Venture so it wouldn't be to narrow and could encompass a number of contracting opportunities.
Answers
Craig,
I can give you some advice from my own person experience.
I know the Oil business is slowing right now but branching out into Government contracts may be difficult if you are not prepared properly. FedBizOps is certainly a great place to start and there are many set-asides for companies like yours.
On the other hand, there are a lot of things you should consider. One of which is you'll be competing against a TON of other contractors whom may not always use the pricing guidelines. In Tennessee there was a forestry job clearing recently downed trees in a state park. The estimated price set by the Forestry Service was $230,000. Our company was slow at the time so I sent one of our Managers to the Bid-Walk. There were 20 other contractors at the bid-walk and the job eventually sold for $70,000, well below our aggressively priced bid.
Another problem is the long time between bid, acceptance, completion and final payment. I would assume you're used to pretty quick terms in the Oil Industry, not the case in Government.
I could go on and on but the message I give to most younger entrepreneurs is this, stick with your core business. It's never good to suck profits from a good business to start something totally new, it'll rarely work out. Well, unless you have a whole lot of cash laying around.
Now, if your new venture is pretty close skill-set wise to what you're currently doing in the oil fields then you may be okay. Making a move into something totally different requires new equipment costs and in most cases new people, it'll be like setting up a totally new business.
Just be careful...
MjM
Thanks for your response Mark. Yes, it looks like there is some red tape involved. I found a lot of useful information through SBA and hopefully I can get in to see a field rep that specifies in contracting. I think my biggest question would be how to name the business so it doesn't limit opportunities? Also, for tax purposes how to structure it. The oilfield service company is an S Corp.
Check out FedBizOps... The " govt" does have " set asides"... You may consider having it as a woman owned buisness as well... Be advised that their is an auditing process that will eventually occur, to ensure that your Company is in fact " dis advantaged"...
Your Answer
Pleaselog into answer this question.