For a lot of start-up companies and small business the challenge of securing that first customer is key for a number of reasons with chief among them being confidence that you do in fact have something that other people want to buy. Of course it’s more fundamental than that though because depending on the size of the order or the customer you could also determine your initial cash-flow security.
One customer that is sometimes over looked is Government because many start-ups think it’s either too hard and don’t know how and, let’s face it, in the past it has been pretty tough and complicated. Over the last five years however Governments around the world have recognised that it is as important to build large scale industries as it is to support the growth of small business.
By way of example 70% small business in the United States are owned and operated by a single person who can sometimes find the time to step through the myriad of processes and paperwork often needed to sell to Government is just too hard.
Take this example in terms of how much it could be worth to you: recently a sandwich shop (gourmet) in the Australian Capital of Canberra was revealed to have sold $833,516 worth of catering to the Australian Public Service Commission who ran training courses and where lunch was provided to staff attending that training. Now, for a relatively small business and café operation to have that much money sitting on your bottom line can mean a form of financial security at a time when a number of jobs were being lost across the public service in Canberra (thereby impacting demand for your product when consumer spending drops).
Now the news did get out and so it’s probably the case that others will get on the band wagon and try and secure contracts of their own – but why were these people successful? Firstly, they had been awarded 20 catering contracts related to a specific location and area and so they knew that if they were going to get anything they first had to be a supplier.
Secondly, they knew their audience and customer base and so it stood to reason if their front of house product was good, well priced and liked they would probably end up building customer loyalty that can have immense positive downstream impacts. For example, if someone buying off a government contract for your product or service already knows you then chances are they will buy you over others they are unfamiliar with (unless significant price differences exist).
Thirdly they probably knew that while Government contracts are great – you need to be able to sustain a diversity of income which is why many small businesses have a multiple of revenue lines to ensure they do not become reliant on a single one. Because, in the case, when the media questioned the amount of the bill and went looking for whether or not there was a cheaper option the bottom line impact to that small business could have been devastating.
But what you see, when you begin going through the process of unpacking if you have a product that could be sold to a Government department is the myriad of panels that each individual department has on top of Federal or State wide contracts. Using the Australian Public Service Commission as an example:
Learning and Development Panel (refreshed panel) – specialising in individual capability development through training in skill components relevant to the public sector (this panel also includes access to Coaching Services)
Business Services Panel (new panel) – focusing on organisational capability development and includes Facilitator Services
Research Services Panel (new panel) – providing access to research, analysis and reporting services relevant to government needs, including survey design and data collection
eLearning Support Services and Solutions Panel (refreshed panel) – specialising in elearning projects including content development and deployment
Executive Search and Recruitment panel (existing panel) – providing access to 34 approved executive search and recruitment suppliers
Capability Development Panel (Deeds with existing panel suppliers expire 30 June 2014).
The same is true in the United States and also much of Europe where panels of providers are put in place to create the ability of small business to sell to Government.
This week @ EntreHub we are going to take a look at what selling to Government really means and what you need to know to take advantage of the opportunity. We will look at examples from the United States, Australia and the United Kingdom as well as a brief snap shot into Asia.
There will be tips, case studies and insights – so watch this space and remember – a client is a client if you have something to sell and they want to buy it from you. The client can be anyone – Government included.
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