The Importance of a Focused Government Sales Strategy for Small Businesses
Many small business owners feel that their company does not have the time or resources to enter into the government marketplace. The truth is that government sales can be very beneficial to a small business but the process is not always as straightforward as one might think. It is important that small businesses develop a focused government sales strategy before diving head first into the government marketplace.
The government marketplace is very crowded and hypercompetitive. Commercial vendors, especially small businesses, must be able to draw attention to their company and market their products and services effectively. Government buyers often have different priorities than commercial buyers, and businesses need to market their brand to specifically meet these needs. A small business needs to be able to focus on what makes their company different from the rest in search of the same contracts.
When developing a government sales strategy, a small business must understand the advantages it has in dealing with the government. The federal government has purchasing goals to award at least 23% of all contracts to small businesses. GSA also has set aside policies for small businesses that are minority owned, women-owned, veteran-owned, in areas of economic strain and more. Larger firms also often seek to partner with small businesses to use as subcontractors.
While the advantages are there, it is imperative that small businesses properly strategize around them. For example, when making a teaming agreement with a larger company, there must be a clear separation of responsibilities between the firms. In order to qualify for small business set asides under a teaming agreement, the small business must perform at least 51% of the work. Violating this “51%” rule can result in a GSA audit, which is why a clear separation of responsibilities is so important. The government looks at a company’s past performance when deciding whether or not to award contracts to them so it is extremely important that small businesses take all the necessary steps and precautions when entering the marketplace, as any mistakes may tarnish their record with the government.
Be sure to consult government contracting professionals to help develop the government sales strategy that is right for your small business. To learn more, download our Government Business Development Capabilities Statement.