This is my first blog post here on the subject of business development. This blog series tackles the top ten tips for growing your business with the feds. I have a slightly abbreviated version of the first tip here because I went to town with it and by the time I was done it was four pages long (!). If you still like to read a longer version, you can find it at the Business Development Blog.
I organized the tips to work in a logical progression – to give you the whole picture. This way by the end of the series you will have a fairly complete overview of how you can succeed in the government arena.
Tip 1. Understand the full gamut of federal market opportunities and where your business could benefit from these.
In my opinion, the federal market is by far the best market to do it in. It is stable (the government pays its bills within net 30 days), it is growing, and it is huge. It has a need for everything – be it paperclips, landscaping, professional services, project management, or Information Technology (IT). Go to the General Services Administration to take a peek at the federal supply schedules and see all that the U.S. government buys. In fact, it buys more than 13 million different products and services. Essentially, the U.S. Government is the largest customer in the world, with $524 billion spent in 2009 in accordance with http://www.usaspending.gov. Many contracts are millions and billions in size, lasting multiple years.
But, your capability to grow goes even beyond the “limits” of the vast federal market if you learn how to play well within its rules. Adjacent markets to the feds that have very similar rules of the game include state, local, and tribal governments, and then numerous educational and research institutions (often referred to as the public sector).
Beyond the federal and public sectors there is the private sector with its “complex sales.” Many large corporations have borrowed government’s buying practices. So, if you master the business development process to win government business, then you will dominate the large corporate sales market as well. Now, together with the federal and public sectors, we’re talking trillions of dollars. No matter what the economy is doing, your business will flourish.
Because of the market size and a smorgasbord of opportunities, you have to make an extra effort to keep yourself focused, or you will waste opportunities, time, and resources.
Focus comes from solid strategy and knowledge of how to develop business correctly. The next nine tips will tackle business development, so let’s talk strategy for now.
Strategic business development planning, greatly simplified, boils down to four key tasks:
1. Understand your growth goals and select strategies to achieve them. Decide on the size of the business you would like it to grow to. It’s even more important in government contracting than anywhere else because of all the small business programs that are out there. Your desired outcome will drive your strategies and contracts that you are going to pursue. It will also affect skills you will need to acquire. If you would like to grow your company beyond a boutique size, you will need to master serious government capture and proposal management – so this should be part of your strategy.
2. Match your capabilities with target federal agency clients. Focusing on select few customers will help you build your capabilities and past performance to qualify you to prime and win increasingly larger contracts. If you jump on every opportunity to get a contract, you are unlikely to get anywhere fast. I know of only a handful of companies who have succeeded in growing large by bidding and grabbing every contracting opportunity that came to them, no matter what the customer or area of expertise was – and they had other factors going for them such as plentiful funding and amazing luck. Essentially, in the initial growth stages you have to pick a sector with 1-3 agencies that buy what you sell. Then, work diligently to become a subcontractor to the best prime contractors in this agency. After you perform well on 2-3 contracts there, you can go after contracts and prime yourself.
3. Analyze your core competencies and identify additional areas of profitability so that you could expand not only vertically but horizontally into adjacent fields. Look ahead. Now that you will have successfully landed a handful of prime contracts in a couple of your target agencies, and have generated some good past performance references (which is the single biggest qualifier for getting government contracts), you can think about expanding. You have to figure out how to branch out.
You can do it in a couple of ways: a). Expand your portfolio of services to add capabilities that logically fit with your existing core capabilities that will enable you to go after larger, more lucrative contracts. b). Expand your customer base. Branch out into other agencies that do similar types of work, and consider opportunities in the public and private sectors. The sky is the limit, as long as you keep focused and try not to overextend at any given time.
4. Now that you have done all this thinking and planning, zero in on the specific contract opportunities you are going to chase. Do some searching and start building your pipeline. We will talk about the full cycle of business development in the next few tips and will also talk specifically about identifying opportunities and building the pipeline. If you are already at that point, however, you can get my free report on building government contracting opportunity pipeline from the vantage point of the small, medium, and top-tier government contractors.
Don’t hesitate to ask any questions you have about government contracting. Stay tuned to the next tip.