Primer for Small Businesses who:
– are brand-new to government contracting OR
– already down the path of government contracting and looking to solidify their foundations.
Government contracting is not necessarily the best next step for every business, however, there probably comes a time in the evolution of every business when government contracting should at least be explored as a potential avenue to grow the business.
It’s no small undertaking to pursue government related business. Governments at all levels in the United States have had over 230 years to figure out how to buy your widgets or your services… and they have pretty much documented every step and developed a process around them. While there are similarities to traditional selling, government contracting is unique in many ways. It has its own language and its own rules and requirements.
A company needs to be ready, willing, and able to take full advantage of the government contracts marketplace – as it can be a great opportunity for growth.
Six Things to Keep in Mind
As a starting point, here are some things to help us start to understand government contracting:
- Largest Target Market in the World: “Government” at all levels – federal, state, local – buys just about everything and combined they are arguably the largest target in the world. In addition, the government works to make sure that small businesses have a place in government business activities through ‘set-asides’ and other programs. Together, these two factors can make government contracting a very attractive opportunity for small business owners.
- Yes, it’s Very Competitive: Most government opportunities are rooted in a competitive RFP (request for proposal) process of some kind. They are often at least looking for two (2) companies that are competent, capable, and willing to provide service to the government. This helps to assure that the government has done what it can to find effective solutions at the lowest possible cost.
- It’s about Compliance: You might have the best solution at the best price but if proposals are due at noon and you show up at 12:01, the world will go without your solution until you figure out how to submit a compliant proposal. That’s just an example – there are many layers to “compliance” but, in short, “compliance” means that a small business needs to have the capacity for a lot of reading, writing… and adhering to the government’s timeline.
- It’s Not a Quick Fix: It takes time to do the required research, develop the relationships, and explore opportunities in government contracting. As a starting estimate, a capable business might want to plan on at least 9-18 months of steady effort before securing any kind of business related to government contracting.
- The Government Doesn’t Need to be Anyone’s First Rodeo: A brand new business can be eligible to pursue government contracting but the government often isn’t inclined to engage with new businesses. They are often looking for businesses to ‘cut their teeth’ on commercial or lower-level government contract opportunities. The government is no different than Amazon, or Wal-Mart, or Dell, or any other large business – they have a lot of willing vendors so they can afford to be selective.
- Relationships still Matter: It’s easy to think that government contracting is strictly an ‘online’ transaction, but successful government contractors have multiple relationships with government agencies and prime contractors. Success in government contracting is still dependent on human interaction.
Must Have Capacity for Education and Research
You will likely need to become a ‘student’ of the government contracting process. Government contracting can be complex and it can be a moving target. The nature of government contracting can include:
- Unique Processes
- Vocabulary all its own
- Compliance (Rules, Regulations, Laws)
- Frequent changes and updates
The Processes Don't Start With the Posting
Even those with some understanding of the process tend to think that a government contracting opportunity ‘starts’ with a government agency posting a solicitation on an electronic bulletin board. The reality is that posting a solicitation is closer to the end of the process than it is to the beginning.
Something to Consider:
If you are learning about a government contracting opportunity from its posting on a bulletin board… the odds are that you would not win the award.
Look at it this way… Imagine you find a posting for a 3-year contract to provide a service. Proposals are due in 30 days, and you feel that you could develop a great proposal in a month!
What you need to keep in mind is that this is probably not the first time this contract was posted. It was probably awarded 3 years ago, and this posting is for a renewal. So, what does that mean?
- There is an incumbent. The company that won the award the last time has probably been working hard to do what they need to do to get it again. The incumbent probably plans to bid on it this time around as well.
- There are likely several companies that fell short last time but have been focused on not doing so again. So, they have been working to better understand the customer, hone their skills and capabilities, and expand their relationships.
- It’s also likely that the government has done some kind of market research to identify additional potential vendors. For example, maybe the government executed a sources sought notice (SSN) or Request for Information (RFI) to better understand the market. Perhaps they are looking to create a set-aside for a particular category of small business and/or perhaps they are looking to explore the current capabilities of an industry. Market research by the government is intended to make multiple companies aware of an opportunity. SSNs and RFIs can be a great place to jump into an opportunity.
So, there are potentially any number of companies that have been aware of the opportunity for months, if not years, before you find the active solicitation on a bulletin board. They have had the date circled on their calendar and they have had action plans in place to research the opportunity and develop the necessary relationships.
It’s very difficult to make up for all that in 30 days (or less) … even with a great proposal.
Identify Potential Target Markets
You can’t sell to the ‘government’. It’s too big and too diverse… you wouldn’t be able to develop a focused enough message to “break through the noise”. You need to think of the government marketplace as a group of potential target markets and target accounts.
At a minimum, the government marketplace can be approached in terms of six (6) broad target markets:
- Federal Government
- State Government
- County Government
- Local Government
- Large Prime Contractors
- Small Business Prime Contractors
Even those are still fairly broad, and you would need to drill down even further. Examples of specific target markets could be: “School Districts in Central Florida”, “Small Business Prime Contractors supporting Air Force bases in Florida”, or “Simulation and Training Vendors in Orange County”.
Often, early success in government contracting is found in working with a prime contractor in one form or another and/or with working with local government. So, you might want to consider these avenues as you develop your initial target account list.
Don’t forget your KLTs!
As you consider target markets don’t forget about your “Know/Like/Trust” list, or KLTs. These are the people already in your network… people that know you, like you, trust you, and love you. They want you to do well. Plus, in a region like Central Florida, almost everyone is likely one or two degrees away from someone involved in government contracting that could be helpful to you.
Your KLTs need to know what you are doing!
Three Phases of Business Development
The government contracting ‘sales process’ can be considered in three (3) phases:
Getting Positioned for Government Contracting
You can’t wait for perfect and at some point, you do need to jump in the deep end but there is some logic in taking some basic steps to make your business look, act, and feel like a government contractor. These basic steps could include:
Every level of government, and most large prime contractors, require the vendors to “register” with their procurement team. Vendor registration isn’t really a thing in the residential markets or even most commercial markets but it’s a requirement of government contracting.
- You Don’t Need to Pay for Vendor Registration Services. There are number of companies that will charge a fee to register your business with justifications such as “…it takes time to register, and your time is valuable.”
- Just about all county and city level agencies require businesses to be registered in their procurement databases. There are several companies that provide ‘portal’ services to support local agency procurement efforts, but you still need to do what each individual local agency requires you to do to be considered a ‘registered vendor’.
All businesses are different but it’s the general opinion of this author that if a business doesn’t have the time to register to be a government contracting vendor, then it most likely doesn’t have the time to be a government contractor.
Develop Your Messaging
All marketing is about delivering a targeted message to a targeted audience in order to generate a targeted response (aka a ‘lead’). Government contracting is no different. You will need to develop ‘your story’ that could include features, benefits, differentiators, experiences, value propositions, and keywords (because you are targeting computers sometimes too). A great place to start is to open a Word file and just start brainstorming ideas for each of the areas listed above.
Build Your Initial Marketing Toolkit
Many different marketing tools can be effective in government contracting but here four (4) you might want to develop first:
- A Baseline Capability Statement: A “Capability Statement” is a one-page piece of collateral that introduces your business. In the commercial markets, a similar tool might be called a “Fact Sheet”. Sections of a strong capability statement could include “Core Competencies”, “Differentiators”, and “Past Performance”.
- SBA Profile: The SBA maintains a database called the “Dynamic Small Business Search” (aka DSBS). This is a database of all federal vendors often used in research by government agencies, prime contractors, and other small businesses at all levels. While this database is designed to support federal procurement, it can be useful to have a complete SBA Profile in the DSBS even if you are just targeting state and local procurement. Plus, it can be a great tool for you to research competitors and find potential teaming partners.
- Website/Online Presence: If you get someone interested in your business – it is really easy to ‘check you out’ online so a good addition to your initial marketing tool kit could be to weave your government contracting story into your website, LinkedIn pages, industry directories, and your other social media.
- Elevator Speech: Some people take 10 minutes to say ‘hello’… don’t let that be you. You want to be able to briefly introduce your business and some of your key value propositions in less than a minute. As with capability statements, you are competing against companies that take this seriously… they script it, practice it, revise it, and tweak it for every opportunity. You probably want to do the same.
Keep in Mind:
You will be competing against companies that customize their capability statement for every opportunity. They will tweak their baseline document based on their research and understanding of the opportunity. You will probably want to do the same.
Reactive Lead Generation Process
As referenced earlier, almost all government opportunities/solicitations are posted on some kind of electronic bulletin board. Remember, this is near the end of process, but they are still active opportunities available for bid, so you don’t want to just ignore them completely. A part of an effective ongoing business development campaign is to have a process in place to identify postings of interest, assess them as potential proposal opportunities, and glean any useful information (such as point of contact data).
Components of a reactive lead generation process could include:
- Understand the Bulletin Boards: Get to know multiple bulletin boards such as SAM.gov, DIBBS, MyFloridaMarketPlace, VendorLink, and agency websites of interest to you. Get to know how they work.
- Initial Capture Process: Finding government contract solicitations isn’t hard… identifying and prioritize opportunities that could be useful to you is the challenge. A good ‘capture plan’ provides some structure and procedure to quickly sifting solicitations to find opportunities.
- Bid-Matching Services: Many of the bulletin boards include the ability to sign up for feeds based on industry codes and/or keywords. There are also a number of fee based ‘bid matching’ services that you may eventually chose to explore. The Florida PTAC also offers a no cost bid-matching service to its registered clients.
As a starting point, some new government contractors will simply position the business for government contracting and develop a reactive lead generation process while they continue to focus their proactive efforts on their commercial markets.
Proactive Relationship Building Process
Ultimately, a successful ongoing government contracting initiative includes a proactive business development effort that is focused on getting ahead of the solicitation as much as possible. The goal is to target and connect with specific agencies, or other contractors, to become aware of opportunities before they are posted.
Components of a proactive business development process could include:
- A “Weekly Call List” Discipline: The core of any strong business development process is the weekly call list. The capacity and the discipline to reach out to targeted accounts. It starts will literally ‘a list’. Every Monday morning, start with a prioritized list of targeted contacts that you have identified as potentially helpful in your efforts in one way or another.
- Define your ‘Journey’: You send an introductory email with your capability statement attached… but then what? What is your follow up process? How are you going to work to get the targets attention and position yourself as a credible and trustworthy resource? Hint: It’s not about YOU… it’s about VALUE.
- Relevant Questions: When you do connect, have some relevant questions to ask. Try not to ask questions that can be answered on the internet or through some basic research.
- 90 Day Cycle: Consider thinking in terms of a 90-day marketing cycle. What target markets and target accounts are you going to target for the next 90 days? What marketing tools, messaging and journey strategy are you going to utilize? At the end of the 90 days make sure to assess progress and tweak as necessary.
- Blended Strategy: Create a blended proactive strategy to combine your government call list activities with your commercial and residential business development efforts.
- Time Management: Don’t let these efforts be random, catch-as-catch-can events. Define your capacity (i.e., 50 calls a week) and define specific windows each week that you set aside for proactive business development. Work your proactive business development plan every week… for the rest of your life.
Potential Next Steps
This primer isn’t designed to make you a government contracting expert, but the hope is that if you are new to government contracting you have at least been introduced to some of the components of the process. If your business is a little down the road in government contracting, hopefully this primer has helped you identify at least one or two opportunities for improvement.
So… what next?
Perhaps you can:
- Become a Student of Government Contracting: Visit SBA.gov, YouTube, your local PTAC site, and other sites and identify a list of training videos and documents to review over the next 30-90 days. Create a curriculum plan and work the plan.
- Research: Research companies that you know… competitors, vendors, customers and see if they are involved in government contracting. Reach out to them and see what you can learn. Research bid sites and targeted agency sites to learn how, and where, the government buys what you are selling.
- Find a Mentor: A business owner in, or near your industry, that has gone down the government contracting road before you and would be willing to share some insights and experience. Could be someone that is retired, or they could still have an active business. The SBA program SCORE can be a great resource in that regard. They may have some mentors in their network with the experience you are targeting.
- Connect with Your Local APEX Accelerator: Their purpose is to provide consulting support to businesses involved in government contracting… at no cost. Learn how the Florida APEX Accelerator can help your business.
There is always the matter of proper timing but government contracting can be an exciting journey for a small business.
The Florida APEX Accelerator at UCF is funded in part through a cooperative agreement with the Department of Defense. Government Contracting Services are offered by the Florida APEX Accelerator headquartered at the University of West Florida (State Office).