3 Keys to a Winning Business Strategy
I have had the pleasure of working with many companies trying to break into the federal market space. I love working with these entrepreneurs because they are filled with dreams, seeing great possibilities of winning federal contracts and grants. While their optimism is infective, at times it can be hard to make their dreams a reality because they are not based on pragmatic reality.
The federal government represents the largest marketplace in the world buying just about every product and service you can imagine. The possibilities for an entrepreneur are endless. Unfortunately for newcomers, the government prefers vendors with a track record and not new ones and almost any federal market segment has someone occupying it that has that work history. To beat out those incumbents the newcomer needs to understand clearly their value to buyers and how they are different from the other options. They need a strategy to take to the market. These three questions are critical to developing that strategy.
· What do you sell?
· Who wants to buy it?
· Why do they want to buy it from you?
The answers to these three questions are the foundation of a business plan and marketing strategy. Until you can answer all three of these questions succinctly and clearly, I advise my clients to refrain from investing in their federal practice. Yes, that is right. Before you launch your website, before you invest in your company infrastructure, perhaps even before you give a name to your company, you should answer these questions.
Certainly, there are those who choose to dive in first and figure it out as you go, but in my experience this path will take more time (and money) than if you think things through first.
Why is this important to figure it out? Because when you know the answer to these three questions, you will know how to
1. Focus your energy and resources on what is important and what will have results. No company has infinite business development resources. I usually work with the owner or senior leadership of a small enterprise and they have a full-time job running the business. Sometimes they are directly involved with delivery or even work as an employee for another company. For the most part, working on this new federal concern is something do after their regular 40-hour work week. If they don’t have that full time job, then their runway is even shorter because they must establish a revenue stream quickly to pay themselves and keep the company afloat. They don’t have the luxury of trying out pathways that have a low probability of success.
Unfortunately, some will react to this urgency by finding RFPs to respond to (usually on SAM) so they can get a contract. This may seem like the fastest way to establish a business, but in fact without a well thought out strategy, the new business is doomed to produce a bunch of losing proposals and the entrepreneur’s frustration level will rise with every passing month of zero revenue.
2. Have something succinct and compelling to talk about. The most important part of federal contracting is networking. A mentor and the former owner of a highly successful federal contracting concern liked to advise his mentees “your net worth is directly related to your network.” Every single federal contractor in the business must constantly be looking for new teaming partners and client contacts to increase their knowledge of the market space and the ways to respond to a client’s need. From Lockheed Martin to the newest entry to the contracting everyone needs teaming partners to access vehicles, to provide a comprehensive service offering, to provide competitive pricing, to meet set-aside requirements. A successful business owner must learn to love meeting and talking to people to find new ways to team and respond to an opportunity. These conversations are much more productive and efficient if you have a clear and concise description of your company’s value. And that comes from answering the three questions.
3. Motivate your team (including yourself) by being clear about what you do and do not do. New companies tend to be expansive in thinking about what they can do. I get it. When I worked in a federal contractor, if an existing client came to me and asked if I could do something, the answer was always yes. Yes, I will figure out how to get someone on the team to make that happen. Usually, I was able to do just that. But this is completely different from winning a competitive federal contract or convincing a larger prime contractor to include you on their team. You must prove to them you can do it with very relevant past performance, highly qualified (and right-priced) staff and a compelling technical narrative.
Some clients I work with look at an RFP and say, we can totally do this! Sure, you can but can you do it better than everyone else that will be bidding on this —with better being defined as the client defines it and not you. The newcomer bids on anything they can figure out, rather than bidding on those that are a match for what they do best. If you run up against this too many times the BD team gets worn out chasing low probability opportunities. The team (and the owner) gets discouraged, and they decide this federal contracting stuff is not for us.
Over the next few months, I will publish a blog post on each of these three key aspects of your marketing plan. I trust that this series will save you from a bunch of heartache and disappointment. While heartache and disappointment come with any new venture, I have seen that companies get to their goals faster if they have done the homework to answer these three questions.
As a reminder: what do you sell?, who wants to buy it?, and why do they want to buy it from you?
Adelante. Let’s go!