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Government programmes open up a lot of cash and opportunity — but there are major pitfalls to beware of

Business is tough. Doing business with the government is even tougher. Whenever you’re working with such a large organisation, both the opportunities and the pitfalls are massive. Based on my own experience as a business owner in this space, I’m going to give you a few tips on how to navigate these governmental waters.

Seize every opportunity

Every so often there will be a government programme that seems too good to be true. Whenever these opportunities present themselves, carpe diem! Typically, these sorts of programmes will disappear with a change in administration or public sentiment. However, there’s an opportunity to make a lot of money before the programs vanish if you have the determination and the will to seize the day.

If you create a three-, four- or five-year plan, it’s possible that before you see those plans come to fruition, the programme has changed or the opportunity no longer exists. Just seize the moment and enjoy the ride. The government typically works in fiscal cycles, so if your program exits this year, you can plan until the end of the year. However, at the end of that year, you’re going to need to reevaluate.

For example, there was a programme under the No Child Left Behind that allowed for students at low-performing schools to receive free tutoring if they qualified for free or reduced lunch. The programme was an incredible opportunity for anyone who had a tutoring business like myself. However, due to lack of oversight, the programme was shut down in most states. But since I seized the day, our team was able to help tens of thousands of students around the country before the program closed.

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Do it right the first time

You may notice that oversight is minimal and get tempted to not follow all the rules, or to identify perceived loopholes. You’ll also notice competitors regularly doing so with seemingly no consequence. But although the government may be bad at short-term oversight, they are great at it in the long term. Never take shortcuts; make it part of your culture to do things right from the beginning.

This seems simple, but you will run into contradictions between how the law is written and how it’s administered. When this happens, try to get a governmental official to put in writing how they want you administer the programme. My experience is that it’s rare for an official to put something in writing that’s different from the statutory requirements. However, it’s better to know what you’re dealing with upfront. Even if someone told you something was OK during a meeting, that will not protect you. If it’s not in writing, then it didn’t happen. This should be the mantra of any entrepreneur working with Uncle Sam.

A great example of this is the EB-5 program. This program allows a foreign investor to get a green card by investing anywhere from $500,000 to $1 million into a US-based project that creates at least 10 jobs over a two-year span. On the surface, this seems like an incredible program. However, I’ve seen that many who are making money in this space are not properly licensed with the SEC, and therefore should not be brokering these transactions. The SEC has already started cracking down, and I’m confident they are going to make an example of some unsuspecting providers that haven’t taken the time to do things right and become licensed.

Also Read: Medium refuses Malaysian government’s takedown request

Plan your exit and stick with the plan

At any moment, a new president, a new Congress, a new lobbyist or a new politician could change the rules in a way that is devastating to your business. Because of this instability, I recommend identifying a number amount at which you’re willing to exit. If you have a multi-year contract and a way to continue working, it’s a great time to sell the business. Come up with an amount you’re trying to reach and once you hit that amount, be unwavering in your belief and your desire to exit. If you keep waiting for things to get bigger and better, you’re going to miss the best opportunity to sell. You might be wrong — things may continue to soar — so maintain a small portion in order to benefit from that possibility. But in my estimation, it does not makes sense to keep 100 per cent of a business when you know that the next session of Congress could change everything.

Have a stress relief plan

Whether it’s a hobby or a sport, it is critical for you as an entrepreneur to have some sort of stress relief plan. One thing I can promise: you will get frustrated when working with the government. Whether it’s late payments or changing rules, working with the government is tough. But having a built-in stress relief plan to manage the highs and the lows will help you perform at your best no matter what’s going on around you.

Despite the inevitable roadblocks, working with the government is filled with great opportunity. Good luck on your journey down this path.

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Carl Dorvil started a tutoring and mentoring company called Group Excellence (GEX), out of his SMU dorm room at age 21. The company started with a grant from Texas Instrument Foundation, earning recognition as an INC 500 company in 2011. Carl is currently featured as part of SMU’s national marketing campaign, “World Changers Shaped Here.”

The Young Entrepreneur Council (YEC) is an invite-only organisation comprising the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship programme that helps millions of entrepreneurs start and grow businesses.

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