What is Business to Government B2G? - Explained

There are businesses that target governments all around the world as their sales targets to sell their products or services developed or manufactured by the business. Businesses that target governments to sell their products or services are having a business model of Business to Government (B2G).

Doing Business with Governments

There are very few businesses in the world target governments to sell their products or services to sustain the business. There are a couple of reasons behind the companies which are targeting governments to sell their products or services. Governments do have a large amount of cash flow compared to businesses in most businesses in the world and direct consumers.

If a business focuses on a government to make a sale of the product or service of what they manufacture or develop in house, it could be something that can target the entire country. Something like Money Note Printing, everybody uses bills to pay for most of the stuff daily. And there could be a million bills a government needs to print monthly to replace damaged notes to new notes.



There are many IT firms doing business with governments. Starting from the tax collection to paying the simple parking ticket is done by private limited liability businesses. 

There's another extremely famous factor in the world which is known as Defense. There are many Limited Liability Businesses in the world selling military equipment to governments all around the world to protect the country and to fight wars. Selling defense equipment is to governments are high-profit businesses where limited liability companies doing business with governments.

Extreme Strategic Business

Doing businesses with governments isn't easy like talking another business or a consumer and pitching the product and selling the product or service. There are businesses in the world who have been trying to sell a product or service to a government for a large number of years and some of the businesses do get failed to sell the product or service to the governments.

Selling a product or service to a government is required extreme strategic business strategies. There are many space transportation businesses in the USA trying to win a contract by the government to send some cargo to space. And most of them are getting failed of proving the concept.

There are key factors that a government interested in the business. How much the solution will cost, What's the reliability of the solution, Is it easy to use and how stable the business is to provide such a solution.

If a business could tackle these questions around, there is a chance that a business could tie up the government and do business.

Risk of Doing business with Government

The government is political decision of a country's population. The government can be elected by the vote of the general public. There's a chance that one government does not like the previous government's decisions. Doing business with governments could be the riskiest business to make. 

If a government-owned airliner makes an order for 20 airplanes in the next 2 years by signing the agreements with the airplane manufacturers and settling a payment in advance which is not the full value of the airplane. If the government changes and the next government can cancel the order of the purchase of airplanes.

The cancellation of the order could hit the business in a massive way. And broke the expectation of selling an aircraft which already the business has put some effort and invested capital. 

Doing business with the government needs extreme risk management approaches for a business to become sustainable and maintain business momentum.