Every startup faces decisions about where limited capital should go first. Margarita Howard made hers early, and the choice she made in 2004 still shapes how HX5 operates today. Margarita Howard has since become an example other founders in the industry point to when discussing early-stage priorities.

Rather than leasing prominent office space or investing in marketing materials meant to project scale, Howard directed HX5’s early capital toward a government-approved accounting system, along with qualified personnel and financial reserves. The company delayed headcount growth and outward signs of success in favor of operational systems that would let it actually compete for government work.

Compounding Results

“We knew the investments that we had to make to be successful, to compete and not wait on those sole sources, and be attractive to the government and large businesses to work with us,” Howard said. “And both highly paid off.”

The results compounded over time rather than appearing all at once. Each contract HX5 completed added to its performance history. Each audit it passed strengthened its credibility with federal agencies. Each teaming arrangement with a larger prime expanded its network within an industry where reputation determines access to future work.

Howard has pointed out that many peers take a different path, often waiting years to make similar investments because the upfront cost is hard to justify without existing contracts. “A lot of small businesses usually wait many years before making such an investment, but we found tremendous benefit from having it in place early on,” she said.

HX5 has since grown from Howard’s original single-employee operation into a company with more than 1,000 employees spread across more than 20 states and roughly 70 government locations. It now wins prime contracts uncommon for firms its size, maintains subcontracting relationships with major defense primes, and has been recognized as Prime Subcontractor of the Year. For Howard, the philosophy behind that growth was never complicated: build the foundation before the appearance of success follows. Refer to this article for related information.

Find more information about HX5 on https://www.itsecurityguru.org/2025/11/12/what-will-defense-contracting-look-like-in-10-years/