Small Business Questions & Answers


Filed under Running Your Business

Ask About Selling to the Government

by Looking to Grow | May 24, 2012

Subject :Government Contracting

Dear Toolkit,

My one-year-old business is located near a military base and a federal prison. How can I get these two major local industries to be my customers?

Looking to Grow

Dear Looking,

Marketing to Club Fed and the Department of Defense is a great strategy for growing your young enterprise and it's not as hard to do as it may seem.

In an effort to help our small business readers learn more about the mysteries of doing business with the federal government, the Toolkit visited with Pam See, former Director of the Procurement Technical Assistance Center (PTAC) in Lake County, Illinois. PTACs help guide small businesses through the government red tape so common in federal contracting. Here's a replay of that interview:

Toolkit: Since many of our readers would like to have the federal government as a customer, can you give them some tips to get them started down this complicated but lucrative road?

Pam: Well the first thing on my list would be market research. Take the time to learn the various divisions of government such as the difference between military, civilian, federal, and local agencies. Call the various agencies and ask lots of questions. Understand the various job titles and learn who the decision makers are and how the government procurement cycle works. Ask questions, questions, and more questions. By the time you've talked to your fifth agency, you'll know all the questions you should have asked the first four.

Toolkit: Sounds like good advice. What's the next step?

Pam: Target marketing - rather than attempting to sell everything to everyone, concentrate your efforts on a small number of agencies most likely to produce profitable sales. Understand your own company capabilities and strengths — know what you do best and are most competitive in — and focus on those areas.

Toolkit: And is this where you turn to the site to learn about who's soliciting bids?

Pam: is a good source but for small business it's not nearly as effective as plain old proactive marketing. Many companies simply look for current published bids and "chase" them. To be more successful, a company should build relationships — just like commercial sales! Not merely reacting to advertised bids. Personal contact counts. Make personal sales calls when possible. Always at least call agencies you are interested in selling to (instead of only sending in forms).

Toolkit: How about marketing materials?

Pam: Good marketing materials are critical — well written, professionally printed brochures and other pieces that government buyers can refer to can create a lasting, favorable impression of your company. Think about it — how do buyers form an image of your company anyway? If you are attempting to make your first sale, all they have to differentiate your company from the hundreds of others that approach them is your appearance, verbal communications, and marketing materials. For another example, let's say you are a small business with 15 employees — impressive marketing materials can create a Fortune 500 image.

Toolkit: What if nothing happens? You've made personal contact, submitted your first class identity pieces, catalogs, whatever — and the silence is deafening.

Pam: Follow up! Sometimes the best opportunities in government sales occur when a key person remembers who you are when a procurement opportunity comes up. Catalogs, brochures, postcards, phone calls, etc., all will help keep your company name in front of the buyers. And when you do get chance to bid, read those bid documents thoroughly.

Toolkit: What's the biggest problem most of your small business clients run into after bidding successfully with a federal agency?

Pam: Having the financial strength to be able to wait for payment. Your industry standards won't apply. For example, even though it may be common in your industry to receive 50% up front, it is almost impossible to receive pre-payment from a government entity. Having the ability to accept payment via Visa will speed up some payments, but the decision to pay with a credit card is up to the agency, not the business.

Toolkit: How long can a small business expect it will take to finally get Uncle Sam as a regular customer?

Pam: Persistence and patience do count! It can take 6 months, 9 months, or more than a year to achieve your first successful government sale. Of course there are exceptions to every rule, and your results will vary depending upon your industry...but if you choose to be involved in government sales, be involved for the long haul.

Toolkit: Any last words of wisdom for our readers?

Pam: Last but definitely not least — providing the specified product with on-time delivery. The best marketing in the world won't help you if you don't live up to the terms of the contract or otherwise become known as a "problem" vendor.

Toolkit: Thank you, Pam, for sharing your expertise with our small business owners.

So there you have some simple and sensible advice from a Procurement Pro, which should help launch you on your way to a successful business relationship with the federal government.