Fancy furniture and a prestigious address can make a young company look established. Margarita Howard decided neither was worth the money when she started HX5 in 2004.
Her priority was an accounting platform built for government contractors. Howard has said HX5 made this purchase early, choosing it over “big fancy furniture or offices or anything like that.” The system had been reviewed and approved by the government, and it was familiar to the auditors and large prime contractors HX5 hoped to work alongside.
A Different Spending Philosophy
The accounting software was one piece of a wider approach. Howard directed limited capital toward whatever would help HX5 win contracts, and away from whatever would merely signal success. The company hired qualified staff instead of paying for premium real estate. It bought compliance tools instead of marketing materials. It kept financial reserves instead of adding employees too soon.
That approach went against common practice. Small contractors frequently put off buying government-grade accounting systems for years. Federal requirements for accounting adequacy apply only to certain contract types, so many firms pursue fixed-price work first and upgrade when growth forces the issue.
Howard saw the delay as costly. Contractors without proper systems are limited to simpler contracts, smaller awards, and fewer teaming arrangements. They may also miss the moment when a large prime is actively searching for capable small business partners.
What Prime Contractors Noticed
For large firms, the early investment at HX5 answered an important question. Prime contractors often need small business partners to meet subcontracting goals attached to big government awards, yet many small firms lack the administrative capacity to bill correctly or pass audits. HX5 showed it could handle those tasks while still very small.
Howard has explained that large businesses found this appealing. A tiny company was already running the same kind of government billing system the big firms used themselves, which made it an easy partner to bring onto a team.
The company has since grown to more than 1,000 employees. Margarita Howard’s choice to fund infrastructure over appearances gave HX5 access to work that newly formed contractors rarely reach. Read this article for additional information.
Find more information about Howard on https://m.doyoubuzz.com/margarita-howard
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