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: 3 Reasons Why You Should Not Ask Potential Investors or Partners to Sign an NDA

NDAAs I have continued to advise startups and other businesses over that last few years, I have seen a common theme arise: startups and entrepreneurs asking me and others to sign an NDA. I will first say that I understand the need to protect your intellectual property (IP). I also understand the fear that someone may try and steal your idea. However, I personally feel that an NDA is mostly useless and is the telltale sign of an amateur.

There are a few things to remember about your idea that may help you in the future and steer you away from asking investors and partners to sign an NDA.

  1. Your idea probably isn’t that good.
  2. If it is good, there is a really good chance that multiple people or teams are working on a similar idea.
  3. Most people are too lazy or caught up in the there own lives and businesses to steal your idea.

Your Idea Probably Isn’t that Good

Most people have an inflated sense of how good their ideas are (I am guilty of this every day). Some of it is due to the superstar status that successful startup founders can now achieve and the belief that one idea is the ticket to stardom. What many entrepreneurs need to understand is that ideas in themselves are not what is valuable. It is the ability to execute on those ideas. History is filled with teams that had an initial idea and another team came along with better execution (see Facebook vs. Harvard Connect; Google vs. Bing; Microsoft vs. Sun). My advice is always to just focus more on the execution of the idea and less on getting signatures for NDAs. How long do you think you could survive if all of your energy goes to enforcing an NDA while your competitor is closing more deals, winning more customers, and acquiring more users?

If it is good, there is a really good chance that multiple people or teams are working on a similar idea.

There is a quote that I will paraphrase that says “Every good idea has at least 10 other people working on it somewhere else in the world. Every great idea has at least 100 people working on it.” For proof, just look at some of the greatest inventions in the history of mankind. Calculus was invented simultaneously by Sir Isaac Newton and Gottfried Leibniz in the 17th century. Charles Darwin and Alfred Russell Wallace discovered that they had developed theories of natural selection separately in 1858. If some of the greatest discoveries in history were being worked on simultaneously, you can bet that your social cloud image-sharing app is not unique in the world.

Most people are too lazy or caught up in the there own lives and businesses to steal your idea.

Most people really have no interest in stealing your idea. I truly believe that after almost 20 years of technology, consulting, and advising. I attribute most of this to pure laziness. In addition to laziness, people have their own lives and work to deal with that have nothing to do with you or your idea. If more people had the drive or real interest, they might steal your ideas, execute on them, and become the next startup billionaire. However, it is more likely that you will share your idea, they will tell you how great it is, then move on to the next topic. If they truly want in on the idea, they will ask you what you need from them and proceed to tell you how they can help bring your vision to reality (through funding, introductions, coding, design, etc.).

I say all of this simply to show you that an NDA is not the path to protecting your idea or success. It simply shows potential investors and partners that you may have talent, but you are still playing JV ball. I follow James Altucher’s advice and simple life strategy to just give ideas away to others every day with no expectation of anything in return. If you are coming up with new ideas every day, then no single idea will hold any significance for you. You get rid of the fear of someone stealing your ideas and focus on executing only on the ideas that give you pleasure and match your interests.


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.

Podcast: The Beauty of a Bad Idea

Masters of Scale

I found this episode on the Masters of Scale podcast incredibly insightful, with advice on dealing with rejection in business and what to do when you are convinced that you are onto a great idea. Enjoy!

Show Info:
The best business ideas often seem laughable at first glance. So if you’re hearing a chorus of “No’s” it may actually be a good sign… Google, Facebook, LinkedIn, Airbnb — they all sounded crazy before they scaled spectacularly. So don’t be discouraged by rejection. Instead, learn to hear the nuance between the different kinds of “no.” That’s what Tristan Walker did. After stints at two successful startups, he launched out on his own with Walker & Company, makers of the Bevel razor — and learned to navigate the entrepreneurial minefield of investors who may or may not share your vision.