Most startup founders look for ways to conserve capital in the early months. Margarita Howard did too but her version of capital conservation looked different from the standard playbook. Instead of skipping back-office investment and spending on visible signs of growth, she skipped the visible signs of growth and invested in back-office infrastructure that would determine what kinds of work HX5 could pursue.

The centerpiece of that infrastructure was a government-approved accounting system, purchased at HX5’s founding in 2004. The software was designed specifically for federal contractors, recognized by government auditors, and already in use by the large defense firms that Howard hoped to partner with as HX5 grew.

A Narrow Window for Partnership

In the federal contracting market, small businesses often have a limited window to establish themselves as viable partners for large prime contractors. Those primes are required by government contracts to include small businesses as subcontractors, creating demand for capable partners. But the demand favors companies that are operationally ready that can handle billing properly, maintain audit trails, and perform without generating administrative headaches for their partners.

HX5 met that standard from the beginning. “That was one aspect that made HX5 very attractive to large businesses who were looking to partner with small businesses to meet their small business goals that are often required in large government contracts,” Howard said.

Margarita Howard framed the broader approach as a matter of understanding the industry before trying to compete in it. “If you don’t have the competitive edge and understand what it takes to compete for government work, then it’s a daunting task,” she said. “You have to know and understand the industry first, then build a good team, have the right infrastructure in place.”

The Payoff

HX5 has grown into a company with more than 1,000 employees working across more than 20 states at over 70 government locations. It has won prime contracts at a scale that few firms of its size achieve and has been named Prime Subcontractor of the Year. Large defense companies now serve as subcontractors on certain HX5 awards a reversal of the dynamic that characterized the company’s earliest years.

“We have won some very large prime contracts,” Howard said. “And we have large businesses as our subcontractors. And then we’re a very good subcontractor as well.” The arc of Margarita Howard and HX5 from a one-person startup to a nationally operating contractor reflects what is possible when a founder matches industry knowledge with the infrastructure to act on it. Refer to this article, for related information.

Learn more about HX5 on https://ritzherald.com/ceo-margarita-howards-background-shapes-hx5-approach-to-veteran-employment/