If you are under the impression that government sales are only for large businesses, think again! The US government offers plenty of opportunities specifically tailored for small businesses. As the largest single buyer of goods and services in the world, that means there’s room for businesses of all sizes in government sales. Whether you’re a small LLC or even a sole-proprietorship, you could potentially get into government contract bidding.
However, as we make sure to cover in our government sales training for small businesses, just because government sales are accessible to small businesses doesn’t mean it’s easy. As with any business venture, there are both risks and rewards. Understanding the pros and cons can help you decide if government sales are right for your business.
The biggest benefit to working in government sales is that the US government basically buys anything and everything – and in huge quantities. Would you like a steady customer who’ll clear out your stock regularly and keep coming back for more? That’s an entirely possible scenario in government sales, particularly if you can attach yourself to a multi-year IDIQ contract.
Also, it’s worth keeping in mind that the government actually has mandated that they must give a certain portion of their business to small operations. In some -but not all- cases this can make a contract bid a cakewalk if you’re the only small business bidding in a certain niche. Being a minority small business can give you access to even more small business set-asides to make contracts less competitive.
Finally, as part of that mandate, the government offers significant assistance to small businesses, including one-on-one counseling, to make the process easier.
Selling to the government carries some risks as well.
The biggest drawback is the complicated bureaucracy. Even the slightest mistake in filling out forms, or coding your products/services, could result in your bid being rejected. You will have to invest significant time into navigating the red tape.
Also, for smaller businesses, profit margins can be lower than in the private sector. Contrary to popular belief, the government doesn’t usually overpay for basic goods and services. They’ll expect competitive pricing and have the contracts teams to enforce their rules. The reward is in how steady their business is, not necessarily the gross profits.
Our government sales training programs can help you overcome those drawbacks and get the most from government sales. Contact us to learn more!
For many businesses, government sales can be long term profitable work that empowers their company. Whether their operation is large or small, the true goal is landing an IDIQ contract is to set up a contractual vehicle with the government to sell products and services over a very long time period and with a minimum amount of paperwork once the contract is won.
An Indefinite Delivery/Indefinite Quantity contract means that for a certain amount of time, usually at least 3-5 years, the bidder agrees to supply goods or services to the government on-demand. The exact quantity of deliverables is not set, hence “indefinite.” However, there are often more than one company on larger IDIQ contracts capable of delivering the same thing and you still have to sell yourself and your ideas to the government buyers.
IDIQ contracts actually bring substantial benefits for both sides, so they’re extremely popular among both contracted suppliers and government project managers. Understanding why this is can help you decide if bidding on an IDIQ contract is right for your business.
For the government and their project contractors, IDIQ contracts solve one of the biggest problems: calculating orders for projects where precise estimation is difficult or impossible. This is particularly the case for larger-scale projects or those where significant research and development will be involved.
When the government knows they will need certain products and service over many years, IDIQ is perfect. They can hold a competition and choose the best supplier or team of companies. Once the contract is in place, they can order when their funding is available, and they have the need. If there is no money or no need, the contract sits in place waiting for the right time.
By the same token, IDIQ contracts also guarantee reliable services. There’s no need for project managers to look for suppliers every year- their suppliers are already under contract. This eliminates a lot of contractual overhead for project offices. Eliminating the costly bidding and approval process lowers costs for their project.
Suppliers benefit because of how reliable the business is, if they work hard to sell themselves and keep the work coming in. IDIQ contracts are rarely given out when there’s no expectation of making use of that contract. A signed IDIQ contract is about as close as a business can come to guaranteed income for the length of the contract. It sounds easy but there is also always the need to be selling to the government program offices or the “tasks” won’t keep coming in.
So, you’re trying to land an IDIQ contract or other government contract for providing services – how will that work? How are you going to get paid? Government bids and payments are typically handled in different ways from how commercial businesses or consumers pay for services.
There are five ways that the process generally works, depending on the size of the order and the type of contract involved.
If the amount of the invoice is under $3,000, an approved agent will use a bank card and pay that way, like pretty much everyone else. That might sound like small change -and it is by Federal standards- but these micro-purchases actually make up around 70% of Federal purchases!
Next on the level of scale are purchases up to $150,000. In this case, there are simplified rules in place that minimize the paperwork and approvals necessary. You’ll get your money fairly quickly.
This is one of the more common procedures, for larger contracts. The relevant agency will send out an Invitation to Bid (ITB) which works much like an RFP in the private sector. However, these bids are kept sealed until a particular date, when they are all opened at once and read into the agency’s record. This protects against insider dealing. IDIQ contracts are usually this type, particularly when they are larger efforts.
In situations where the products or services are valued at over $150,000 and are in a highly technical field where few qualified bidders exist, the government may engage in direct negotiation. They may issue an RFP (or a similar Request for Quote, RFQ) or else contact relevant companies directly. This is, however, relatively uncommon due to higher costs and the elevated chances of corrupt behavior.
In situations where the order is going to be massive and multi-departmental, such as for office supplies, CPVs are utilized to leverage economies of scale. These contracts are generally given out to several contractors at once, so purchasing and acquisition can be streamlined. An IDIQ contract may be a CPV.
Is your company interested in jumping into government sales? Learn from the best! ASHER has a long success rate of imparting relevant, actionable information to growing government contractors. Contact us directly to learn more.
Whenever we host government sales training courses, one of the most persistent myths we see pop up is the idea that bidding for government contracts can be a fire-and-forget process. Businesses, particularly smaller businesses, see that so much of the process is done online that they assume it can be handled in a “hands-off” manner.
However, that’s simply not true, at least not if you want to win government contracts. Networking and personal connections play a huge role in landing contracts. In our government sales training seminars, we make sure to emphasize this, and give you key tips on how to make more connections.
Just as with B2C and B2B sales, proper market targeting is critical for B2G as well. With so many departments and sub-agencies within the US government, you want to choose targets that you believe you can best serve. Even if you have a relatively “generic” product or service that could be used by almost any agency, it’s still best to pick your highest priority key targets and focus on them.
Pressing the flesh is still the best way to expand your network. Attend as many trade shows, government events, and any networking opportunity in your field that you can afford. There will very often be government buyers in attendance, and some research can help you pick events that are more likely to have government project managers and other buyers. These will be among your very best opportunities to meet buyers face-to-face and make a great impression.
A single business card from an agent with buying power could be absolutely priceless for your company. Of course good follow up is going to be essential.
Don’t neglect online social networks! While not as effective at gaining confidence as in-person meetings, it’s still a valid discovery tool. In particular, some LinkedIn research can be a great way to increase your own understanding of a particular department’s structure, personnel, and levels of responsibility. This will help you sort out which individuals are worth talking to, and which are too far removed from decision-making authority.
No matter the size of your organization, or how long you’ve been in contracting, ASHER has proven workable strategies which can accelerate your sales. Contact us directly to schedule a class or seminar.
The world of government marketing is constantly shifting, and one thing we emphasize in our business development classes is the need to always keep up with trends. Knowing which way, the winds are blowing will often make the difference, when you’re trying to make the right contract bid at the right time.
As a starter, here are some of the trends we’ve been recently noticing from our recent training at ASHER Government Training, which will likely continue to affect Federal contracting for the rest of 2018.
Three Vital Trends In 2018 Government Marketing and Contracting
1 – The Modernizing Government Technology Act of 2017
Due to laws passed in 2017, going forward, the way the government buys IT products and services will be drastically different. It provided a big influx of funding for updating software systems, with an emphasis on using software to cut costs as well as beefing up cyber-security. This is an absolute goldmine for contractors in technology fields, and they should be looking to pitch their products in terms of ROI. Cloud-based services will also likely see a lot of new contracts.
2 – Increased use of the DOD’s “Other Transaction Authority” (OTA)
In essence, OTA rules give the Department of Defense wide latitude in awarding contracts for innovative or non-traditional defense contracts that would be difficult or impossible to specify in funding bills ahead of time. Use of OTA-based contracts have been steadily on the rise for several years, and there’s absolutely no reason to think that trend will change – particularly when the recent budget bill for 2018 actively boosted funding for OTA projects.
If you think your product/service would have a unique use within the DOD, now is the time to pitch it.
3 – More opportunities for mid-tier companies.
In recent years, there has been something of a “donut hole” for contractors. The biggest players get plenty of prime contracts due to their size and scope, while funding rules encourage use of small businesses. This has left mid-level companies lagging. However, midsized companies have been increasingly able to make decision-makers aware of this issue. More contracts have been awarded to midsized operations in recent years, a trend that’s likely to continue.
Learn the Secrets of Federal Contracting from ASHER
Large, midsize, or small – we can teach your company everything you need to know about government marketing! Contact us to learn more.
If your operation is looking to enter the business of government contracting, you’ll have a lot of adjusting to do. Government sales are unlike any other form of business, with a lot of specialized terminology and ideas. Due to the sheer size of the government, there is also a huge range of possible ways you can get contracts.
However, one thing remains true across all contractors: The most prized contracts are known as Indefinite Delivery/Indefinite Quantity, or IDIQ. Fundamentally, the goal for virtually any contractor is winning IDIQ contracts. So today, we wanted to discuss the basics of the IDIQ contract, for newcomers.
Government Contracting 101: Understanding the IDIQ Contract
Boiled down, what an IDIQ Contract means is this: For a pre-set amount of time, generally five years, your company will provide a certain product or service on-demand. You may not be measured according to any specific quantity of deliverables, just that you be able to deliver them as requested.
Basically, if you have the capacity to fulfill the orders when they come in, IDIQ contracts almost always mean solid profits for the term of the contract, IF you can aggressively add scope to your contract with requested work. Further, contractors who can many years.
IDIQ contracts are useful for the government because they take a lot of uncertainty out of ordering and fulfillment. As a simple example: An R&D division is developing a military hardware project, and they have no idea how many screws they’ll need to successfully complete the project. So, they set up an IDIQ contract with a provider of screws, ensuring they’ll always be able to get more screws as needed. This also means being able to budget for it ahead of time-based on the value of the contract.
IDIQ contracts are usually win-win for both sides. The government gets guaranteed supply, while minimizing administrative costs, and the contractor gets a highly lucrative contract that’s guaranteed for at least several years.
ASHER Can Provide the Training You Need to Succeed
Asher Government has a long history of success in government sales and consulting – expertise that we make available in our government sales workshops. No matter the size of your business, or how long you’ve been in federal contracting, our government sales workshops impart the critical information your executives and sales staff need to succeed!
When it comes to government sales, it’s all about closing. Knowing how to seal the deal is what keeps a contractor growing. Here are four ways to help ensure that happens.
The Four Steps Towards Closing Government Sales
1- Make strong buyer personas.
A buyer persona is a personality profile of your key market demographics, designed to help you design sales pitches to fit certain “types” of buyers. It’s best to know your sales targets personally, but when you don’t, buyer personas can serve as stand-ins – as long as they’re well-constructed.
Government sales are very siloed. People have distinct roles and responsibilities. Know your target’s position, and you can build a buyer persona to fit their job role.
2- If you’re not communicating, you’re not working.
Government buyers will rarely come to you. (And you’ve truly “made it” when they do.) You need to be engaging and consistent in your outreach. Make lots of contacts and follow up on those contacts. Stay on the phone or, when applicable, email or IM. Most government buyers prefer phone or email contact but be flexible if one expresses a preference for other digital communications.
Outreach, outreach, outreach. The more calls you make, the better your chances.
3- Focus on problems and solutions, not on technology.
Most government buyers are not as technologically savvy as their contractors and suppliers. If you geek out about your technology, at best they’ll be disinterested and at worst you’ll scare them off. When making pitches and demos, focus on their problems and what you can do for them in very down-to-earth terms. Pitch optimization and efficiency as the end goals.
4- Know your target’s procurement process.
Finally, the more research you can go into their internal processes, the better. Different departments, even different branches within those departments will have different procurement methods. Knowing these, and being able to work with their processes, can make the difference in closing a deal. Buyers want sellers who simplify their lives.
Learn more from Asher Government sales workshops! Contact us today.
For most in government contracting, success means winning IDIQ type contracts – and that’s exactly what Asher Government is here to help you do! Our in-depth government seminars and training courses for contractors can provide the insight you need to take your contracting operation to the next level and win more IDIQ contract bids.
If you choose to partner with Asher Government for government sales training, we can give you deep knowledge of our methods for closing contract deals, including…
Five Tips for Winning More IDIQ Contracts
1- Focus on top long-term prospects
There’s a lot of churn at government agencies, particularly at the lower levels. Focus on the players who have been there awhile and work them as long-term prospects. Even then, you’ll likely lose around 15-25% of your contacts each year, so consistent outreach, networking, and prospecting are necessary.
2- Research your contacts and their organizations
The more you know about your target and their department, the better you can precisely target their needs. There is truly no such thing as too much research, as long as you’re uncovering legitimate information. Always keep looking for new intel!
3- Find a coach
If you’re new to government sales, it can be overwhelming – and buyers won’t cut you much slack for not knowing the ropes. Finding the right coach to teach you the vocabulary, the processes, even the nonverbal signals, can make all the difference.
4- Build rapport to sell yourself
Your solution is only part of your sales pitch. What your prospects think of you can make a huge difference! If you build rapport and they genuinely like you, that could easily help you edge out the competition. Focus on making good first impressions, and always dress to impress.
5- Don’t just talk – Listen!
Too many salespeople spend too much time talking, and it only hurts their own chances. Leads and prospects want to feel like they’re being heard. Ask open-ended questions about their problems and processes, and genuinely listen to their answers. Don’t give canned sales pitches; make your pitch directly relevant to what they tell you about their needs.
Learn the Ropes from Asher Government
That’s not all – we’ve got even more tips for winning IDIQ contracts to share in the next blog. In the meantime, to set up your own government business development seminar, please contact Asher Strategies.
The benefits of government sales training through Asher Government run deep. Our trainers have combined decades of experience selling to the government and acting as consultants for up-and-coming contracts. We aren’t simply selling you a list of contacts – we know the strategies that work, closing deals and winning contracts.
An investment into training seminars will pay off for years to come, as the benefits of government sales training become clearer. For newcomers to contracting, in particular, our strategies can make the difference between success and failure.
Five More Ways to Close Government Sales and Win Contracts
1- Use strong marketing messages
Your marketing messages should focus specifically on the prospect’s needs. How will you solve their problems, optimize their systems, and provide ROI on their spend? Avoid spending too much time bragging, and never engage in hyperbole you can’t back up. Focus on them and their needs.
2- Provide memorable solutions
Newcomers tend to focus on their technology and spout a lot of statistics. Neither of these approaches works. Stories and videos are what your prospects will remember, particularly when those stories and videos are directly illustrating the solutions you provide.
3- Always improve your closing techniques
Even great closers can always get better. Keep training yourself to read their body language. Recognize when they’re ready to buy. Know when to walk away if they aren’t going to buy. Always seek to improve your tactics.
4- Create long-term relationships
We said in the last blog there was a lot of churn in government employment, and that’s true. However, the contacts you should truly treasure are the long-time career civil servants. Even if they change positions, keep in touch with them! You never know when they’ll have a need for your services or know someone else who does. Speaking of which…
5- Get referrals
So, few salespeople think of this. If a prospect likes you, and your pitch, but simply isn’t in a position to buy, they could easily know someone else who you can target. Referrals are almost always excellent leads since they’re hearing about you from someone they already trust.
Take Your Contract Bidding to The Next Level with Asher Government
Even a single seminar can help your organization and staff realize the benefits of government sales training. Take advantage of our expert knowledge – contact us today to begin the process!
Asher Government Training programs are designed to provide a full spectrum of information on how your organization can become more proficient at selling to the government. We stay current on the latest in sales techniques and marketing tips for defense contractors so that we can continue to provide top-quality training for our clients.
One of the most recent revolutions in government marketing has come from social media. It’s not just for B2B and B2C! LinkedIn has increasingly become part of government purchasing programs as well, and can be another vital tool for helping you get those contracts first!
Our Tips for Defense Contractors;
1 – Optimize Your Profile for Your Target Agencies
Your LinkedIn Profile isn’t a purely factual space, it’s also your opportunity to make your first impression on the departments and agencies you’re targeting. Write your company description to match! Be sure to include plenty of keywords and proficiencies relevant to the contracts you’re seeking. This will make it more likely that government buyers find you before you even have to get their attention.
2 – Demonstrate Real Thought Leadership
With over one hundred million users, standing out on LinkedIn can be difficult. That’s where thought leadership can make the difference. Stay up-to-date on events and trends in your industry. Recognize good ideas coming out of other members or groups, and share them on your profile. However, more importantly – add your own ideas. Thought leadership means doing more than just following trends. Put your own spin on things, and add value – even to your social posts.
3 – Join Relevant Groups – Or Make Your Own
Social media, by its nature, is not a solo effort. You might be competing against other organizations on LinkedIn for contracts, but you should also join with them in Groups centered around your shared business interests. This can help you establish thought leadership, and it will also build contacts you could leverage for shared contracts in the future.
4 – Always Seek Better Contacts
Leverage all the tools within LinkedIn to build contacts with decision-makers within your target departments. This is another benefit to joining groups – you may be in a group with the very people you’re trying to impress. It’s also worth paying for a paid subscription, for unrestricted access to the InMail messaging service.
Need more defense contracting marketing tips and advice? Asher Strategies can help. Contact us to discuss our seminars!