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How to Master Government Bidding as a Small Business Owner

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According to the U.S. Government Accountability Office, or GAO, the federal government awarded $637 billion in contracts in 2021.

As a small business owner, competing against large corporations for government contracts may seem daunting. But government work may be more accessible than you think. Of all the money spent on contracts, $149.5 billion was awarded to small businesses.

That’s no coincidence. The government actively supports small business owners through its procurement process.

Let’s take a closer look at the benefits of winning a government contract and the steps you can take to make your business competitive.

Benefits of Government Contracts

When it comes to customers, the federal government is one worth pursuing. Here are some of the benefits available to government contractors:

  • Competitive pricing/high-paying contracts
  • Longer contract terms offer a more stable income
  • Consistent on-time payments
  • Less risk of your customer running out of business
  • Designated opportunities for small businesses

Challenges Associated with Bidding for Government Contracts

Federal contracts represent significant and stable income opportunities, but they also involve more regulatory and compliance work. In addition to following rules, such as those laid out by the Code of Federal Regulations, everyone in your business may be required to pass government screening and background tests.

Still, there are a lot of bidders, and small businesses may be at a disadvantage in terms of resources. Large corporations can have entire departments devoted to quality assurance, compliance, and cybersecurity.

Bigger companies may also have an advantage when it comes to production resources, which makes it easier for them to compete for contracts that involve high-volume delivery.

Still, many small businesses win government contract awards. Let’s look at the steps you can take to find the right federal business opportunities for you.

How to Win Government Contracts as a Small Business

Mastering the government bidding process as a small business is about attention to detail and strategizing to identify the best opportunities to target.

Here are the steps you can take to improve your chances of winning a government contract.

Businesswoman running a business with a laptop

Correctly Profile Your Business

Before you start drafting proposals, you must ensure your business meets the basic requirements. Here are the tasks you need to complete before you can start applying:

  • Obtain a Unique Entity Identifier (UEI). Obtain your number by registering for the System for Award Management (SAM) at SAM.gov. This is the official portal to view contract data and listings.
  • Figure out your NAICS code. Every business has a primary North American Industry Classification System (NAICS) code, but you can have additional classifications if you sell a variety of goods and services. You can find a complete list of NAICS classification descriptions at the U.S. Census Bureau website.
  • Determine your business size. The government specifically sets aside opportunities for small businesses, but to be eligible, you must meet the size requirements. You can use the government’s Size Standards Tool to see if you qualify.
  • Stay compliant. Small businesses applying for government contracts must follow the regulations defined in 13 CFR 125.If you want to contract with the Department of Defense (DoD), you must also have Cybersecurity Maturity Model Certification (CMMC). For certification assistance and cybersecurity training tools, visit the DoD’s Project Spectrum.

Take Advantage of Set-Asides and Small Business Programs

Once you have the basics in order, you can start looking for government contract opportunities using SAM or a database like Periscope Holdings and Bidnet Direct in the USA or Merx.com in Canada, that connects you with the most relevant options in the federal marketplace.

At this point, it can be helpful to look at set-aside contracts for small businesses. These are opportunities available solely to small businesses.

Furthermore, individual federal government agencies each have their own goals for awarding contracts to different types of small businesses. Collectively, the federal government aims to award the following:

  • 23% of prime contracts to small businesses
  • 10% of prime and subcontracts to small disadvantaged business
  • 5% of prime and subcontracts to women-owned small businesses
  • 3% of prime and subcontracts to HUBZone small businesses
  • 3% of prime and subcontracts for service-disabled veteran small businesses

Check out the SBA’s list of contracting assistance programs to look for opportunities that fit your business.

Businessman browsing for information

Identify the Best Government Agency for You

In some cases, trying everything and seeing what sticks can be a useful approach. But that’s not often the case with government contracting. Responding to a request for proposal (RFP) takes a lot of work.

Instead of spreading your limited resources across several attempts, focus your attention on a particular department. Do some research on contracts by area of government and see which department matches your capabilities, products, and services the best.

Individual federal agencies have their own small business offices that can help you find and apply for the right projects.

Start with Small Contracts

To make your proposal more competitive, it’s helpful to have a relevant and successful track record.

Along with continuing work for private clients, you can look for contracts with state or local government buyers. Or, look for subcontracting opportunities under a prime contractor to get some experience.

Identify and Contact Potential Bid Partners

Another way to improve your proposal is by forming a joint venture with another small business.

A joint venture lets businesses join forces and compete together for government contracts. By working with another business, you get to combine resources, expertise, and past performance. Not to mention, there are cost-sharing benefits if you win the contract.

To apply as a joint venture, find a partner who has similar expertise or can provide the knowledge and capabilities that you lack. Once you have the other business, the joint venture must be established in writing and registered with SAM, and have its own UEI.

Businessman consuming online resources

Best Resources for Small Businesses Bidding on Government Contracts

Finding the right government opportunities can seem like a challenge. Here are some of the best resources you can use to get started.

Educational resources:

Government contract data:

Databases and application portals:

Making eye contact in a business meeting

Final Thoughts: How Your Small Business Can Win Government Contracts

A federal government contract can be a huge boon for your small business. When you don’t have the resources of a large company, finding the right opportunities is half the battle.

Take some time to find the best match for you. Then you can focus your efforts into putting your best foot forward with a compelling proposal.

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Let the Urgency of Your Customers’ Needs Guide Your Sales Strategy

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When companies are creating profiles of possible target customers, there is a dimension they often overlook: the urgency of the need for the offering. This article provides a process for segmenting prospective customers in this fashion and creating a sales strategy.

Many business leaders believe that they fully understand their best target customers. They’ve developed clear profiles (a.k.a. personas) that are richly detailed with well-researched parameters, such as standard characteristics (e.g., age, education level, years at the company, role) or firmographic (e.g., annual revenues, number of employees, industry, geography, years in business). While such characteristics are important, they ignore another crucial characteristic: urgency of need.

A company that offers a software-as-a-service billing solution for small and mid-sized private dental practices may focus on classic demographics, such as the size of the practice (number of employees or number of dentists), the age of the practice (since older practices may more likely have outdated systems), or the amount of insurance billing the practice does each year.

These variables are useful in helping to produce a list of prospects, but they don’t determine which of these dental practices the sales team should call on first. If, however, the company added data that reflects which of these practices’ needs is most urgent — say, those that have advertised for billing and claims administration help more than twice in the past year (suggesting that they are struggling to keep up with billing) — salespeople would be able to prioritize their attention on these prospects.

The Four Segments

This needs-based approach entails segmenting potential customers into four segments:

  1. Urgent. The customer recognizes that it has an immediate need. (We just had another billing person quit!)
  2. Non-urgent. The customer recognizes the need, but it isn’t a high priority at this time. (We realize that our billing needs are changing and our current system will need to be revamped. We plan to start looking into this in the next year.)
  3. Currently met. The customer believes it already has an adequate solution to address the need at this time but recognizes it may not be a long-term solution. (We have an older billing system in place that still does the trick for now.)
  4. None. The customer simply has no need nor expects such need anytime soon. (Our small practice has a limited number of patients who pay out of pocket. Since all payments are made at the time of service, we simply don’t need a complex new billing system.)

This focus on the urgency of target customers’ needs may sound like common sense, but we have found in our work with B2B companies — from mid-sized firms to Fortune 50 giants in an array of industries such as financial services, enterprise information technology, utilities, industrial solutions, and health care technology — that they often fail to consider this dimension. Here is a process a firm can employ to apply this approach.

Identify new customers.

To identify prospects outside of your existing customer base, you can use available information. One is a source we mentioned: help-wanted ads that reflect a particular need.

But there are plenty of others. For instance, if a company sells inventory management solutions, a source of valuable data might be manufacturing industry merger-and-acquisition data, which could reveal companies with an urgent need to change or merge systems such as those for managing inventories. If a company sells quality-management solutions, a source of valuable data could be companies that are getting hammered for poor quality on social media.

Gather the necessary information.

Identifying your customers’ true urgency of needs requires looking beyond your typical demographic and firmographic profiling. This starts with an outreach initiative to talk to customers and prospects. The purpose is to ask questions to identify new target customer parameters that may be impacting the customer’s urgency of needs:

  • Frustrations. How urgent is the need to resolve these frustrations? Which frustration would best accelerate success if resolved?
  • Goals. Are your goals clear, consistent, reasonable, and measurable? Have your goals shifted recently?
  • Roadblocks. What keeps you from reaching your goals? (i.e., What keeps you up at night?) What is the magnitude of the impact of these roadblocks?
  • Environmental and situational factors. Are you experiencing any industry consolidation, organizational or executive management changes or instability, competitive changes, regulatory changes, and so on? What is the magnitude of the impact of these factors?
  • Technology factors. Are there new or changing technologies that will impact your ability to achieve your goals? Are you at risk due to technology end-of-life issues or incompatibility?

Assess your firm’s ability to serve lower-level segments.

Once a company has performed its needs-based segmentation effort, it should seek to answer the following questions about each of the four levels. The findings will dictate the sales and marketing strategy, level of investment and resource allocations.

Level 1. Urgent need

How quickly can we meet their need? How can we best serve them? Is the market opportunity large enough to focus only on these prospective customers? Given the customer’s urgency, how do we price our products to optimize margins without damaging relationships by appearing exploitive?

Level 2. Non-urgent need

Can we convince them that their need is more urgent than they currently believe? How do we effectively stay in touch with them so we remain top of mind when they perceive that their need has become urgent?

Level 3. Need currently met

Should we walk away from these prospects? If so, when and how do we touch base with them to see if their needs have changed? Or is there an opportunity to continue to work to convince them that their need is either more significant than they realize or could be much better addressed? If so, what’s the best approach to get them to reconsider their current situation and recognize their true need and its urgency?

Level 4. No need

Should we completely remove these contacts as any potential prospect? Is there some other need we may be able to address for them — perhaps with another product? Should we be in contact on a planned basis to see if their situation has changed? How do we best do that?

The ideal customers are those who clearly understand and recognize they have an urgent need for your offering. However, if that opportunity is not enough to meet the company’s sales volume target, it may be necessary to extend efforts beyond Level 1. Gaining the attention of these additional target customers, challenging their perceptions of their needs, and educating them on how your offering could benefit them will require resources. Consequently, a critical assessment is required to determine whether the opportunity outweighs the investment necessary to address customers in these other levels.

Test your new targets.

Before committing to a complete revamp of how your salespeople are prioritizing opportunities, select one or two experienced salespeople to help you test your new target customer parameters. Identify a few prospects that align to your revamped target profiles, and see how the selected salespeople are able to penetrate them.

Revamp your sales messaging and training.

Include prospective customers’ level of need in your sales messaging — the language that the sales team uses in its interactions with customers. Revamp your sales tools (materials such as brochures, technical papers, and customer testimonials used in the selling process) to include the urgency of need. And teach salespeople how to read and react to the prospective customer’s level of need and adapt their language appropriately.

By adding urgency of need to target customers’ profiles, companies can do more than differentiate their offerings more effectively. They can also identify new growth opportunities and successfully pivot away from slowing or tightening markets. They can accelerate the sales of new products. Last but not least, they can turn underachieving sales teams into strong performers.

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11 Ways Tech Adoption Impacts your Small Biz Growth

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Small businesses rely heavily on technology to drive development and innovation. Adopting the correct technological solutions can help to streamline processes, increase efficiency, improve client experiences, and create a competitive advantage in the market.

In this post, we will look at how technology contributes to the growth and success of small enterprises.

photo credit: Ali Pazani / Pexels

1. Streamlining Operations

Implementing small business technology solutions can automate and streamline various aspects of small business operations. This includes using project management software, customer relationship management (CRM) systems, inventory management tools, and accounting software. Streamlining operations not only saves time and reduces manual errors but also allows small businesses to allocate resources more efficiently.

Tip: Regularly assess your business processes and identify areas that can be automated or improved with technology. This continuous evaluation ensures that your technology solutions remain aligned with your evolving business needs.

2. Enhancing Customer Engagement

Technology enables small businesses to engage and connect with their customers more effectively. Social media platforms, email marketing software, and customer service tools allow businesses to communicate and build relationships with their target audience. Customer relationship management systems help businesses track customer interactions and preferences, providing insights to deliver personalized experiences and improve customer satisfaction.

Tip: Leverage data from customer interactions to create targeted marketing campaigns and personalized offers. Use automation tools to send timely and relevant messages to your customers, enhancing their engagement and loyalty.

3. Expanding Market Reach

The internet and digital marketing platforms provide small businesses with the opportunity to reach a broader audience beyond their local market. Creating a professional website, utilizing search engine optimization (SEO), and leveraging online advertising channels allow small businesses to attract and engage customers from different regions or even globally. E-commerce platforms enable businesses to sell products or services online, further expanding their market reach.

Tip: Continuously monitor and optimize your online presence to ensure your website is discoverable and user-friendly. Leverage analytics tools to track website traffic, visitor behavior, and conversion rates to make data-driven improvements.

Analyzing big data for decision making process

4. Improving Decision-Making with Data

Technology provides small businesses with access to valuable data and analytics, enabling informed decision-making. Through data analysis, businesses can gain insights into customer behavior, market trends, and operational performance. This data-driven approach allows small businesses to make strategic decisions, optimize processes, and identify growth opportunities more effectively.

Tip: Invest in data analytics tools and dashboards that can consolidate and visualize your business data. Regularly review and analyze the data to uncover patterns, identify bottlenecks, and make data-backed decisions to drive growth.

5. Facilitating Remote Work and Collaboration

Advancements in technology have made remote work and collaboration more feasible for small businesses. Cloud-based tools, project management software, and communication platforms enable teams to work together efficiently, regardless of geographical location. This flexibility opens up opportunities to access talent from anywhere, increase productivity, and reduce overhead costs.

Tip: Establish clear communication protocols and project management workflows to ensure effective collaboration among remote teams. Use video conferencing tools for virtual meetings and foster a culture of transparency and accountability to maintain productivity and engagement.

6. Embracing Emerging Technologies

Small businesses should stay informed about emerging technologies that have the potential to transform their industries. Technologies such as artificial intelligence, machine learning, blockchain, and the Internet of Things can offer new opportunities for growth and innovation. Being open to adopting and integrating these technologies into your business strategy can give you a competitive advantage.

7. Data Security and Privacy

Data security and privacy are critical considerations when using technology in small businesses. Implement robust cybersecurity measures, such as firewalls, encryption, and secure data storage, to protect sensitive customer information and intellectual property. Regularly update software and educate employees on best practices for data security to minimize the risk of data breaches.

Work with CRM system

8. Customer Relationship Management (CRM) Systems

A dedicated CRM system can help small businesses manage customer relationships more efficiently. It allows businesses to track customer interactions, store contact information, and monitor sales pipelines. Utilize CRM software to streamline sales and marketing processes, personalize customer interactions, and nurture long-term customer loyalty.

9. Continuous Learning and Skill Development

Encourage continuous learning and skill development among employees to keep up with technological advancements. Provide access to online courses, training resources, and workshops to enhance digital literacy and proficiency. Embrace a culture of learning and innovation to ensure your small business remains adaptable and competitive in the digital age.

10. Scalable and Flexible Technology Solutions

Choose technology solutions that are scalable and flexible to accommodate your growing business needs. Consider cloud-based software and platforms that allow you to easily scale up or down as your business evolves. This scalability enables small businesses to adapt to changing demands and seize new opportunities without significant disruptions.

11. Regular Technology Assessments

Regularly assess your technology infrastructure to ensure it aligns with your business goals and remains up to date. Conduct technology audits to identify areas for improvement, eliminate outdated systems, and explore new technologies that can drive growth. Stay proactive in evaluating and optimizing your technology stack to maximize its impact on your small business.

Businessman using biz tech solutions

Conclusion

Technology serves as a catalyst for small business growth. By leveraging technology effectively and staying agile in an ever-evolving digital landscape, small businesses can unlock their full potential, adapt to changing customer expectations, and drive sustainable growth.

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Nine Reasons Why Turning Down a Client Is the Best Option for Your Business

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While your business may not be right for every client, every client may not be right for your business. To that end, what’s one sign you should turn down a client, and why?

These answers are provided by Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most successful young entrepreneurs. YEC members represent nearly every industry, generate billions of dollars in revenue each year, and have created tens of thousands of jobs. Learn more at yec.co.

1. The Client Has Unrealistic Expectations

Sometimes you’ll meet clients with unrealistic expectations — even when those expectations are incompatible with your products and services. They might demand services that you may not be able to deliver. Trying to keep such clients can often damage your relationship with them, encourage them to spread bad word-of-mouth, and hamper your reputation. Identifying such clients in time can prevent that.

Andrew Munro, AffiliateWP

s2. They’re Unresponsive

The number one way to tell if a client isn’t right for your business is if they are unresponsive. For client-business relationships to work, mutual understanding, communication, and respect are essential. If a client keeps pushing you aside when you need to clarify something for a project you’re working on for them, it may be time to move on at the end of the assignment.

Daman Jeet Singh, FunnelKit

3. They Complain During Every Step

An obvious sign that a client isn’t a good fit for your business is when they complain about your work every step of the way. I’ve encountered clients who complain because they think they will get a better price or free work. If they are truly unhappy, try to correct the mistake once or twice, and if that doesn’t work, give them a refund. Catering to toxic clients will not help you grow or succeed.

Chris Christoff, MonsterInsights

Meeting with a client

4. You’re Unable to Meet Their Needs

One should turn down a client whose expectations are hard to meet. They may not be in the wrong in the situation, and they have the right to expect certain things since they will be paying for the solutions offered. However, you should assess whether it will be possible for you to keep up with those expectations considering your current scale of operations or resources available.

Stephanie Wells, Formidable Forms

5. They Exhibit a ‘Blame-Oriented’ Mindset

Watch for a “blame-oriented mindset” in your prospecting and sales conversations. Ask a question like, “What solutions or service providers have you tried before to solve this problem, and why didn’t they work?” Observe if the prospect takes any ownership for past failures or solely blames previous providers. Such an attitude is a clear sign of a lack of accountability and collaboration. Turn down such prospects!

Devesh Dwivedi, Higher Valuation

6. They Constantly Dismiss Your Advice

Picture this: a client who insists on guiding you through uncharted territory while you hold the compass of expertise. When faced with a client who consistently dismisses your professional advice and insists on going against best practices, it’s time to question the compatibility of your collaboration. Remember: You’re the expert for a reason, and your recommendations should be valued.

Abhijeet Kaldate, Astra WordPress Theme

Talking with a big client
photo credit: Karolina Grabowska / Pexels

7. They Aren’t Engaging in the Project

When a client consistently fails to provide the necessary resources, feedback or engagement required for a successful partnership, it’s time to hit pause. A one-sided relationship will leave you feeling like a solo artist in a duet. Seek clients who actively participate, collaborate and invest in the success of the projects you undertake together.

Adam Preiser, WPCrafter

8. There Is Value or Goal Misalignment

Turn down clients if their values or goals are not aligned with your business. This can lead to conflicts and dissatisfaction and even damage your reputation. Focus on clients who share similar values and goals to maintain your brand’s integrity and benefit from the work you do for them.

Nic DeAngelo, Saint Investment – Real Estate Funds

9. They’re Always Adding ‘One More Thing’

You can tell a client is not right for your business, especially if you’re a freelancer, if they keep adding “one more thing” to the project. For instance, if you’re a writer and a client asks you to edit some of their other work “as a friend,” it may be time to end the partnership. This situation will lead to you doing tons of work and extra assignments for free, which was not the arrangement. 

John Turner, SeedProd LLC

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