Strategy: 10 Steps to Building a Multimillion Dollar GovCon Business

US CapitolI spent over 10 years in Government Contracting/Consulting (GovCon) in roles ranging from software development, web development, project management, and product development to leading capture and proposal teams. I helped build a $25 million per year enterprise collaboration software practice supporting civil, military, and law enforcement agencies across the federal government.I say all of this a show that it is possible for anyone to successful sell products and services to the government. This is not just for technology and services. I personally know multiple founders of GovCon businesses that generate $25-50 million in annual revenue.

Most people believe that winning government contracts is difficult full of hurdles and paperwork. Nothing could be farther from the truth. The key is understanding the details and building a network of contract officers, consultants, peers, mentors, and other experts in the GovCon market. Below are 10 steps from the FDIC guidance on bcoming a government contractor. Over time, most motivated entrepreneurs can build a multimillion dollar GovCon business.

1. Decide what you are going to sell.

The first thing you’ll need to do is figure out what products or services you will sell. To start, investigate ways that your business can fill existing needs in the federal government. Then, find out how federal agencies can purchase these products and services. If you sell something the government buys routinely, it probably appears in a GSA schedule. For less common products, log on to the Federal Procurement Data System, which records detailed information on most of the government’s past purchases. Additionally, each agency produces a procurement forecast with contact information; you can find these forecasts at FedBizOpps.gov (fbo.gov), the government’s exhaustive contract solicitation website.

2. Gain an Understanding of the Basics.

Do your homework. Make sure you understand the whole process of government contracting so you know what you’re getting into and can be well-prepared. The intricacies of government contracting can be overwhelming. It’s easy to get mired in the details, but if you want to be a government contractor, you need to master and move beyond the basics. To gain a command of the basics, seek out expertise from the Small Business Administration (www.sba.gov), consultants, peers, mentors, and others to learn how government contracting works.

3. Register Your Business.

If you do not already have a “DUNS Number,” contact Dun & Bradstreet at http://www.dnb.com to obtain one. Your DUNS Number is an important “identifier” that is used for a multitude of purposes by the federal government in the contracting arena. Next, you must be registered in Central Contractor Registration (CCR) database to be awarded a federal contract. The CCR database holds information relevant to procurement and financial transactions. Help government procurement officers find you by including the optional federal codes for your product categories and keywords that indicate past performance. Once registered in the CCR database, businesses that meet the government’s definition of small are prompted to create a profile, which procurement officers and others can then find using the Small Business Administration’s Dynamic Small Business Search database. Lastly, go to Online Certification and Representation Application (ORCA) at http://www.bpn.gov in order to enter your business’ representations and certifications, which is mandatory for submission of sealed bids or requests for proposals.

4. Get Certified.

The federal government sets aside contracts under $100,000 for certified small businesses, and regulations often encourage procurement officers to reserve larger contracts for small businesses, as well. Determine if your business qualifies for local and federal small business certification programs. The Small Business Administration has three contracts-related certification programs:  8(a) Business Development, Small Disadvantaged Business (SDB), and HUBZone certification. To learn more about these programs and to determine if your business qualifies, go to the appropriate SBA website at http://www.sba.gov/8abd, http://www.sba.gov/sdb, or http://www.sba.gov/hubzone.

5. Build and Grow Your Network.

Networking is an important part of government contracting. To do it well, you need to learn that it isn’t always about what you want, but how you can help someone else. Learning to listen and find out what others need is critical. Take advantage of events hosted by the SBA, the Department of Labor, and other agencies to meet Contracting Officers and learn what their needs are. Depending on your product or service, don’t hesitate to lend it out or do a demo at the agency—the more they can see, the more inclined they will be to buy. At the same time, selling to the government is different from selling to the private sector. Extreme aggressiveness can be perceived negatively, and might be a deterrent rather than an incentive. Consider giving government buyers a concise capabilities statement for your business. From there, try to get as close to the person using the product as possible so that the user becomes your advocate. Networking is critical to finding out about new opportunities and meeting strategic partners and advisors.

6. Develop Your Strategy

Once you’re organized for growth, identify and target specific agencies and decision makers with whom you want to build relationships. To really add value, resist the temptation to give them a product pitch; instead, go into listening mode. Identify the challenges the agency is facing and the emerging trends that may affect the organization. Then, determine whether your offerings resonate with the audience, and, if not, why. Ask decision makers to share what they are looking for, and how your business could be of value. With this information, you can build a detailed profile of your target and hone your value proposition accordingly. Then, it’s important to define your expected sales capture/win rate, and measure it weekly to gauge your performance.

7. Prepare Your Team.

Before your business is awarded its first contract, prepare your team to support the government’s needs. Identify internal skill sets that could be leveraged once your business begins doing business with the federal government. Next, improve workflows to ensure that the right systems and processes are in place to quickly deliver as promised. Lastly, find talent that can fulfill both the sales and the “capture management” roles of your contracts. Your talent is not likely to be one individual. Your best salesperson should be charming and adept at connecting with people. Yet once the opportunity is identified, a different person should execute the bid strategy to ensure that you meet requirements and are poised to win.

8. Identify Opportunities.

Many contract opportunities worth more than $25,000 are published on www.FedBizOpps.gov. In 2008, some 45,000 solicitations appeared on the site. If your product or service is either off the shelf or widely used across the government, chances are it’s listed on a Federal Supply Schedule managed by the General Services Administration (www.gsa.gov). With GSA schedules, the government negotiates low prices with a variety of sellers, typically for five-year periods with options to renew. State and local governments may also use GSA schedules for technology and disaster-preparedness products. A business can apply to become a scheduled vendor by responding to the schedule’s standing solicitation. As part of your solicitation, you will have to submit to a “past performance evaluation” of your commercial sales. However, even if the government accepts your offer and lists you on a schedule, it won’t guarantee a purchase. You will still have to market yourself as you would with any prospective client.

9. Explore subcontracting.

Subcontracting represents a huge opportunity in many sectors. As the number of businesses selling to government agencies grows, there may be more of a need for the product or service you sell. Some small businesses begin working with the government through subcontracting because it allows them to gain experience while preparing to bid on their own contracts. To find out more:

10. Place your bid.

Government bid solicitations can be daunting. With attachments, they can easily run a hundred pages. Read them carefully. The government takes all its rules seriously, and you can be disqualified from participation for submitting an offer that is, for example, too long. Additionally, make sure you understand all the terms of the proposed contract. Many of these will be stated in the solicitation, but many others will be incorporated from other sources, particularly the Federal Acquisition Regulation (FAR), the set of rules that governs procurement. Don’t waste your time with the entire FAR, but be sure to read the contract provisions that are referenced in the solicitation. If your offer is not accepted, ask for a debriefing from the contracting agency. Most times, they will give it to you, and they will tell you why you weren’t chosen. Debriefs are important in helping you grow, and you should take advantage of the opportunity. Finally, be realistic about your capabilities. The government relies on past performance when deciding to award a contract. If small businesses get in over their heads on their first government contract, then chances of repeat work are slim. Start with a smaller project you know you can do well and prove yourself.


Daniel is a digital consultant specializing in IT advisory on technology strategy, investment, and implementation. He helps companies solve complex and strategic problems across multiple industries and domains. His drive to find solutions for clients and attain personal growth for himself is what keeps him at the forefront of innovation and helps him guide teams and organizations to cultivate amazing products and services. He can be found on Twitter at @dewilliams.

Strategy: The What and the How of Technology Strategy

compass-imageImagine I tell you that I want to go to San Francisco from LA. You then begin plans to determine the best way to travel to SF by either car, plane, or boat. After careful analysis, you select flight as the most efficient way to get us to SF and begin working on travel plans and booking flights. About midway through your work to get us to SF, I come back and say actually, Toronto is a much better destination. How would you feel if the tickets had been purchased and lodging booked? This is what many clients do to their teams by believing that the project objectives are fluid and can be a “living document” to be changed anytime. This the “what” part of tech strategy (what are we doing, what is the destination etc.) that I believe is critical to defining before you get to the “how” (how are we building this, how are we getting to the destination, etc.) of any project.

Let’s be honest, defining the “what” part of tech strategy is hard work and is commonly avoided or giving very minimal attention from managers and executives before they embark on that high-profile digital initiative. It is what causes many tech teams, designers, and PM’s to pull out their hair as they attempt to lock down the objective of a project while being simultaneously pushed to “just build the damn thing and get it launched.”

So how do we avoid this headache and get stakeholders to agree on objectives that provide the team with a compass to find the project’s “True North?” My advice is to be honest with managers, executives, and clients. Let them know that by “evolving” goals, they are forcing the team to constantly find a moving target. This typically results in increased costs, delayed or canceled projects, and a huge hit to team morale. By defining the objectives upfront, the success metrics can be defined and measured upfront. If the metrics dictate a pivot, you have the data to back up a change in strategy. This is why it is critical to define the “what” in your tech or digital strategy.

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Daniel is a digital consultant specializing in IT advisory on technology strategy, investment, and implementation. He helps companies solve complex and strategic problems across multiple industries and domains. His drive to find solutions for clients and attain personal growth for himself is what keeps him at the forefront of innovation and helps him guide teams and organizations to cultivate amazing products and services. He can be found on Twitter at @dewilliams.

How to Differentiate You Product Using a Competitive Matrix

beat the competition

Every business that provides a product or service needs to differentiate themselves from their competitors or alternative solutions. For purposes of this article, I don’t really make a distinction between competitors and alternatives since both will keep customers from using your product or service. For example, Amazon Books technically competes with Barnes and Noble (B&N), but an alternative to Amazon and B&N would be your local library where books are free.

 

When developing your differentiation strategy, you should look at the problems that your target customers have and how your product or service solves those problems. List each problem in a table or spreadsheet down the first column as in Table 1:

Competitive Matrix
Table 1: Competitive Matrix

When scoring your product, try to be as objective as possible, not overvaluing your product and undervaluing competitive or alternative products that solve your customers’ problems. Also, prior to putting together this matrix, your should already have a firm grasp of the problem(s) you are solving and who are your target customers.

The next step in this process is to do a quick calculation comparing your product against the average score of your competition’s ability to solve your customers’ problems. The process involves pretty simple math:

  • Take the average of your competitors/alternatives for each problem line (ex for line 1: (1.00+1.00+3.00+2.00+3.00)/5 = 2.00)
  • Subtract the average for each line from your product’s score for that line (ex: for line 1: 4 – 2.00 = 2.00)
  • Take the average of the difference for each line.

Table 2 below shows how this fictional “Fancy Problem Solver” stacks up against the competition with an overall score of 1.53.

Competitive Score
Table 2: Competitive Score

In my experience, anything less that a 1.5 has some serious competitive problems. Also, anytime you have this many competitors and alternatives, you should consider solving a different problem or creating a new category that doesn’t exist. This does not mean that you are making up a BS category to avoid the hard work of competing. What it means is that you create a new category in the minds of customers so that they no longer associate your product or the problems you solve with any other alternatives.

I have personally helped may clients define their product, competitive landscape, and how to position their solution in the minds of their customers. For example, I have a client that provides a luxury, high-end service. They were have trouble defining the services and attracting customers on a recurring basis. In looking at what they offered, I first determined that they were defining their services in the sports therapy category, when they should be defined in the luxury therapy category. Once we had a new category definition, we then reached out to multiple luxury car dealerships in the area (this is a very posh, well-to-do community in Southern CA) to offer memberships to the dealerships’ customers. All they need to do is show up with their key fob and they were treated like royalty. This has translated into an increase in foot traffic and most importantly, an increase in sales and profit margins.

If you would like to discuss how I can help with your product or service strategy, feel free to contact me via the comments or LinkedIn.

Life Strategy: Mental Models

I discovered the wisdom of Charlie Munger a few years ago and have been obsessed with his concept of Mental Models for solving both complex and everyday problems. I’ve been slowly working through mastery of each mental model recently as a refresher and to tackle some new challenges in life and business. I highly recommend going through the list and rank you knowledge of each from 0-5 (0 being no knowledge and 5 being mastery of the mental model). While I wouldn’t call myself a master of any of them yet, I have self-ranked 3-4 on a few of them that I find most useful and use frequently. Hope you enjoy!

Mental Models