Government contracting has a familiar starting playbook. New firms often lease office space in Washington, D.C. or Northern Virginia, buy equipment meant to impress during tours, and spend on marketing collateral that signals scale before the company has built any. Margarita Howard chose a different path when she launched HX5 in 2004.
Instead of visible growth signals, Howard put her limited startup funds into a specialized accounting system built for companies that work with the federal government. The software was reviewed and approved for government use, a detail that mattered far more to auditors and prime contractors than a polished lobby ever would.
An Investment Aimed At Partners, Not Appearances
Howard has described the decision as practical rather than flashy. She has said “something HX5 did very early on rather than buying big fancy furniture or offices” was to fund back office infrastructure instead. The payoff showed up when larger defense firms began looking for small businesses to bring on as subcontractors.
Those prime contractors faced a recurring problem: many capable small businesses lacked the administrative systems needed to handle complex billing or survive a federal audit. HX5 had already solved that problem before it needed to. The company could bill the government correctly from day one, which made it a low-friction partner for primes trying to meet their own small business subcontracting goals.
That early groundwork compounded over time. Each contract added performance history. Each clean audit built trust. HX5 has since grown from a single employee to more than 1,000 people working across more than 20 states and roughly 70 government locations. It now operates as both a prime contractor and a subcontractor, a range of roles that Howard traces directly back to infrastructure choices made before the company had won its first major deal.
Howard has said other small businesses often wait years to make the same investment, choosing instead to grow headcount or chase visible signs of progress first. HX5’s experience suggests that order can be reversed without slowing a company down, provided the early spending goes toward systems that partners and auditors will actually rely on later. Refer to this article for additional information.
Find more information about Howard on https://m.doyoubuzz.com/margarita-howard
