Growing Your Business from Small to Large

I am wrapping up a proposal effort for a small 8a business thats bidding on their first full-and-open competitive government contract. They made many wise decisions, and invested a lot of money, sweat, and sleepless nights into making the right start. It stretched the company to the very limit but in the end they wrote a stellar proposal which will hopefully make a difference between winning and losing.

I have to confess, initially I doubted their decision to go after the contract with tough competition and complex requirements, and recommended they didnt bid. Their president very wisely pointed out that he was aware of the tough road ahead, and said that at some point sooner rather than later they would have to learn anyway, and break into the competitive environment. In his opinion, starting earlier was better than doing it later, even though they had a couple of years left in the 8a program. He was right.

The worst thing that happens to 8a companies is graduating from the program. Most 8a companies fold within a couple of years from graduation because they never learn how to thrive in a competitive environment.

Initially, 8a and small business set-aside contracts are a relatively easy way to grow, but I agree with Dick Stielglitz, who in his October 2008 article in Washington Technology called those contracts the glittering fools gold of government contracting [that] can become a growth-limiting addiction.

He also said that to get big you must escape from the trap of thinking and acting like a small business even though it is uncomfortable, risky and difficult.

This trap of thinking small is something that many small businesses have a hard time escaping. Changing the way executives think about their businesses is the most important precursor for growing fast. The executive management team has to behave, feel, and make decisions like a large business first, before their company becomes a large business, and trust that the revenue will catch up. Sometimes it may feel like walking on a bridge in thick fog where all one can see is the next few steps, and trust that the bridge will be there even if you dont see it. Changing the mentality and overcoming the fear and doubt is the hardest task. Developing a solid plan, knowing what others have done to succeed, and taking the right steps may make all the difference. Some of those steps are:

  • Critically examining company portfolio and existing clients, and making necessary changes.
  • Becoming very strategic and disciplined in planning business development efforts.
  • Developing a real business development capability a bid engine to make success predictable and repeatable.
  • Growing comfortable with investing serious money into business development and understanding that to win a multimillion dollar competitive contract, it usually takes at least one tenth of the first years potential profit in capture and proposal investment.

Dick Stielglitz lays out an interesting strategy he used in his own company to transition to a competitive environment. He and his team made a bold move and approached existing government clients, suggesting they recompete their sole source and set aside contracts. He tells: Government clients were surprisingly receptive to conducting full-and-open competitions. They defined requirements that were broader than our original statement of work, increased the ceiling to accommodate emergent requirements and issued requests for proposals under a vehicle for which we could compete.

They were relieved to avoid the time-consuming contracting actions associated with putting quarterly purchase orders in place, and were happy to fold several small efforts into one better-managed contract.

For the early RFPs, we hired a consultant to help us develop quality proposals, kept our fingers crossed and prayed during the evaluation period. We won seven of eight, five as the prime contractor and two as a subcontractor when our previous work was folded into an omnibus statement of work. The process of recompeting our set-aside contracts and sole-source purchase orders under full-and-open terms and conditions took about three years.

The benefits of converting client relationships to full and open contracts were enormous. The resulting contracts were larger, we developed an effective process for preparing competitive proposals and we formed a set of lasting strategic teaming relationships.

Remember growth is optional, but change is inevitable. Thinking ahead, learning from the experts who have been there and done it, and getting the right help will get you to grow and succeed unlike the companies who take the easy road. Getting weaned from the small disadvantaged business and small business set-aside contracts may be painful and scary right now, but it is worth it in the long run.

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