Is it time to ENTER the Government Market?

Commercial Firms looking to Enter the Government Market?

Are you kidding me?  Nope, surprisingly some have mentioned this as an option; even though there’s limited money, long sales cycles and a completely different process some commercially focused companies are looking to enter the government market.  After I pick myself up off the floor from laughing so hard I find that some are just chasing the idea of the big contract while others see this slowdown in spending as an opportunity to be part of the next phase or the next boom with the recognition that its years away and won’t be like the boom of the last 10 years.  If you never enter you can’t win business so at some point if there’s a desire to close government deals you need to bite the bullet regardless of the current situation.  It might be better to enter the market when you don’t expect much – any win is a huge win.  This is the company that truly understands that entering this market is an investment.  You should expect a bare minimum of 2 years activity in this market before you close a deal – for some it’s shorter and others its longer but if you think you’ll close business in 6 months you’re either smoking something or you have THE MOST amazing  widget ever.

Here’s the deal, is it a great time to enter the government market if you have no experience?  Why not, look at the environment – even long term government players are struggling to close deals.  With re-competes, less business to be had, bid protests, reduced budgets, etc those that are there now have to do more with less and if they haven’t already they will soon be forced to deal with the new reality.  That reality is a little more challenging and can be highly lucrative IF and it’s a big IF you put in the effort.  The problem is that in the past it was fairly easy to get business, just respond to a RFP and go low – you’ll get millions of dollars worth of business – not the case anymore (except the low cost – that definitely helps).  So if there’s less coming down the pike, things are taking longer to come to fruition, there’s a litigious environment why would you want to enter this market?  It’s easy, get in now, create the relationships now and prep for when the situation improves and if you get a deal it’s just icing on the cake.  It’s better to lay the groundwork now when business isn’t flying off the shelf then to feel like you’re missing out by trying to jump in when it’s going gang busters.  Again recognize that all business development is an investment.

If the government space is a desired target market you have a choice –

  • Commit to the market, do your research
  • Understand that each agency works differently and identify which is best to pursue
  • Hire those with technical knowledge and connections to bridge the gap
  • Identify where you fit and why you fit – inside each agency there are multiple silos
  • Identify contract vehicles to pursue
  • Understand your commitment – a minimum of 3 years
  • Attend industry events, join industry groups that support the mission you’ve chosen to support
  • Build a pipeline with short, mid and long term opportunities
  • Manage the pipeline consistently

Or –

  • Sit around and wait for the right time
  • Get frustrated when you have to act happy for your buddy that just closed on a big contract
  • Constantly second guess yourself
  • Prepare and identify when the right time will be and commit to action

There is no perfect time so make sure you do your homework and plan for the future.  Create a strategy to enter the market and a timetable then execute.  Most importantly create relationships and be patient.

Why Government Contractors are failing in attempts to enter the commercial market

Government Contractors pursuing the Commercial Market in a sloppy manner

Contemplating a move into the commercial market?  Make sure you do it right, learn from these mistakes.  Sadly we’re seeing them over and over with wildly successful government contractors looking to counter the inevitable drop in government projects due to sequestration by entering the commercial market targeting large financials, pharma, healthcare, etc.  The issue is they just aren’t approaching the market correctly and here’s why –

Government contractors attempting to move into the commercial market expecting to have companies drop multi-million dollar projects in their laps due to their past government performance and attempting to manage the pipeline, presentation and proposal the same as they did with agency clients.  It’s not uncommon for these contractors to expect to have a thriving commercial practice within a year to 18 months and yet they are failing and can’t understand why.  Sadly the reason is arrogance.

Attempting to put an entire industry into your way of doing business and expecting them as your prospect to allow you to run the process as you see fit versus what works best for them is arrogant.  Expecting that your past performance in an environment that functions practically polar opposite of the commercial functionality of procurement and purchasing is arrogant.  Believing that you know how they work and what works best for them without due diligence and without analysis is arrogant.  Not accepting the trial programs the commercial prospects offer you to assess your capabilities because their too small and beneath you is arrogant.

Here’s the deal – the government market and the commercial market are two very different animals and if you don’t respect the nuances of business in both markets you will fail.  For the vast majority of businesses, you aren’t anything special; I know that’s hard to hear and it’s not meant as an insult.  There are hundreds if not thousands of companies who do what you do, really well and some are already in your desired target market winning and managing successful engagements.  You are the newbie and yet you act like you know it all.  The answer is to be humble, to understand you need to build trust the same as you did in the agencies so many years ago.  Be grateful when offered a pilot or trial program regardless of how small as it’s a win with that company and a chance to build performance in the new market.  Treat the market as it needs to be treated – it’s different than agencies – understand the process, respect the process and learn what’s important to each new buyer.  It’s best to have separate teams as it’s tough to transfer from one market to the other.  Most importantly expect a minimum of 3 years to gain consistent traction.  Treat this as an investment.  This market is a far cry from the market you entered in the government space 10 years ago, it’s not a free for all and you need to show your value and your expertise.  Arrogance will kill you in this market, if you plan to enter be strategic, be willing to learn, expect to fail and understand it’s an investment in amazing future growth – bring in experts who know the industry, who can talk the language and most importantly can bridge the gap that you’ve created by ignoring this market for so long.

Entering the market unprepared is like the business developer who claims his company’s people are smarter than those employed by the competition and their service is better.  You’ve done nothing to differentiate yourself and in fact you’ve told your prospect that you really don’t respect them.  I know it wasn’t your intention in face I’m sure it’s the exact opposite of your intention.  If you’re a software developer know why your clients use you and here’s a hint, it’s not service or smart people.  There are thousands of software developers in this country so what makes you special – is it the extensive knowledge of the industry you represent and the types of challenges you’ve been asked to tackle when others failed?  Is it how you hold your people accountable so jobs are finished on time and within budget?  Is it how you collaborate with the client to ensure ultimate business efficiency, effectiveness and results – results being the key here.  Maybe it’s that your practice is to proactively keep the client up to speed on the status of the project so you can address concerns in real time so as not to create unnecessary billable hours after the fact.  Do you think a prospect might find that appealing?

The fastest way to ensure you are viewed as a commodity and get into a cheapest price wins kind of deal is to associate yourself as the same as everyone else.  If you don’t know the answer to what makes you special this is your first task and I highly suggest you ask your current clients why they love you and if their answer is your price point – you have definite problems.  Before you enter a new market you need to know what is success to my new prospect, what makes them look like a hero so you can be their hero?  This is your business development angle, not that you’ve managed large successful programs for the feds because in the commercial market things get done faster, their systems are more up to date, they don’t look for butts in seats for an unlimited amount of time – this costs them shareholder value.  A company, nonprofit, hospital, regardless of size can’t just print money – you need to know what makes them tick before you enter the market.

We’d love to hear what you’ve done to differentiate yourself in the market and how it helped you to increase market share.

Business Development and the “New Normal”

Reduction of Full Time Business Development Staff (Government Contractors)

So many highly experienced and successful business developers have hit the street this past year – cut from long time employers over money, a perception that Business Development is overhead.  Yes Business Development can become overhead if not managed correctly.  Ultimately BD even in a tough market should be about lead generation, target research, needs analysis, moving the prospect through the pipeline to pre-close and ultimately proposal and closing.  Yes things are taking longer and yes, some government agencies have no money to spend right now but is cutting BD an effective tool right now?  The answer is…it depends.

Do you have a unique solution or a solution that we know is needed right now and can we go after year end money or upcoming projects?  Do you solve a pressing issue; do you eliminate butts in seats?  Are you a sub or a prime?  A number of questions need to be answered to know for sure what the correct answer is but in the end there’s really only one question to answer and for that you’ll need to read the entire blog!

Each agency is different as you well know; they have different budgets and different needs.  Efficiency is king right now so if you’re selling bodies business development can definitely be tough however it’s not impossible.  Being a sub is a challenge right now as large primes are removing subs from contracts to keep the seats for their own people.  Here’s what we know right now – the cuts are real, we have no agreed upon budget and haven’t for years and quite frankly no one really knows what’s going to happen.  Budget constraints are here to stay so I hate to put it like this but you simply need to get over it.  We’ve seen some amazing talent let go this past year and eventually, typically after 6 months of searching they find a new position at a lower salary, one that more accurately reflects today’s environment of lowest cost technically acceptable.  Be proactive – talk with your employees about the situation at hand – it’s not a surprise to anyone.  There is a choice – allow top talent to leave or work to restructure compensation so it fits the new normal.

Full time business development leaving companies is definitely an opportunity for us at Springboard however we feel that if business development isn’t taken seriously it’s not really an opportunity for anyone.  Some companies need full time BD at a high level while others can grow dramatically with outsourced support – it just depends on what fits.  While we tend to be 1/3-1/2 the cost of full time BD help we aren’t always the right fit, sometimes full time is needed – especially with very large firms.

Government Contractors – is NOW the time to cut Business Development?

Government Contractors – should we cut BD now?

Based in Maryland and let’s face it many of our clients either are government contractors or sell to government contractors; sequestration and budgetary concerns are real and we’ve seen a pullback in investment in business development, whether in house or outsourced.  I get it, it can be a scary time to make investments and commit to dollars you aren’t 100% sure will come back in a reasonable time but here’s why your competition is putting more money into BD right now:

  • Fiscal year end is right around the corner and if you aren’t positioning now to get money it may be too late
  • Your competitors BD staff is still meeting with decision makers and you’re not because you no longer have someone focused on BD – they know what’s coming down the pike, what most likely will be funded and what the focus for year-end money will be…do you?
  • Your competition understands BD – it’s an investment in future business and based on the market and fiscal capabilities determines when these deals close but if no one is moving those deals forward or identifying new deals they will never close and revenue is bound to drop.  We’ve seen $30 M contractors who haven’t closed a deal in years because they simply respond to RFP’s once they hit the street, this used to be an effective strategy but it’s no longer viable if you want to grow or even maintain as re-competes and protests are shrinking your existing business.
  • Small business right now in the government market should be thriving.  I’ve seen a number of small businesses winning large new projects, adding people to existing contracts and growing at a time when the big boys are tightening their belts.  What differentiates these companies – a massive focus on business development.  They’ve made the investment in one of two ways:
    • Infrastructure – CFO/COO so the CEO can focus on BD
    • Hiring full time business development at a high level
    • Engaging BD on an outsourced basis which we highly recommend by the way
    • Those that are winning aren’t just collecting contract vehicles, they are diving deep.  Having a contract vehicle is simply a hunting license, there is no guarantee one penny will come your way.  Your BD efforts need to be focused on winning task orders in those customers who’ve recognized you as a winner already.  Dive deep and stop the surface wins.  If you have a laundry list of contract vehicles but only $10M in revenue you are not taking advantage of the amazing opportunities you have.
    • Finally just because you fulfill a set aside doesn’t mean you’ll get business.  I get it, you spent a lot of time and effort to get those set asides lined up but again you’re still a dime a dozen.  That doesn’t always sit well with some people but you have to understand there are thousands of companies that fill set asides – if you can’t differentiate yourself it all was a waste of time.  You still have a job to do – reply to sources sought, market yourself as an excellent provider with a set aside being a bonus, meeting with decision makers, meeting with teaming partners.  Again these set asides are simply hunting licenses, you still need a focus on business development to see the benefits of the effort.  The 8A’s, woman owned, HUBZone, veteran owned firms who have invested in business development and infrastructure are thriving, they are go-to partners for teaming and are winning full and open (before they graduate from the 8A program).  They understand that from the day they earn that certification they need to plan for the day they don’t need to use it.  If you’re solely gaining business because of you fill a set aside and no other reason you are set up to fail in the long run.

Sequestration will cause a shake-up in the contractor marketplace, you’ll see some fail and you’ll see others grow.  You have a choice – to believe in the inevitable doom of the marketplace, withdraw and ultimately shrink slowly and painfully or seize the opportunity.  Those that grow see sequestration as a huge opportunity and invest to ensure that opportunity isn’t lost.  It’s your choice.

 

If you think outsourcing BD efforts might be an option let us know.  Our consultants have a minimum of 20 years experience in the agencies in which they work, they are well respected, consistently close business and we’re roughly 30-60% of the cost of hiring full time.  Email Karin if you’d like more information at kschwartz@springboardbizdev.com

FAQ’s What if I need help with strategy?

Answering your questions, have one – email me directly at kschwartz@springboardbizdev.com

Do you help with strategy?

Yes, I can’t tell you how many times I’ve been called in to simply strategize.  Essentially these are companies who have sales staff who are looking for new, fresh ideas to move sales forward.  I love this part of our work and I do it personally.  There is nothing I enjoy more than figuring out the puzzle piece.  I can see opportunity where you can’t, I can help you get there without doing it for you.  This works exceptionally well with sole proprietors or small sales teams.  We focus on overall strategy, target markets, how and where to find decision makers, what influences them, your unique capabilities, why people buy from you, your process, your presentation, your competition, your strategic partner, etc.  Most importantly we focus on what’s holding you back.  I’m not a coach by any means but I do know sales and I find with most business owners sales is an afterthought .  If you need a business coach I know great ones and will be happy to make a referral.

The initial month of sales strategy and consulting is a full scale evaluation of the entire sales process and it’s a minimum of $2500, each following month is a minimum of $1000.  If you think this is a better fit call the office and ask for Karin at 410-832-7560