RSM Federal Articles
RSM Federal's articles are designed to assist in educating our clients, partners, and the media on topics that impact small businesses that support or plan to support the Department of Defense and federal agencies. If you have an idea or would like us to write about, please let us know.
A socio-economic status is a powerful differentiator. That's it. It's a differentiator.
My team has worked with thousands of companies and this is a common challenge and misperception amongst small businesses.
Tell me if this sounds familiar?
- Business cards where your socio-economic status logo is just as large as your corporate logo?
- When you look at the homepage of your website, all of your socio-economic statuses have logos that are built into the top graphic of your homepage or they are elsewhere on the page... and they're at least an inch in diameter?
- Your capability statement (line card, project list, etc.) has your socio-economic logo(s) at the top where it's the first thing you see when you look down?
- Your website and marketing materials start with, "We're a small woman-owned business that provides..." or "We're an 8a, woman-owned small business that provides..."
- When you walk into a meeting with a prospect or potential teaming partner, you start your 45 second introduction with "We're an 8a or woman owned or service disabled veteran owned... etc."
In general, this is the norm for many small businesses. I'm going to explain why it's wrong, why it minimizes the value of what you provide, and how you should communicate your status. Don't take my word for it. Our Federal Access Members have won more than $1.5 Billion in small business contracts since 2011.
Yes, I know - this is what you've been told to do. Small business offices, your mentors, your colleagues, and the various non-profits funded by DoD and your local community all tell you to, "Put it front and center! There are federally mandated set-aside levels for your company! Larger companies and potential partners have sub-contracting plans that require that they team with companies just like yours! Use your status!"
This does NOT make smart business sense and I'll explain why.
Softly Communicate Your Status
For the last three years, I've supported the SBA's Emerging Leader's Program. As part of that support, I work alongside various state and federal contracting officers, associations, and organizations that focus on supporting the small business community. During a class, several months ago, I made the point that regardless of market (commercial or government), you need to "softly" utilize your socio-economic status(s). The Director of one of our local non-profits, that focuses on helping small businesses get into government, very forcefully told the class that I didn't know what I was talking about. I sat there and waited for someone to ask why? Eventually someone asked me to explain and when I did, every business owner in the class agreed. For the Director of our local non-profit - it's not her fault. It's how she was trained, how she trains her counselors, and it's why most small businesses start most introductions with their status and size.
Think about this:
A prospect (government or commercial) buys from you because of the value you provide. It's not because of your products or services. There are hundreds of companies that sell what you sell. It's not because of your socio-economic status. You can have two or three statuses but if you don't convince your prospect that you're competent, your status doesn't matter. Not to mention your status is not as strong a differentiator as you've been led to believe. Sure, it's a differentiator but you don't win contracts because of it.
It's not what you sell. It's the value of the products or services that you provide. It's not the statuses or certifications your company holds. Those are just regulatory buckets. Yes, the government can sole source 8a contracts. Yes, the government can sole source 8m (WOSB) contracts - but you can read an earlier post about how unlikely and difficult it is to actually win an 8m sole source contract. Your company will NOT win a set-aside contract if you don't convince the prospect that the value of what you provide is outstanding.
Now some of you are thinking, "These are just semantics." To some extent, you're correct. But from a business perspective, this is more than semantics. It's about how you approach the market, position your company with prospects and partners, and how you differentiate a level of maturity that is not commonly found in small business.
What Happens When You Focus On Value
One of our Members asked for help preparing for a meeting with a senior contracting official at Fort Leavenworth in Kansas. We discussed how to approach the meeting and how to follow-up. Most important, we told them not to mention their socio-economic statuses during their 45 second introduction. (They are 8a, WOSB, and Native American.) The meeting was going well, the business owner gave a short overview of the company, immediately took control of the discussion, and about 30 minutes into the meeting, it came out that she had multiple socio-economic statuses.
The contracting officer leaned forward and said, "We have contracting goals that require that we work with companies like yours. Why didn't you tell me you had all these statuses!"
She said, "Because that's now who we are. That's not the value we provide." The contracting officer leaned back and said, "That's the best answer I've ever heard."
Until that point, the owner focused on collecting intelligence and communicating the value of her products and services. There are so many other techniques and strategies that had a role during this meeting but that's for another time.
Just remember this - it's not what you sell. It's not your socio-economic status. It's the qualifiable and quantifiable value that you communicate to your prospects and partners. Don't worry, you're socio-economic status will eventually come into every discussion. But you should never lead with it! Do the capture managers for Northrup Grumman or Lockheed Martin introduce themselves as, "Hi, I'm John with Lockheed and we're a large business that provides..."? Of course not. They rely on their past performance and the perceived value of their company. Yes, we all know they're a large company but why do only small businesses introduce themselves with their size?
Yes - this is commonly accepted and taught to most small companies. But from a business perspective, it makes little sense.
This is why you don't put your status on the front of your business card; why you don't put it front and center on your homepage, and why you should stop introducing your company as a status.
You're not a status. You're a company that provides value.
Joshua P. Frank is Managing Partner for RSM Federal, founded in 2008, a federal coaching and business-acceleration strategy firm that helps businesses in accelerating the education, techniques, strategies, and processes necessary to winning government contracts.
This article referenced the Federal Access Program.
For more information, visit http://www.rsmfederal.com