How To Start A Government Contracting Business – Targeting and building your business’s development pipeline can feel daunting because of the endless possibilities. USA.gov lists over 400 agencies and sub-agencies of the federal government. Within each of these are several business units and individual departments. Together they add up to thousands of potential government customers. So where do you start? Start by defining your ideal government buyer. Understanding who that is will guide every decision you make as you build your pipeline and compete for the job. This is the third article in our “Small Business Guide to GovCon” series aimed at helping small businesses break into government contracts. The series breaks down the “Six C’s to Success” that small businesses need to enter and thrive in the GovCon world. Posts include: Introduction (Know the Basics) Clarifying Your Brand Determining Your Prospects Connecting with Customers Overcoming Roadblocks Seizing Opportunities ‘ competition to win The first introductory article explains what government contracts are and explains the steps businesses need to take to start working with the government. The second article explains the first “C” to success—Clarifying Your Brand—and includes exercises and resources to help businesses clearly define who they are, what they do, and how that make them stand out from their competitors. In this article, we explore the second “C” to success – solidifying your prospects. You will learn how to target and understand your government customer. Confirm Your Prospects To be successful with government contracts, you need to know when to pass up opportunities. This is not intended to limit your ability to profit but rather to limit your focus to bets that you have a greater chance of winning. Contracting officers must bid on all requirements and are tasked with granting many opportunities to small businesses. However, as discussed in previous articles, contracting officers are risk averse and reluctant to do business with new and unknown suppliers. Avoid bidding on opportunities if you don’t know the buyer, the competition, the budget, or the scope of the project. Instead, do your research and start developing relationships with organizations that are already buying what you’re delivering. By following the three steps below, you can reduce the cost of building your pipeline. 1. Analyze Your Current Buyers Strategic government business consultant, Judy Bradt, explains, “Whether you’re selling a service or a product, you need to be able to identify which buyers government most likely to your customers today. ” To do this, make a list of your most loyal customers and then ask yourself the following questions: What do your most loyal customers have in common? Are they in the same industry or geographic location? Do they buy the same services/products from you? How often do these people buy from you? Are you seeing a shift in their buying habits? What are the sizes, specifications and scope of work of these clients? What are they into specifically and why do they need what you are selling/offering? Are any of these customers already in the groups you want to target? You can draw on and reference your previous experience with these clients when presenting your offers to potential government contracting officers. Additionally, your current clients can connect you with companies/organizations they do business with, so tap into those clients who are already in the government space. What is your unique value proposition (UVP) and how well does it align with your organization’s vision? 2. Target Areas of Government Analyze the information you gathered in Step 1 – consider size, scope, scale, mission and location – and determine which federal agencies are most similar to the user list that you chose. Target groups where you already have established relationships. If this doesn’t apply to your situation, narrow your options by asking: What government agencies buy what you sell? Are they similar in size, scope, mission to your current customers? Within these groups, which sectors can your products and services support? How are these departments organized? What programs run these departments and who manages them? How much do they buy? When will they buy? What construction vehicles do they use to buy them? What kind of challenges or problems do they encounter? Who else buys them? (Remember that your competitors are potential business partners.) Once you’ve compiled a list of clients, narrow down the options and select your top five groups to target. 3. Research your top five prospects and identify contacts. Do research using Sam.gov to learn more about your top five agencies and gather contact information for the contracting officers who buy for them. Start by searching for keywords related to the products and services you offer, such as “Professional Services.” Refine your search by entering the name of the federal agency you wish to search. Press Return to generate relevant search results. Refer to the results for specific contract details and to obtain contact information for each contract’s Designated Contracting Officer. You can also search by NAICS code and group as shown in the image below. SAM.GOV allows you to search for opportunities and find opportunities by NAIC code, agencies and/or keywords. In addition to identifying contract managers, your research can also reveal: Which of your competitors have received work from your targeted organizations How much money are your potential clients spending on the products and services services you provide. Future Application Opportunities USAspending.gov is another valuable resource for researchers. It is an official source of government spending data – which explains how and where the government spends its money. You can track funding from transportation grants and federal agencies to local communities and businesses. Your Award Search and Profiles features allow you to easily find contract award data and unit spend. Other ways to target Sam.gov and usaspending.gov are excellent tools for identifying potential customers and developing your prospect list. But other ways to gather this information include research: Organizational websites – search posted organizational records to find contact information and department-specific information. LinkedIn – find key people working in the organizations you want to target. State Local and Education (SLED) – don’t overlook state, local and education agencies. These opportunities will help you get in the door of “government” – outside of private, commercial customers – so you can build expertise in the public space. Procurement Technical Assistance Centers (PTAC) – contact your local program for help identifying and matching organizations that are already purchasing your offerings. Online Markets – Identify online buying groups that will buy what you offer. According to a report by Censeo Consulting Group, government and small business buyers are turning to online business-to-business (B2B) marketplaces to improve the procurement process and lower barriers to entry for small businesses that request work in the federal space. Networking, business days, join relevant organizations – attend the same conferences and events as your prospects to expand your network and build your prospect list Small Business Liaison Officer (SB) or Specialist / SB Applicant or Office of Small and Nonprofit Business Practice (OSDBU) ) – contact OSDBU within the organizations you are targeting. They specialize in advocating and promoting business compliance, regulatory and environmental issues of small and socio-economically disadvantaged businesses. Organizations that did not meet their SB targets – targeting those organizations that did not meet their SB targets. They need to achieve SB goals and will want to increase the results on their scorecard. Conclusion To be successful with government contracts, you need to target and understand your ideal customer, their budget, and their buying habits. To do this effectively, identify your “best fit” groups by comparing them to your most loyal customers. Then research and identify the contract managers who are already buying what you are delivering within the target groups. Time spent on market research will ensure that you avoid the huge costs of finding agencies and opportunities outside of your sweet spot. The next article in this series will build on your market research and discuss how to develop relationships with your top five prospects as we explore the next “C” to success – communicating with customers . To start doing your own research and building your pipeline and forecast list, visit the following websites: https://www.acquisition.gov/procurement-forecasts https://www.usaspending .gov/ https://sam.gov/ content / home https://www.fpds.gov/fpdsng_cms/index.php/en/ (accessed 24 May 2022) Article references: Bradt, Judy. Government contracts made simpler. Middletown, DE: Summit Insight, 2019. Censeo Consulting Group. “Cracking the Government Procurement Code”. https://www.censeoconsulting.com/insight/cracking-the-government-procurement-code-new-study-details-barriers-small-businesses-face-selling-to-government-customers-and-how-online- markets-can-help/. March 20, 2020 “8 tips for finding government contract opportunities.” US Subcontractors. https://subcusa.com/8-tips-finding-government-contracting-opportunities/ . November 2017.
Lauren Mowbray is a Senior Proposal Consultant at KSI with 20 years of professional experience supporting small, medium and large businesses in the federal and non-profit contracting sectors. She has supported all aspects of the business development lifecycle, often filling multiple roles including proposal manager, coordinator, editor, and technical writer.
How To Start A Government Contracting Business
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