Economic Diversification: A Definite Egg in Your Basket!

Sponsored Content Bold Concepts

Economic Diversification is important when considering sources of revenue streams for Tribal entities. One of the better sources is the federal government. Federal 8(a) Small Business construction can provide millions of dollars in revenue to help finance long- and short-term goals for the Native community; but, without a solid business plan, it can be difficult to achieve.

Not every federal agency or geographic market is cut from the same cloth. When you’re deciding which contracting opportunities your 8(a) construction firm should target, it takes a lot of upfront legwork to know where your efforts will be best invested. That’s why it’s important to have an intuitive business plan before you go knocking on agency doors.

Here are some key points to remember and common pitfalls to avoid when creating your plan:

Create realistic financial projections.

If you’re constantly projecting higher sales volumes than what you actually bring in, your bonding opportunities will suffer. More importantly, your employees are relying on this work coming to fruition, and you must stay accountable to them.

Conduct a thorough analysis of each market, agency and project you’re targeting. Then, choose your opportunities based on projected ROI. Be realistic about your chances of winning a contract and the cost of business if you win it. Some projects will require more investment than others to be profitable. If you’re too optimistic in your projections, you’ll likely end up with a disappointing ROI. So instead, forecast conservatively; it’s better to under-promise and over-deliver.

Properly define the target customer.

Before you pursue a customer, you should have a clear grasp of their needs and your capacity to deliver on them. These are the two biggest mistakes I see from 8(a) contractors:

  1. Acting entitled.
    Just because you’re an 8(a) doesn’t mean that the customer is required to give you a contract. To work with the government, you have to show that you can add value to the mission. The contracting agency has an end user to support within a specific budget and timeline — and as a contractor, you can either help or hinder that mission. At sales meetings be ready to explain how you can help, and provide tangible examples of the value you bring to the table. If you can’t, don’t expect to win the contract based on your 8(a) status alone.
  1. Assuming an opportunity is the right
    The last thing you want to do is take on a $20 million project you’re not equipped to handle. Too often, I see an 8(a) win a big award and then default or go out of business because they bit off more than they could chew. To avoid being a one-hit wonder, don’t target customers and projects that you’re not ready for yet. Before you go all-in, be honest with yourself about whether you have the resources to meet the requirements. If not, then make that a long-term goal.

Make meetings respectful, researched and relevant.

Remember that contracting officers are human, too. They’re busy, they have missions they care about and they don’t particularly enjoy long, pointless sales presentations. What they do appreciate is a contractor who respects their time with a pitch that’s concise, relevant and informed. Do your research upfront so that you can intelligently speak to relevant topics like upcoming projects, current competition, past spending, future budgets, key players and geographic factors. (GovWin and beta.SAM.gov are great resources for this kind of research). Don’t waste a customer’s time talking about things you’ve done that don’t pertain to them. Instead, ask smart questions that show you’ve done your homework and understand what matters.

Also remember to treat this meeting as a conversation, not a presentation. Be real. Focus on building a relationship. Discuss what the customer cares about. And through the natural course of conversation, help them intuitively connect the dots between their requirements and your capabilities. If you’re likeable as well as capable, then they’ll think of you when the right opportunity arises.

Focus on the competition and what sets you apart.

First, research who’s currently doing the work you want to do for your target customer. When you meet with the customer, ask them about it. Why did they choose that firm for this sole source of work? What do they like about that company? Is there anything they wish the contractor would do differently? What would make them want to consider you for future work?

This feedback will give you a clear idea of what it will take to compete with incumbents. It can reveal where you have an advantage, what you should improve and how you can distinguish yourself by meeting needs that aren’t being met.

Be ready to address questions and concerns.

Be self-aware. Know if there’s an aspect of your business that contracting officers might question or consider less than ideal, and be ready to talk about it. This doesn’t mean that you need to volunteer your liabilities upfront, but be prepared to discuss them intelligently and optimistically if the topic arises.

For example: If your company is able to perform on a specific type of project but lacks past performance, prepare to talk about your success on similar projects and how your capabilities can translate to this one. Be familiar with your employees’ prior experience; even if your company has never performed on a project exactly like this, you can highlight your people who have.

Ground your rationale in data and specific examples. Never fabricate or offer fluff. Instead, be transparent and positive, and operate with a moral compass.

Bold Concepts Can Help

When pursuing construction contracting opportunities in the federal market, it’s important to be realistic, self-aware and forward-thinking. Do your research, understand your audience and choose wisely. Above all, approach business in a way that prioritizes your customer’s critical mission.

Contact us today to start putting together your strategic business plan.

About Bold Concepts

Since 1989, Bold Concepts, Inc. has been helping Small Business General Contractors accelerate their growth in the federal market. We provide comprehensive support services for small businesses participating in federal government construction programs, with a focus on 8(a), Tribally-owned, HUBZone, SDVOSB, SB, and WOSB contractors.