How to Get Started As A Government Contractor
Becoming a contractor or sub-contractor for the U.S. government can bring in lucrative, ongoing revenue to your small business. But doing business with the government is very different than typical business-to-business selling.
Becoming a contractor or sub-contractor for the U.S. government can bring in lucrative, ongoing revenue to your small business. But doing business with the government is very different than typical business-to-business selling. Sales cycles are often much slower. There is a process that must be followed, and you'll face stiff competition from larger companies with more experience. In fact, the process can seem overwhelming, especially if you're just starting out, and you need to be prepared to spend a lot of time and effort before you start bringing in large contracts.
So how do you get your foot in the door, start bringing in money now and cut down on your learning curve? Start by selling locally. Municipal agencies in your city, town or county government, such as water and sewer commissions, parking bureaus or even boards of education—regularly do business with small, local companies.
How to Get Started as a Government Contractor:
1. Who is your ideal client?
Make a list of your local government agencies. Which ones might be interested in your product or services? Target the top two or three agencies that you think will be the most likely to need your products or services. Don't try to be all things to all people.
2. Find out what their needs are.
Go to your local library and read the newspaper archives. Attend a couple of city council meetings. What are the issues they are faced with? What actions are they taking? How can your products or services help them to solve their problems? Knowing what their problems are and having an instant solution can go a long ways in getting you the contract.
3. Find out who you need to see.
Find out who is responsible for creating the Request for Proposals (RFPs) for the agency. Who is in charge of purchasing? How do they prefer to be contacted? Get as much information as you can about the process as well.
4. Determine your price.
Remember that local agencies are usually required to get three bids and take the lowest one, so they can show that they're not wasting taxpayer's money. But, before you lowball yourself into losing money on the deal, carefully look at each aspect of your bid. Make sure that you can live with the amount you bid, because once accepted, it's very difficult to make changes later.
5. Create a marketing strategy.
Figure out your "who" "what" "when" and "how." Set up face-to-face meetings when possible. Bring information such as brochures and catalogs with you. Because government agencies base most of their purchasing decisions on short-term expenditures, not long-term value, you may need to adjust your sales strategy accordingly.
6. Make Contact.
When you make the initial phone call, use the knowledge you've already collected about the agency to get an appointment. You also want to know what is their process for making purchases. Do they have registration requirements? What are they? What information do they need before they make a decision?
7. First Meeting
Your objective here is to listen to your prospective client. What does she/he think are their most immediate problems and pressing needs? (From the research you've done, you should already have a general idea of what they're looking for, and what their needs are. Now is your opportunity to get the "inside scoop.") Ask intelligent questions, and give basic information about your company, your abilities and your products or services. Just remember—this meeting isn't about You, it's about them! Make sure you ask any questions you've still got about the application process, and what you need to do in order to put in a bid. Leave the information with your prospective client, and tell them what you will do next. If you set a time to follow up, do it. If not, you're going to follow up anyway, but more about that in a minute.
After the meeting, put together a plan of action. Create at least three solutions to your prospective client's problems, but make it something unique that can only be done by your company. If you sell a product, perhaps you could provide a free training workshop, to get users up to speed more quickly and efficiently. If you provide a service, offer an additional incentive, or extra component that either solves another problem or provides added value and benefit to the client. Then get it to the person you saw. For example, you could send a simple letter…"Dear Fred, Thanks for meeting with me last Friday. After we talked, I started thinking about what you said about …, and came up with …" Don't be afraid of giving him your best ideas. You want him/her to understand that you can solve his problems. You don't need to go into details about "how" you'll accomplish it. Just let him know that you can. Make sure that you follow the application process completely, and turn it in before the deadline.
9. Network, network, network.
Don't stop now. Who else do you know who can help champion your cause? Who is your local city council person? Other elected representatives? You don't have to be a major contributor to ask your representative for assistance. Most politicians are more than happy to help local businesses succeed. Getting the word out about who you are and what you can do is just good business. Talk to your local chamber of commerce, SCORE or small business development center (SBDC) office.
10. Be professional.
Above all else, you want to project an attitude of competence and professionalism. Go the extra mile. Make sure that your client is more than satisfied by doing business with you. And once you've got one government client, it will be easier to convince other agencies to do business with you.