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Tips For Selling To The Government
The federal government spends hundreds of billions of dollars annually buying products and services from small businesses. Could your company be one of them? Here are 10 steps to breaking into the lucrative world of government contracting.
Can I Really Sell To The Government
Mult-million dollar federal government contracts awarded to large defense and aerospace conglomerates often get a lot of attention through the media. But dont let that discourage you from getting your company in a position to sell to the government federal, state, or local.
There are plenty of opportunities for small and medium size businesses, as well. The following Q& As will help you determine if your company is a likely candidate to sell to the government.
Can a company like mine really have the federal government as a customer?
The federal government is the largest single customer in the world. They spend over $500 billion per year on goods and services. The government is looking businesses that can provide quality goods and services, on time, and at a fair and reasonable price.
Not all federal contracts are with huge corporations. In Fiscal Year 2019, the federal government awarded more than $132.9 billion in federal contracts to small businesses, which represented 26.50 percent of small business eligible federal contract dollars. In addition, large federal contractors with large contracts must also subcontract to small businesses.
Many think the process of being a federal vendor is perplexing and has become too competitive. However, over the last 25 years, the federal government has worked diligently to simplify and automate the procurement process. With an understanding of the process and the market, a business can see great success in the federal market.
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Unique Aspects About Targeting Government Entities
Before we outline the challenges of generating leads in the government sector, let me tell you the good news you will have more conversations. It is easier to connect with government prospects than with the private sector. Yes, government employees are more likely to pick up the phone. Why? Part of their job is to serve the needs of their community. So, they spend a good portion of their day helping constituents on the phone. Does this lead to more leads for B2G? Not necessarily, but it does help gain vital market intelligence.
Market intelligence helps uncover decision-making processes, determine personas to target, identify upcoming opportunities , understand the agencys needs, and more. In some respects, market intelligence is just as important as a lead itself. It is useful to craft customized messaging, create digital campaigns, and help with other sales and marketing activities.
Another great aspect of B2G sales is that all their information is public. In other words, building B2G lead lists and identifying contacts is easier than in the private sector.
Selling Tech Products To The Us Government
Whats the difference between US Government sales and selling to the Commercial market?
Its like night and day.
Sales and Marketing to the government is truly the flip side of those functions in commercial activities. You really cant believe how different these markets areuntil youve actually come from one sideand tried to go over to the other. I emphasize tried, because it usually doesnt work out very well!
Selling to the US Government is very different from commercial activities
First of all, in the Government world the term marketingis a standard term. But its meaning in the government world is very different from its definition in the commercial world. When you hear someone talk about Marketing to the governmentthey really mean SELLING. Thats in large part because those businesses that deal primarily or exclusively with the government really dont do much in the way of marketing in the commercial markets sense.
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Determine Federal Green Purchasing Requirements For Your Product Or Service
It is helpful when marketing green products and services to the federal government to be familiar with the current federal green purchasing requirements applicable to that product or service category.
The GSA’s Green Procurement Compilation also:
- Provides links to related EPA, Department of Energy and US Department of Agriculture environmental programs.
- Indicates whether programs are mandatory, give a preference, or help achieve an agency’s overall purchasing goals.
- Identifies and links to potential procurement vehicles, such as GSA multiple award schedules, programs and purchasing agreements.
Why Your Small Business Should Sell To The Us Government
One of the most overlooked business opportunities for small business owners is selling to government agencies. Its easy to see why it can be overlooked by some. For many, the process seems tedious and complex. And there is often a lot of competition by larger, better-funded, and more experienced companies. So, why bother?
Actually, the government can be a great customer. It has a number of incentives and mandates to specifically help small businesses. But you have to be smart and think strategically.
You have to be patient and look for the right opportunities. Many small companies have become larger companies by selling goods and services to government agencies.
Big advantages for small businesses
Imagine a customer that has a big budget and buys almost every conceivable product or service year after year. They buy during good times, and they even buy during recessions. Sounds like a great client, doesnt it? Well, government agencies do just that. That makes them an ideal customer for many small and growing businesses.
Another advantage is that government agencies have mandates to work more with small businesses. They want to work with you and will often help you . This can give you an advantage over some larger competitors.
There are some disadvantages
As a business owner, you must balance these benefits against the challenges of working with the government. Only you can determine if this is the right opportunity for your company.
It can be a confusing marketplace
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Government Purchase Decisions Depend Heavily On Fiscal Year Start Dates So Timing And Patience Are Key
As the saying goes, timing is everything and that statement holds true when selling into the government sector. Here are a few questions to think about:
- Where are we in the budget cycle?
- Is there an upcoming election?
- Has the agency released a Request for Proposal or is one upcoming?
Like many other aspects of government, budget cycles vary. Below is a quick snapshot of fiscal year start dates for some government entities:
When generating leads for government, it is good to keep these timeframes in mind. For example, the Federal Governments fiscal year runs October 1st through September 30th. As a result, buyers spend a lot of time in the fall and winter, planning for purchases that will happen in spring and summer. In late summer, a buying frenzy often occurs when buyers need to either spend it or lose it. All levels of the public sector follow a similar pattern each budget cycle.
Sales Activities are Year-round Despite Fiscal Calendars
Although it is important to understand where an agency is in their budget cycle, lead generation is a continuous activity. In other words, do not just jump on the phone during fall and winter. Throughout the year prospects are learning about products to help with their pains and needs. In fact, it is common for agencies to plan years in advance for purchases due to the complex budget cycles.
Do Business With The Military
Find out how your business can search and compete for contracting opportunities within the military.
- Learn about opportunities to sell to the military by contacting the small business office within each branch of the armed forces and Department of Defense.
- Find military contracting opportunities using the Contract Opportunities Search Tool on beta.SAM.gov. Search using the name of the military branch youre interested in working with, or the location of a specific military installation.
- If you are a veteran, check out programs and information specific to military veterans.
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Influencing The Buyer And Building Relationships Before A Bid Or Rfp Is Issued Can Dramatically Improve Win Rates But You Also Need To Be Well
Its important to consider the entire buying team, not simply the designated staff person. Individuals who can be involved on the purchasing end might include:
- Executive sponsor
- Internal champion
During outreach, best practices can include verifying the typical purchase cycle or trigger events, inquiring about their current satisfaction with their vendors, and learning about the key factors that will help influence the buyers decision.
2. Better Understand the Government Agency
Buyers are typically too busy to do extensive research and look for input from vendors who are sincerely interested in that agencys needs and offer useful information. Procurement teams can often be too crunched for time to become knowledgeable about the entire range of products and services they may have to purchase. So when the time comes to tackle a new solicitation, they end up scrambling to catch up, reviewing older contracts, checking with their peers and being open to advice from vendors.
This makes it all the more important for a vendor to take the time to access all of the relevant government contracting resources that are available when preparing for a procurement. Here are a few of the things they should consider:
Timing of purchase: Study budget and CIP documents. Your team may need 6-18 months to market a deal.
3. Consider Teaming Opportunities
Next Steps to Improve on Selling to Government Agencies
Difficult To Jump Between Us Government Sales & Commercial Sales
As you might imagine from the discussion above, its difficult to move between the two worlds. The skill sets and business models which lead to success are quite different. and Thats the reason that most government contractors that have tried to enter commercial markets in any major way have failed abysmally. US government sales-oriented companies typically dont have the entrepreneurial cultures found in commercial high tech companies. They usually lack fundamental Market Evaluation and Product Planning skills required for success in the commercial worldbecause its not required in their core market.
Commercial Companies Selling to GovernmentSo whats a C-level manager in a commercial company which would like to secure some government orders to do? Given the different business cultures of the two markets, it seems pretty daunting. Those poor government guys who have tried to go commercial have had their hats handed to themdoes the same fate await me going the opposite direction?
Fortunately, it doesnt necessarily need to be quite so bad. If you are selling services, or highly customized products, you may need to closely replicate the government-contracting model if you are going to be successful. If you are selling fairly standard products, however, it may be possible to gain significant government business by leveraging your normal commercial marketing efforts.
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Terrified Of Selling To The Us Government Read On
NightDragon strongly recommends emerging technology companies actively pursue the U.S. federal market. We feel there are huge benefits both to vendors and the U.S. government which must have access to leading-edge technologies to support its national security mission.
However, despite the immense potential market opportunity, many small and medium-sized tech companies are often afraid to pursue a U.S. federal sales strategy. Heres why :
1. The complexity of the decision chain is mind boggling. It is often extremely difficult to navigate the complex web of decisionmakers involved in a singular government procurement decision. For instance, one office or component within an agency is often tasked with procuring the technology, whereas another component of the agency is the actual user of the technology. Vendors often do not have full visibility in how a procurement happens, who is involved and what these stakeholders interests are. This lack of visibility is one of the primary reasons the federal sales cycle is so long: veteran sales representatives will tell you success in the federal market takes a three-year investment, minimum.
While the above is true and quite possibly even scarier than I describe if you have a great technology and you believe the government needs that technology, you should pursue the U.S. government market. Selling to the government can have many significant benefits, including the following:
Demo The Problem Not The Product
You have to do your homework in B2G sales. But no matter how much research you do, nothing beats the power of the product demo, in terms of actually getting inside the heads of your prospects and figuring out their actual needs and concerns. In your product demo, youre trying to get all the different buyersuser, economic, and executiveon board to help you push through the procurement process later.
Keep in mind that 70% of local government employees are over the age of 50. You cant just dive into the technical aspect of your product, because a lot of your audience wont know what youre talking about. Dont expect a City Clerk or City Manager to automatically understand what a cloud-based form isor a cloud-based anything is. In your demos, dont start with your product. Start with the bigger picture. Figure out what the current process for managing things is. Marc Ende would kick off the demo by asking:
- How are you currently managing the form process?
- What are some of the inefficiencies that you see?
- Do you have any existing initiatives to redress this issue?
Efficiency is the buzzword that lights up faces during staff meetings. When you sell to governments, sell efficiency. Figure out how you can make things run more smoothly while saving time and money, and youll be on the path to success.
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Government Vendors Can Navigate Unique Challenges By Knowing How
In summary, many aspects of selling into the public sector are unique and challenging. It is beneficial to know the nuances of the various layers of government, their budget cycles, their election cycles, and their bidding processes. Fortunately, we at Growth Orbit have some highly experienced, top talent on our team of SDRs. Their knowledge and abilities have provided great government sector sales leads for several years and they can do the same for you.
Adaptability And Patience Helps In Selling To The Government
If I could describe how to be successful when selling to the government in two words, I would say adaptability and patience. Generating leads is never easy but generating leads in the government sector requires a special acumen. First, there are several crucial factors to take into consideration when selling into this space including:
Many companies see the government as an unlimited market space. Yes, the public sector itself is vast a business can sell to the Federal, State, or Local governments. Then within each, a countless number of departments, offices, boards, and divisions exists. Looking at the local level alone, counties, municipalities , and special districts provide for the specific needs of their populations. Each area then has its own set of departments which serve specific functions for the community, such as:
- Police and Fire Departments
Bigger, however, does not always mean better. With such a vast market, a company can waste a significant amount of money, effort, and time targeting agencies and individuals with no purchasing power. Therefore, defining your TAM , SAM, and SOM are vital to concentrate your time and resources on the best potential buyers.
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How To Sell More To The Federal Government
United States Capitol west front
If you think of the federal government as an industry, then it is one of the top ten industries in America.
So you think you want to add the federal government as one of your high-paying clients.
Be warned. Typically business leaders selling to the federal government have little knowledge of their real buyer or where the contract funds originate.
According to Gene Moran, it can be a real circus.
Moran wrote the most comprehensive book of its type on the three-ring circus of selling to the federal government. His Amazon best seller, Pitching the Big Top: How to Master the 3-Ring Circus of Federal Sales, describes his mastery of the highly complex federal environment.
Moran is the man when it comes to selling to the feds. He has successfully established and increased funding of formal acquisition programs, protected funding of existing programs, and achieved favorable budget, policy, legislative, and contract outcomes for clients.
I met Moran through an author buddy of mine. I asked Moran to share his best tips on selling to the federal government as your buyer.
Approaching the government is much like the allegory of the blind man approaching an elephant, says Moran. It is so big, its very difficult to know what part you are touching. Successful companies elevate their thinking to see across the entire federal funding and acquisition spectrum.