Not long ago I attended Victory in Procurement—an event put on by American Express OPEN to help small businesses learn about government contracting. This event at the Hyatt Regency in Chicago attracted well over 500 attendees by my quick headcount—there are a lot of small business owners out there eager to get into government contracting.
One of the highlights of the event for me was the welcoming remarks by Denise Pickett, Executive Vice President of OPEN. Many “Welcome” speeches are brief thank-you-for-coming messages that simply tell you about the day’s speakers. But Denise Pickett had some powerful words of advice about government contracting that can be summarized in 3 steps that I thought were worth sharing with you here. If you’ve wondered about government contracting, here are some powerful yet simple pieces of wisdom:
1. Start Small
Get your foot in the door… that’s the starting step. Then build on your early successes.
“Many successful contractors get their foot in the door by simply bidding on smaller contracts. Others begin by subcontracting to larger companies already working for the government,” said Pickett.
She went on to highlight Theresa Daytner, an Amex OPEN cardmember, who chose the avenue of “business teaming” (partnering with other businesses) to obtain government contracts. “By merging her expertise, infrastructure, and back-office support with direct competitors, her company became far more competitive than if she had bid individually.” Daytner grew her business from $1.4 Million in revenues in construction management services, to $6 Million in 2009 by expanding into general contracting and pursuing government contracts.
2. Invest in Your Success
Government buyers differ in significant ways from private sector customers. But in one respect they are the same: you have to invest in marketing and relationship-building and other efforts to cultivate business. If you have zero experience with government contracting, you might be tempted to think that getting government contracts is a simple bidding process—that you go somewhere, find a list of contracts, submit your contact information with the price you want to charge—and voila, you’ll get a customer!
Nothing could be further from reality. It’s not an automatic process. Just like with getting any customer, as a small business owner you have to work at it. You must do market research to find out which government agencies have a need for your products or services, and anticipate when contracts will be opening up for bid. You have to cultivate relationships with key people in those agencies to understand their needs. And you must know the terrain, the agency’s mission, who the other players are, and exactly what the requirements will be for the job.
As Denise Pickett pointed out, “On average, active government contractors invest close to $90,000 annually to cultivate business with the Federal government.” Based on American Express OPEN’s research, the government contractors who do this generate between $400,000 and $2 Million in sales
3. Be persistent
The final piece of advice she had was about sticking with it. This is the same, actually, as advice I would give for growing a business serving private sector customers: you have to stick with it to achieve success. Overnight successes in the world of small business are rare.
When you look at a successful business, it often seems like the business roared in out of nowhere, and was immediately successful. Yet if you look behind the scenes you almost always find that there were several years of hard work before success kicked in, in a big way.
Pickett echoed those ideas, saying, “It takes an average of two years to land your first Federal contract.” But the hard work doesn’t stop after the first few years. “On average, they submit seven Federal prime contracting bids to win three contracts per year.”
Her words left a powerful impression in my mind that I will sum up in one word of my own: commitment. Like anything else in business, you must be committed to whatever business and customers you choose to pursue. Less than full commitment just is a waste of your time and resources, and likely will yield mediocre or poor results. So if you want to be successful with government contracts, figure out what it takes and stick with it until you achieve your goals.
OPEN has an entire section of resources for government contracting help. And if you get a chance in the future to attend one of these Victory in Procurement events in your city, do take advantage of it.