Around the time a small business is thinking about putting an 8(a) application together, the firm should also be strategically thinking ahead to what they will do once they obtain their 8(a) Certification.
New 8(a) firms need to realize that they are not all created equal, and make adjustments to their strategy accordingly. Some firms will have an easy time breaking into the federal marketplace, while it will be slightly more challenging for others. With that said, the average 8(a) firm was between $6MM and $8MM in revenue over the last few years, so the odds are in your favor.
In order to assess your firm’s strength before you enter the program, you should look at the following five factors which will determine your success:
2. Geographic Location
3. Past Government Experience and Federal Contacts
4. Size of the Firm when Entering the 8(a) Program
Over the years I have worked with many firms that have lacked the first four factors, and I wasn’t even too sure about the fifth “luck” factor for them. But with some good federal analysis, some initiative, and the ability to listen, I was able to put some “lipstick on those pigs” and help get them federal sales. (I say that endearingly)
Some of the helpful 8(a) marketing tips I go through with clients on what feels like a daily basis:
1. The 8(a) Certification is the crown jewel of Federal Certifications. No other Certification, when utilized properly, can build a business faster, period, bar none.
2. The SBA can be a useful resource for obtaining your initial sales, so take full advantage of them, but you also need to do your own federal business development.
3. It is typically easier to obtain sales slightly out of your niche with a federal contracting officer you know, than to be in your perfect niche starting over at a new agency.
4. Go where the dollars are in your industry. For example, the Department of Defense is responsible for 80% of federal construction spending. Therefore, if you are in construction, market to military facilities.
5. Contracting vehicles can be “King Makers”. For example, earning a place on an upcoming IT GWAC such as 8(a) STARS can be worth millions in sales to an 8(a) IT firm that wins a spot.
6. Sign up with major federal prime contractors early. In year five of a firm’s 8(a), the firm must show progress in weaning itself off sole-source 8(a) sales. Using your 8(a) for obtaining federal subcontracts with a large prime is a great way to achieve this. Remember, recent numbers show $135B in annual small business federal prime contract sales, $75B in annual small business federal subcontracting. Subcontracting is a very large pool to play in.
7. Use a sniper not a shotgun approach to federal sales. Firms that can put together the lists of federal contracting officers that have purchased your goods or services in the past two years had proven to be invaluable. This is a much more efficient way of connecting with federal contracts.
8. Watch your older 8(a) competition. Remember, after nine years the clock hits midnight, and Cinderella’s 8(a) carriage becomes a pumpkin. Many 8(a) contracts are continuously renewed as 8(a) set-asides again. A graduated 8(a) firm is likely not able to renew its federal contract. These contacts can be low hanging fruit for a new 8(a) firm to go after. If you are unsure if you have all the capabilities needed to perform on the contract, creating a joint venture with the incumbent 8(a) firm is a win-win for all.
Obtaining success in the 8(a) program is more than just submitting an application. A comprehensive 8(a) plan needs to be formulated before a firm enters the program, if full benefit is going to be taken from a firm’s nine years of 8(a) BD Program eligibility.
If you are wondering specifically how the 8(a) Certification could be an advantage to help expand your business through federal contracting, I always recommend contacting an industry expert such as ez8a or Advance 8a. Neither charge for an initial consultation.