Government contracts can drive business growth...or drive a company out of business! These five tips suggest what it takes to tackle the world's biggest buyer and win.
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The US federal government will spend over $500 billion this year on goods and services. State and local government contract spending will hit $5 trillion. Those contracts will include commercial and consumer items and professional services as well as highly specialized niche technologies, and everything in between.
Government contracts can drive business growth...or drive you crazy…or even drive a company out of business! Which will it be for you? Whether you plan to be a prime, a partner, or both, these five tips suggest whether you're ready to take on the world's biggest buyer.
1. Strong Performance and Resources
Government customers - and their partners -- want reliable suppliers with established track records. That's most realistic for companies who have a few years' experience and strong references. Startups have the best results when the owner has a full pipeline of eager clients from a previous job and a lifetime of related expertise and relationships. Otherwise, startups that build a couple years' experience racking up top testimonials from marquee-name clients are the ones with the shortest time to their first federal win.
2. Resources: Time, People & Money
Financing -- which might include both a working capital line of credit as well as operational loan -- is essential to win the business as well as to perform and stay in business until you get paid. So is business development capacity. Many small companies take 18 to 24 months to win their first federal prime contract, and need serious up-front investment to pursue, win, and then perform or deliver on government contracts. The average successful small business invests over $130,000 a year, including marketing, salaries and sweat equity, on the road to that first federal contract. If everybody in a small company is billable, and new business development happens somewhere between luck and lunch hour, think again. If your company doesn't have someone with federal business development talent and experience, then you'll need to hire some help. Companies that expect initially to bootstrap their federal business development from their federal contract profits are often frustrated.
3. Unique Value For Government Clients
Federal buyers and teaming partners want to know: How do you stand out from your competition? Your unique value proposition needs to be focused on the buyer. Successful vendors narrow in on the issues and challenges that government buyers face, and express that in their client community's language. Things that the commercial market might find attractive, like innovation, can represent unattractive risk to conservative government buyers and large primes. Companies that are new to the government niche often find that the need to show how they deliver "on-time, on-budget, low risk solutions" rather than "custom leading edge solutions."
4. An Attitude Of Abundance
Ask a government contractor where their best leads come from. It won't be FedBizOpps. 90% of the time, the answer will be "relationships!" What you put out there comes back to you. Sure, there's always another federal budget cut or financial crisis looming. And yes, this is a very tough market. But even if your company is small, new to the market, and scrapping for every dollar, nurture a generous attitude in your federal business development. Cultivate a practice of sharing ideas, leads and connections within your own trusted network, and work constantly at building that network. This is simply one of the most powerful - and free - ways to become top of mind in your niche!
5. Investment In Expertise
The top winners invest almost twice as much time and money than the average competitor to develop cost-effective and successful government marketing strategies -- often upward of $200,000 a year for business development. They make the most of free resources, but they understand that the right specialists can dramatically shorten their time to market. They seek out business intelligence and strategy guidance. They use the services and member benefits offered by the associations they join. They seek out the insider expertise about opportunities, competition process, and connections that a good board of advisers can provide. They spend more…but they also win more, and faster.
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Want to win your next government contract -- or your first one -- faster, and spend less doing it?
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Let's talk. Contact us for a 30-minute consultation. We won't try to sell you anything. And you'll get at least three ideas you can use right away. Email us at Judy.Bradt@SummitInsight.com or call (703) 627-1074.