Is your business ready to sell to the government?
There are a number of steps any business needs to take to get started in government contracting, including determining if your business qualifies for small business certification, getting a DUNS number, registering with the System of Award Management (SAM), and more. But what about preparing your business sales, marketing and operations infrastructure?
Here are nine questions to ask yourself about your small business’ readiness to make a successful leap into government contracting.
- Are you an established business?
Prime contractors prefer doing business with established firms and require at least two years of business experience. This, of course, doesn’t preclude you from becoming a sub-contractor. In addition, you should also make sure you have all your business obligations – like licenses and permits – checked off.
- Are you a low-risk choice for the government?
Procurement officers also prefer a low-risk choice. Do you have a track record of on-time service delivery, reliable goods, sticking to agreed budgets? Is your team qualified? Is your industry reputation strong? You’ll need to evidence all these capabilities when you bid.
- Have you got a sweet spot?
Government purchasers look for proof of performance and strong references, so it makes sense to focus on what you do best. This will also help you home in on your value and differentiate you from other businesses. Once you’ve identified your sweet spot, put a business plan around your government sales strategy.
- Are your prepared to research, research and research some more?
It’s critical that you understand what agencies are buying and the procurement vehicles they are using. There are many data sources available that can help with this as well as some creative strategies that you can use such as focusing on agencies who aren’t meeting their small business set-aside goals. Take advantage of industry events to get in front of program managers and understand their priorities and upcoming projects before they are posted on FedBizOpps. To learn more, read these 8 Tips for Finding Government Contracting Opportunities.
- Do you understand how the government buys?
The government has different levels of purchasing, each with their own set of rules. To understand how the federal government buys, including the meaning behind phrases like “micro purchases,” “simplified acquisition process,” “consolidated purchase vehicles” and more, read Learn How the Federal Government Buys from Small Businesses.
- Can you staff up?
From navigating the sale to securing and managing contract vehicles, you’re going to need a skilled team of experts who knows how the process works. This team should include a proposals manager, contracts manager, experienced sales team and marketing support. If cost is a factor, you can also outsource this function. A number of consulting firms including immixGroup, GovWin by Deltek, and others offer contract management, market intelligence, training and other services.
To help you “talk-the-talk,” consider hiring former government employees. They can provide invaluable advice on tailoring your proposals to a specific agency’s needs and procurement processes.
- Do you know how to market to the government?
When the government buys, it buys differently than the commercial sector; the language it speaks is different. Its motivations for buying are different – how you market to the government needs to reflect this difference. Government marketers are also different from private sector marketers. They know the space and what works. If you can’t afford to hire a dedicated government marketing resource from the get-go, you can always hire a consultant; just don’t ignore this important facet of your government contracting strategy.
- Can you put boots on the ground?
Selling to the government is a networking-intensive activity. If you hire a government business development manager, you may rarely see that person. He or she will be too busy attending trade shows, table tops, seminars and forming teaming relationships. So in addition to headcount budget, you’ll need a healthy T&E budget and be willing to let your government sales team loose, unsupervised!
- Do you have the cash flow to cover slow returns and long payment cycles?
Not only does it take a long time to win that first government contract, it can take up to two years to start making a return on your investment. Likewise, the government doesn’t always pay in Net 30 days. Do you have a view into your cash flow forecast and can it sustain you until you start seeing a return or get paid? Try to maintain a diverse body of private sector clients to offset the initial losses that you might incur.
To help you determine if your business is ready and for advice about navigating the contracting space, get help from SBA’s local Procurement and Technical Assistance Centers (PTACs). PTACs also provide up-and-coming government contractors with services such as training, counseling and business matchmaking events.
Caron Beesley is a small business owner, a writer and marketing communications consultant. Caron has worked with organizations including the Small Business Administration (SBA.gov) and private companies to promote essential resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley.