Every year the federal government awards contracts worth $100 billion to small businesses, according to the Small Business Administration (SBA). That makes for a lot of opportunity, but there’s stiff competition to win those contracts. Relationships, connections and trust are crucial to doing business with the government, advises the SBA on one of its blogs. But in an environment where it’s more difficult for government and industry to connect face-to-face, how can a small business position itself for success?
Part of the answer is in understanding Market Research. Integrity collaborated with the National Contract Management Association (NCMA) to present a webinar on market research for small business.
In it, we looked at market research from both the government and industry perspectives. Why does the government do market research? What are they looking for? What should small businesses consider as they judge whether and how to chase opportunities? Here are two viewpoints on how to be more visible and viable.
Patricia Miller – An Insider’s Perspective
Why does the government do market research?
After four decades in the Federal government, I can attest to the fact that market research is an important part of the acquisition process. It helps the government understand its requirements and who can potentially fill them, plus it is required by law.
- The Federal Acquisition Regulation (FAR) has several sections related to the need for market research and to the requirement of government to consider small businesses.
- Market research provides information that can shape the acquisition strategy
- It determines the existence and availability of sources for products and services, including those already used by other agencies
- It promotes potential efficiencies through bundling or use of recovered materials
Where does small business fit in?
Government Contracting Officers are mandated to meet small business goals. To the maximum extent practical, they try to contract with a small business or else they have to justify why not. Fortunately, there are many government-wide contracting vehicles available and some are just for small business. When I left the government over a year ago, two popular areas to target were small businesses that are in HUBZones and those with small business disabled veteran status.
How can small businesses stand out?
Small businesses have to work really hard to make themselves visible. The most important thing is to take a broad approach:
- Ensure that you advertise your small business category (women-owned, small disadvantaged, service disabled veteran-owned business and those firms located in HUBZones).
- Use all channels. Market through your website, social media and with a really good tri-fold or hand-out.
- Meet with SBA advisors. I can’t emphasize this enough. These advisors can be your gateway into an agency. They are there to advocate for you.
- Ensure you’re connected through government systems such as SAM, the System for Award Management, and GSA Advantage.
- Maintain good relationships with existing customers. Government agencies tend to go to other agencies so referrals are important.
Derrick Williams – the Seller’s Perspective
Opportunity is out there in the Federal market. Go grab it, right? Not so fast. Some time spent on market research will pay off in the long run because it helps small businesses identify the RIGHT opportunities. One-dimensional business growth planning will likely fail. Have you ever done this? Chased the money without assessing whether it’s the right market for your company? Assumed that because you already do work in one area for an agency, that it gives you expertise in another area? The key to success often comes down to the market research and it must be multi-dimensional.
Market research requires a business to assess not only the external market, but its own company. I recommend three areas of inquiry: Product, Resource and Relationship. Market research should identify the intersection of all three – that’s where the best opportunities lie. Here are some questions to ask as part of the market research process:
Product and Relationship
- Does our product meet the need? (Capability)
- Can we influence the need for our product? (Shaping)
- Can we do the job? (Capacity)
- Can we win? (Credibility)
Resource and Relationship
- Why do we want this relationship? (Suitability)
- What is the purpose of the individual bid? (Fit)
- What does it take to win? (Stakes)
- Can we afford to win? (Cost)
Product and Resource
- What are our costs? (Expenses)
- Can cost be reduced? (Flexibility)
- If reduced, is it the same product? (Quality)
Market Research Gets to the “Core” for Business
The answers to all the questions above will identify the intersection of a company’s product or service, its resources to provide that product or service to the government, and the nature of its relationship with the government. To me, this is a company’s core business, and I believe that resources are better spent on expanding the Core than on pursuing efforts that fall outside the Core. This removes the guess-work and leads to a more cost-effective bid process.
Position Your Business for Success
Success for small business can come down to being visible and being prepared. To meet the government’s market research needs, it is incumbent on every business to make sure its information is accurate, available and compelling. It is difficult for the government or potential partner to engage your services if it cannot find you and does not understand what you do. Remember, the squeaky wheel gets the oil. It is important that you connect with the local SBA Small Business Advocate, be visible on the various contract vehicles (such as GSA’s 8A Stars, Agency GWACs, etc.), register in SAM and other agency procurement systems, and maintain good relationships with existing customers so they are more likely to refer you to others.
The other half of market research is looking inside your company. When mapping out opportunities, look internally and gain an understanding in three areas – Product, Relationship and Resources. A clear understanding of these areas and how they relate to each other will allow you to define the core of your business, and better position yourself for the right opportunities.
About the Authors: Patricia Miller had a lengthy career in the Federal government, including more than 20 years at the General Services Administration (GSA) and the Federal Acquisition Service (FAS). She now supports government clients as a Senior Acquisition Analyst with Integrity. Derrick Williams has over 26 years of experience in the Department of Defense and the private sector. As Integrity’s Director of Business Development, he designs and implements opportunity identification, business capture processes and proposal development.