I recently posted this over at The Customer Collective, but wanted to share it here as well. Over the next few weeks, I’ll be writing more about how small businesses can take advantage of the influx of government contracts I know we’ll see. Enjoy!
By now, every American has heard that President Obama is driving a massive economic stimulus package. This flow of cash in a suffering economy will be tantamount to flooding a dry river bed: Manufacturers are holding their breath for automotive and military contracts. Construction companies are looking for the promised infrastructure renewal contracts. Energy companies have already launched a compelling campaign to get in on the action. And everyone knows what Wall Street and the automobile companies are up to. But what about the little guys?
With economists’ projecting that smaller businesses will be an essential source of new jobs, the Obama cash infusion is just as crucial for them.
The first step toward small and mid-sized business success is understanding the Obama stimulus plan. Then SMBs must position their companies’ plans to dovetail with the inevitable package.
Obama’s Plan: The Crib Sheet How big?
On Sunday’s episode of “This Week with Geoge Stephanopolous,” Obama spoke of a stimulus package of nearly $800 Billion, and others have speculated that it may ultimately be more than $1 Trillion. Much of it will be funneled through state and local agencies, and allocated in a block-grant fashion.
Where will it go? Energy, infrastructure, and manufacturing companies will receive the bulk of it. The first package will cover roads, bridges and other infrastructural needs and the second round, which will not be seen at least until fall, will be directed at restoring our crumbling buildings, VA hospitals, schools and so on. Some of the initial bailout funds will go to the automotive industry and will thus indirectly support manufacturing. Military refurbishment will also give a boost to America’s manufacturing industry and incentive-driven money will go to the energy industry. There will be adult money for spade-ready or near-ready projects at the federal and state levels. A token amount will be allocated indirectly to green energy, but not much.
Which industries and projects will benefit the most? Congress will get the ultimate say, and you can bet that this means that powerful lobbying groups and constituents will have profound influence. In his most recent interview, Obama conceded that though his influence will come in the form of guidelines, he will let Congress “…work out the specifics.”
Bet on the winners. So who will get the majority of this money? The people who have gotten the majority of it in the past. To jump-start the economy, politicians and agency bureaucrats are going to go with the contractors and companies with whom they have worked before. New companies will only get a foot in the door by working with a primary contractor with an established governmental relationship.
Your Plan: The Crib Sheet
Form a relationship. Any small to mid-sized business that’s not already working directly with the government needs to find itself an experienced, credentialed industry player and build a relationship. Start this process by looking at the current top 100 government contractors (http://ethisphere.com/government-contractor-top-100/.) There will be a lot of RFPs and opportunities on which to bid in the marketplace, but in the end, familiar faces will get most of the money. It’s up to you to become a familiar face to the government’s familiar faces.
Also, figure out who the most powerful politicians and bureaucrats are in your industry or locale and make friends. The allocation of funds will undoubtedly be influenced by their relationships and whims, and being in with the “in crowd” will help your chances.
Be a rock in the river. Position yourself in front of the flow of the money. It sounds logical because it is. You need to either provide those products or services that are used by the industries we’ve identified or to supply the companies that support those industries. Pieces and parts.
Money will come in blocks and it will come in bits. Smaller contracts may mean better opportunities for small businesses. Create a system for evaluating opportunities and then apply your resources to those opportunities in which you have the greatest potential of winning. If you concentrate on all opportunities, you will likely end up with nothing. If you decide that you have a shot in several industries, diversify your partnerships so that you are in a position to win on several fronts.
Sharpen your RFP skills
Government involvement and massive amounts of funds beg for a high level of oversight. Therefore, there will likely be an RFP requirement for most opportunities of any significant size. Be sure your RFP skills are up to par. Download the free e-book, “Landing Big Sales with an RFP” at www.huntbigsales.com/ebooks.php for a refresher. The e-book details key strategies and tactics for landing a deal with an RFP. The day after tomorrow. Remember Blackwater, Halliburton and Madoff.
At some point in the future there will be scrutiny about the deeds done today. The RFP process is littered with pitfalls and unintended consequences, so be mindful of your partners and your processes while you are getting your share of the profits.
Now is the time to put together your strategy for landing sales in this flow of opportunity and cash. Choose your opportunities and your partners wisely and don’t be afraid to jump in the river. It’s been a while, but now I can safely say, the water’s just fine.