Claim Your Piece of the Government's Pie

Aug 21, 2008

Source: www.smallbusiness.nielsen.com


With patience and persistence, your company can turn the federal government into a well-paying client. Here's your comprehensive small business guide to doing big business with the powers that be.

By: MATT ALDERTON

Like most people, Brian Olson had a few preconceived notions about the U.S. government. The government he knew was incredibly big, impossibly bureaucratic and instinctively complicated.

Olson's impressions changed several years ago, however, when his company, Lakewood, Colo.-based Video Professor Inc., got a call from the White House. A staffer there had seen company founder John W. Scherer on cable television peddling his company's instructional computer learning software and wanted to place an order. There was one problem, though: Video Professor wasn't listed as a government-approved vendor.

"We didn't have a contracting agreement with the government," says Olson, who at the time was the company's director of marketing communications. Now its vice president of public affairs, he says he was put in charge of finding out exactly what it would take to get such an agreement.

"My first shock was when I found the appropriate applications for our business," Olson recalls. "I downloaded them and hit print; the agreement was 90 pages long. After that, I said, 'Well, maybe not.'"

After his initial hesitation, though, Olson discovered what many businesses before and since have learned: That even the most overwhelming exercises are achievable. "You can't be intimidated by the process," Olson says. "You just have to work your way methodically and patiently through it."

Indeed, working with government requires plenty of endurance, not to mention impeccable attention to detail. But for small businesses that can persist through the process, the race generally proves itself worth running, for beyond the finish line lies an untapped market of consistent customers and promising profits.

Why Government?

For many companies, the government is a dream client, according to Joe Kuklis, co-founder of Washington, D.C.-based GSP Consulting, which counsels small businesses on the procurement of government contracts.

The reasons are many, he suggests. First of all, government money is always non-dilutive; in other words, it comes without strings attached to it. "If you were to win a government contract, you would never have to worry about the government becoming an investor, or about its money having hooks to it," Kuklis says. "Your investors will love that, your venture capitalists might love it and you as a CEO are going to learn to love it because you know that money is coming to you, and that it doesn't take away from your ownership position."

Another good reason to do business with the government, according to Kuklis: Its checks never bounce. "Those dollars might take a few extra weeks before they hit your pocketbook," he says, "but you can count on those checks being there."

Of course, government checks aren't just reliable, Olson points out. They're also frequent. "If you do a good job, the government tends to be a regular and good customer," he says.

What's more, it's probably a customer that your competition doesn't have. "Government contracts give you the chance to expand to an area of business that you didn't have before, and that your competitors probably don't have—because they were intimidated by the process and you weren't."

It's important to note that government contracts aren't just for large defense firms and missile manufacturers, either. "The government buys everything from paperclips to backhoes," Kuklis says. "If the public is buying it, the government is buying it, too. Why would you ignore that marketplace?"

Getting Started

When Olson started what turned out to be an eight-month government-approval process, the first place he turned to for advice was the U.S. Small Business Administration (SBA), which offers a series of services, tools and programs designed to help small companies navigate the federal procurement process.

"The first thing they did was put me in contact with local small business owners who gave me some initial tips about the process," Olson says. Those business owners told him not to feel intimidated or overwhelmed, and to focus instead on being patient, persistent and precise.

Next, Olson recommends contacting the U.S. General Services Administration (GSA). Next to the SBA, it's the best place to start, he says.

Kuklis agrees. "For the most part," he says, "if you want to become a vendor to the government you should become GSA scheduled so that people on the inside of a department or agency are aware that you exist, they know what products or services you sell and they know how to contact you in the event that they need you."

Getting scheduled—or approved—by the GSA is a long and involved process. Completing it, however, is the easiest way to get the green light for doing business with government-run offices and agencies, as receiving a contract from the GSA puts your company on a list that many government employees consult when they're looking to purchase goods and services. "When you get on that list, you're one of many, but at least you're in the game," Kuklis says. "It gives you a sort of hunting license to go out and find government opportunities."

In addition to working with the GSA, the SBA recommends the following action steps in order to prepare yourself for government prospecting:

Get SBA certified. While not required in order to get government contracts, getting SBA-certified as a small or disadvantaged business gains you access to special bidding benefits within the federal government.Obtain a DUNS number. Businesses working with the government will need a "DUNS Number" from Dun & Bradstreet, which functions as an identification number.Get registered in the CCR database. The government's Central Contractor Registration system holds information about procurement and financial transactions; in order to be awarded a federal contract, businesses must be registered in the system.Classify your products and services. Because many government agencies use them, you should familiarize yourself with the Federal Supply Classification Code (FSC) and the North American Industry Classification System (NAICS) Code for your business.
Once you've done your homework, you can begin to do the legwork. To browse federal procurement opportunities, start online at FedBizOpps, Kuklis suggests. There, you can find notices of proposed government procurement actions, contract awards, sales of government property and other up-to-the-minute procurement information.

A Different Approach

While the standard way of starting out in the government realm is with the GSA, more assertive business owners can take a different approach, according to Kuklis. Rather than getting on a list and waiting for government agencies to find them, sales-focused companies can solicit government prospects directly.

"If you want to be more aggressive, you can go and create contract opportunities for yourself just by going through the traditional business and sales practices that you would use to sell to anyone else," Kuklis says. "In order to do that, you've got to identify the right government markets for your product or service. Once you've done that, the sell becomes, 'Does this save lives? Does this save taxpayer money? Does this provide for the common defense and promote the general welfare?' If it does, it's incumbent upon them to make sure they're purchasing from you."

Don't just chase government sales leads, either. If you want to pursue government business, Kuklis also recommends approaching federal prime contractors—you can find a list courtesy of the SBA—who are often put in charge of large government projects, which they'll generally hire subcontractors to execute for them.

How to Win the Game

It may sound tough, but working with the government is just like working with any other client, according to Jeswald Salacuse, author of Seven Secrets for Negotiating with Governments. If you can negotiate your way into contracts with other private businesses, he insists, you can negotiate your way into contracts with the government.

"Governments spend a lot of money every year acquiring goods and services, and those contracts can be very lucrative to the businesses concerned," Salacuse says. "Of course, one of the challenges to those businesses is that governments have to follow rules and procedures; they're very formal."

Complying with government rules can be frustrating, but it's not futile. If you think you're ready to tread your way through government waters, consider Salacuse's tips for successful execution:

Get to know people. It's important to familiarize yourself with government procedures, but it's equally important to familiarize yourself with government people. "Often, just by going in and talking to people you can get an idea of what the best way of presenting your proposal is," Salacuse says.Be persuasive. While the government has many criteria that it considers in choosing its vendors, there are always opportunities to sell yourself. "Your challenge as a small business owner is to find ways of persuading them that you are the best person to do business with," Salacuse says. In particular, be willing to exploit your disadvantages, as the government has set-aside programs designed to reserve a certain amount of business for minority-, woman- and veteran-owned businesses.Understand the client. Like any business, the government has interests. In order to win business with it, Salacuse suggests, pay attention to federal goals, including safety, cost-effectiveness and efficiency.Embrace the past. Governments don't like change, according to Salacuse. "There's an old saying in government bureaucracy," he says. "'Never do anything for the first time.' Try to find a precedent for what you're trying to sell."Be prepared for bureaucracy. When spent, public money is subject to public scrutiny. If you want government dollars, be prepared to justify, record and report the ways in which you spend it.
If you still need an extra boost in order to win yourself some government clients, Kuklis suggests calling on your elected officials as pinch hitters.

"Going to your Congressperson or Senator and asking him or her or their office to help you make introductions at a department or agency, or to write a letter of support for a bid that you're putting in, only increases your chances of winning," he concludes. "If an elected official can help you score a contract that's worth $1 million to your company, and you're going to add jobs or retain jobs in his or her district, that's a great press opportunity for them. Frankly, it's one of the reasons we pay them as elected officials."

Claim Your Piece of the Government's Pie

Aug 21, 2008


Source: www.smallbusiness.nielsen.com

With patience and persistence, your company can turn the federal government into a well-paying client. Here's your comprehensive small business guide to doing big business with the powers that be.

By: MATT ALDERTON

Like most people, Brian Olson had a few preconceived notions about the U.S. government. The government he knew was incredibly big, impossibly bureaucratic and instinctively complicated.

Olson's impressions changed several years ago, however, when his company, Lakewood, Colo.-based Video Professor Inc., got a call from the White House. A staffer there had seen company founder John W. Scherer on cable television peddling his company's instructional computer learning software and wanted to place an order. There was one problem, though: Video Professor wasn't listed as a government-approved vendor.

"We didn't have a contracting agreement with the government," says Olson, who at the time was the company's director of marketing communications. Now its vice president of public affairs, he says he was put in charge of finding out exactly what it would take to get such an agreement.

"My first shock was when I found the appropriate applications for our business," Olson recalls. "I downloaded them and hit print; the agreement was 90 pages long. After that, I said, 'Well, maybe not.'"

After his initial hesitation, though, Olson discovered what many businesses before and since have learned: That even the most overwhelming exercises are achievable. "You can't be intimidated by the process," Olson says. "You just have to work your way methodically and patiently through it."

Indeed, working with government requires plenty of endurance, not to mention impeccable attention to detail. But for small businesses that can persist through the process, the race generally proves itself worth running, for beyond the finish line lies an untapped market of consistent customers and promising profits.

Why Government?

For many companies, the government is a dream client, according to Joe Kuklis, co-founder of Washington, D.C.-based GSP Consulting, which counsels small businesses on the procurement of government contracts.

The reasons are many, he suggests. First of all, government money is always non-dilutive; in other words, it comes without strings attached to it. "If you were to win a government contract, you would never have to worry about the government becoming an investor, or about its money having hooks to it," Kuklis says. "Your investors will love that, your venture capitalists might love it and you as a CEO are going to learn to love it because you know that money is coming to you, and that it doesn't take away from your ownership position."

Another good reason to do business with the government, according to Kuklis: Its checks never bounce. "Those dollars might take a few extra weeks before they hit your pocketbook," he says, "but you can count on those checks being there."

Of course, government checks aren't just reliable, Olson points out. They're also frequent. "If you do a good job, the government tends to be a regular and good customer," he says.

What's more, it's probably a customer that your competition doesn't have. "Government contracts give you the chance to expand to an area of business that you didn't have before, and that your competitors probably don't have—because they were intimidated by the process and you weren't."

It's important to note that government contracts aren't just for large defense firms and missile manufacturers, either. "The government buys everything from paperclips to backhoes," Kuklis says. "If the public is buying it, the government is buying it, too. Why would you ignore that marketplace?"

Getting Started

When Olson started what turned out to be an eight-month government-approval process, the first place he turned to for advice was the U.S. Small Business Administration (SBA), which offers a series of services, tools and programs designed to help small companies navigate the federal procurement process.

"The first thing they did was put me in contact with local small business owners who gave me some initial tips about the process," Olson says. Those business owners told him not to feel intimidated or overwhelmed, and to focus instead on being patient, persistent and precise.

Next, Olson recommends contacting the U.S. General Services Administration (GSA). Next to the SBA, it's the best place to start, he says.

Kuklis agrees. "For the most part," he says, "if you want to become a vendor to the government you should become GSA scheduled so that people on the inside of a department or agency are aware that you exist, they know what products or services you sell and they know how to contact you in the event that they need you."

Getting scheduled—or approved—by the GSA is a long and involved process. Completing it, however, is the easiest way to get the green light for doing business with government-run offices and agencies, as receiving a contract from the GSA puts your company on a list that many government employees consult when they're looking to purchase goods and services. "When you get on that list, you're one of many, but at least you're in the game," Kuklis says. "It gives you a sort of hunting license to go out and find government opportunities."

In addition to working with the GSA, the SBA recommends the following action steps in order to prepare yourself for government prospecting:

Get SBA certified. While not required in order to get government contracts, getting SBA-certified as a small or disadvantaged business gains you access to special bidding benefits within the federal government.Obtain a DUNS number. Businesses working with the government will need a "DUNS Number" from Dun & Bradstreet, which functions as an identification number.Get registered in the CCR database. The government's Central Contractor Registration system holds information about procurement and financial transactions; in order to be awarded a federal contract, businesses must be registered in the system.Classify your products and services. Because many government agencies use them, you should familiarize yourself with the Federal Supply Classification Code (FSC) and the North American Industry Classification System (NAICS) Code for your business.
Once you've done your homework, you can begin to do the legwork. To browse federal procurement opportunities, start online at FedBizOpps, Kuklis suggests. There, you can find notices of proposed government procurement actions, contract awards, sales of government property and other up-to-the-minute procurement information.

A Different Approach

While the standard way of starting out in the government realm is with the GSA, more assertive business owners can take a different approach, according to Kuklis. Rather than getting on a list and waiting for government agencies to find them, sales-focused companies can solicit government prospects directly.

"If you want to be more aggressive, you can go and create contract opportunities for yourself just by going through the traditional business and sales practices that you would use to sell to anyone else," Kuklis says. "In order to do that, you've got to identify the right government markets for your product or service. Once you've done that, the sell becomes, 'Does this save lives? Does this save taxpayer money? Does this provide for the common defense and promote the general welfare?' If it does, it's incumbent upon them to make sure they're purchasing from you."

Don't just chase government sales leads, either. If you want to pursue government business, Kuklis also recommends approaching federal prime contractors—you can find a list courtesy of the SBA—who are often put in charge of large government projects, which they'll generally hire subcontractors to execute for them.

How to Win the Game

It may sound tough, but working with the government is just like working with any other client, according to Jeswald Salacuse, author of Seven Secrets for Negotiating with Governments. If you can negotiate your way into contracts with other private businesses, he insists, you can negotiate your way into contracts with the government.

"Governments spend a lot of money every year acquiring goods and services, and those contracts can be very lucrative to the businesses concerned," Salacuse says. "Of course, one of the challenges to those businesses is that governments have to follow rules and procedures; they're very formal."

Complying with government rules can be frustrating, but it's not futile. If you think you're ready to tread your way through government waters, consider Salacuse's tips for successful execution:

Get to know people. It's important to familiarize yourself with government procedures, but it's equally important to familiarize yourself with government people. "Often, just by going in and talking to people you can get an idea of what the best way of presenting your proposal is," Salacuse says.Be persuasive. While the government has many criteria that it considers in choosing its vendors, there are always opportunities to sell yourself. "Your challenge as a small business owner is to find ways of persuading them that you are the best person to do business with," Salacuse says. In particular, be willing to exploit your disadvantages, as the government has set-aside programs designed to reserve a certain amount of business for minority-, woman- and veteran-owned businesses.Understand the client. Like any business, the government has interests. In order to win business with it, Salacuse suggests, pay attention to federal goals, including safety, cost-effectiveness and efficiency.Embrace the past. Governments don't like change, according to Salacuse. "There's an old saying in government bureaucracy," he says. "'Never do anything for the first time.' Try to find a precedent for what you're trying to sell."Be prepared for bureaucracy. When spent, public money is subject to public scrutiny. If you want government dollars, be prepared to justify, record and report the ways in which you spend it.
If you still need an extra boost in order to win yourself some government clients, Kuklis suggests calling on your elected officials as pinch hitters.

"Going to your Congressperson or Senator and asking him or her or their office to help you make introductions at a department or agency, or to write a letter of support for a bid that you're putting in, only increases your chances of winning," he concludes. "If an elected official can help you score a contract that's worth $1 million to your company, and you're going to add jobs or retain jobs in his or her district, that's a great press opportunity for them. Frankly, it's one of the reasons we pay them as elected officials."