In the competitive landscape of government contracting, success often hinges on strategic decisions made during a company’s formative stages. For HX5, a professional services firm supporting NASA and the Department of Defense across 90 government locations in 34 states, those early investments have proven instrumental in securing its position as a trusted partner for federal agencies.

Prioritizing Infrastructure Over Amenities

Unlike many startups that focus on flashy offices or visible growth markers, HX5’s founder took a fundamentally different approach. “Right from the beginning, we invested heavily upfront in purchasing and implementing a specialized accounting system developed for government service contracting firms,” says Margarita Howard, sole owner and CEO/president of HX5. “A system we knew the government was very familiar with and that would provide us the necessary accounting tools to pass government billing audits and gain government approval for use in the performance of our government contracts.”

This strategic investment created immediate credibility with both government agencies and potential business partners. “So, that was also very attractive to large businesses, that we were very small at the time and that we already had this government accounting system in place that those large businesses had,” Howard explains.

The decision to build proper infrastructure before pursuing aggressive growth was calculated and deliberate. “Those were investments the company made that were very key in the beginning. And certainly the SBA, the Small Business Administration makes those recommendations, but they don’t force you,” adds Howard. “Yeah. And it was a risk that we took and it highly paid off.”

Building Competitive Advantage Through Experience

Howard’s approach to establishing HX5 was informed by extensive industry experience, including service in the Air Force and positions with government contractors. This background gave her insight into what agencies and prime contractors expect from their partners.

“I saw all the areas of securing a government contract,” says Howard. “I then decided to go work for another government contractor for more industry experience, but with the intent of eventually starting my own business, as I just felt that I had seen it all from the ground up.”

When launching HX5, Howard made a critical strategic decision that would differentiate the company from many competitors. From day one, Howard insisted that HX5 would not be the type of small business that relies on the low-hanging fruit of sole-source contracts. “I had that competitive edge or desire,” Howard notes. “We had been in the industry, we knew small businesses in our area, and that’s what many of them did. And once the program was over after nine years, they were done. They had never competed.”

Cultivating Financial Partnerships Based on Loyalty

Securing financial backing was another early challenge that shaped HX5’s development strategy. “We went from the first year where a big part of my job was going and knocking on doors, meeting with the bankers, and trying to get a line of credit, a business loan, etc. I was turned down continually until one bank took a chance on us, and that bank remains our bank to this day. Banks that turned us down when we were small have come back occasionally over the years to try to get our business, but we’ve stayed with the same bank that took a chance on us when we were very small and just getting started,” Howard shares.

This loyalty reflects a broader business philosophy that has guided HX5’s growth. “When you find a good partner like our bank, yes, we have remained very loyal to our key people that started with us,” she says. “Our accounting firm, our banking firm, some of our insurers and things like that. In many cases, we still have the same people we started with. And I fully believe in trust and loyalty.”

Ensuring Long-Term Success Beyond Initial Growth

HX5’s strategic investments have positioned the company for sustainable growth beyond its initial success in the Small Business Administration’s 8(a) program. Howard says, “One of the most important things that should be done before the 8(a) graduates is to create a postgraduation comprehensive business strategy.” This includes leveraging lessons learned during the program and avoiding overdependence on sole-source contracts. She highlights the importance of diversifying revenue streams and building a portfolio of successful projects to attract future opportunities.

For companies looking to follow HX5’s successful trajectory in federal contracting, the lesson is clear: strategic early investments in infrastructure and compliance, combined with a commitment to competitive excellence, create a foundation for long-term success in the complex world of government partnerships.