The government spends billions of dollars each year on goods and services, and by tapping into this vast marketplace, small businesses can secure lucrative deals, gain steady income and heightened visibility. In this episode of The Agent of Wealth Podcast, host Marc Bautis and guest Richard C. Howard dive deep into the world of government contracts.
As a career military acquisitions officer, Howard oversaw $82B+ in DoD contracts, and has advised and trained over 400 companies as a consultant. He’s the CEO of DoD Contract – which guides, trains, and mentors small business owners and sales executives through the government sales process – and the host of DoD Contract Academy Podcast.
In this episode, you will learn:
- The benefits of selling to the US government as a small business.
- How small businesses can find opportunities to sell their products or services to the government.
- How small businesses can stand out in the government procurement process.
- How small businesses and startups can utilize the Small Business Innovation Research Program.
- And more!
www.dodcontract.com | DoD Contract Academy (Podcast) | Usaspending.gov | Sam.gov | Small Business Innovative Research Program | Bautis Financial: 7 N Mountain Ave Montclair, New Jersey 07042 (862) 205-5000 | Schedule an Introductory Call
Disclosure: The transcript below has been lightly edited for clarity and content. It is not a direct transcription of the full conversation, which can be listened to above.
Welcome back to The Agent of Wealth. This is your host, Marc Bautis. I’m joined by a guest for today’s episode, Richard C. Howard. Richard is a leading authority on US federal government contracts. As a career military acquisitions officer, he oversaw $82B+ in DoD contracts, and has advised and trained over 400 companies as a consultant. Richard is the CEO of DoD Contract, which guides, trains, and mentors small business owners and sales executives through the government sales process.
Richard is the host of the DoD Contract Academy Podcast, and speaks extensively on the nuance of federal contracting strategy. Richard, welcome to the show.
Thanks for having me on, Marc.
I don’t think people even realize that government contracts are out there. Can you start off by explaining this market size, and some of the benefits of selling to the government as a small business?
The Benefits of Selling to The US Government as a Small Business
The US government is the single biggest purchaser of goods and services in the world. When people think about government spending, most immediately think of big defense contractors. But in reality, the government buys just about anything you could think of – from defense and weapon-related spending, to tai chi instruction, to commodities, to food. Think about it like this: Every military base is basically a small town, or city in some cases. All of the infrastructure that goes into that town or city is paid for by the government. And they have a mandate to buy from small businesses.
So whether you’re in – cybersecurity, accounting, legal, you’re selling food, you have a franchise, you have a training business – the government is most likely buying in your area. It is very rare that I find an area where the government isn’t spending money, so the spending is vast.
The government has to buy from small businesses, yet less than half of 1% of US small businesses are actually participating in the government contracting process, despite the high spending levels.
Alright, so there’s a lot of opportunity here. How does a small business find the contracts?
How Small Businesses Can Find Opportunities to Sell to The Government
Because we’re talking about the government, there is a lot of regulation that exists to ensure there’s fairness and that the public can see what the government’s doing. So everything the government spends money on – with the exception of a couple classified contracting avenues – is public knowledge.
So, as a small business owner, you should ask, “Does the government buy what I sell?” To find your answer, go to a website like usaspending.gov and begin searching public records to find out what the government spends on.
Whatever you sell, it probably falls under something called a North American Industry Classification Code, or NAICS code. When you go into usaspending.gov, type in what you sell under NAICS – for example, accounting. The website will suggest different codes that you would fall under. You can click on that, and sort it by small business spending.
You can quickly see how much the government spends on small business contracts in your industry and area of focus.
Are these contracts location specific? Does it help if a business is located near a military base, for example, or does it not matter?
It depends on what you’re selling. By the way, government contracts certainly extend past the Department of Defense and military bases. There’s lots of different federal agencies that spend money.
Okay so once a business owner discovers how much the government is spending in their niche, what’s the next step?
Once you know that the government buys what you sell – if it’s local, they buy it in your state, or if not, you can work anywhere – the next step is to register your company. You can do that at sam.gov. That’s where all registering and most of the solicitations take place.
So when you go to sam.gov, you’ll find instructions on the screen for registering. Of course, you need to have a legal business in the United States, and come ready to register with your EIN number.
All in all, the process takes a couple weeks sometimes, but at the end of it you’ll get what they call a CAGE code and UEI number – these are federal identification numbers for your business. Once you have those, you can start bidding on contracts.
By bidding, do you mean writing proposals?
How Small Businesses Can Stand Out in the Government Procurement Process
What can a small business do to separate themselves from the others trying to do the same thing?
Good question. This is really where most companies fail in selling to the government…
Once your business is registered through sam.gov, you will begin to see what’s called a request for proposal, or RFP. At that point, a business can begin writing a proposal. But, the government is very regulated in how they buy products and services.
For instance, if I saw an RFP come out that the government is looking to buy a $3 million landscaping contract for base X, I can’t just pick up the phone and talk to someone to get my questions about the contract answered. Now, if it’s a big contract, the government will answer most questions publicly through sam.gov. In those cases, you might get some answers that can inform your proposal.
But otherwise, you won’t be able to set up a meeting with a government worker. You won’t be able to develop a relationship…
So, before the RFP comes out, there’s something called the market research phase. Let’s say you’re a software developer, and the government is putting a command and control platform together, and you have a great user interface for that. Well, it’s during the market research phase that you can engage with the government if you really want to have a shot at landing the contract later on. Meaning, before the RFP comes out, we want to know who is doing the purchase, and we want to know the details of the opportunity ahead of time.
If you want to differentiate yourself from the rest of the herd, you want to look for things like a request for information or sources sought. When those come out, they’re squarely in the market research phase. At that point, you can set up a meeting with the government.
I recommend small businesses to respond to requests for information. They’ll answer questions like:
- How long have you been in business?
- Do you have past performance?
- What do you think of the approach the government wants to take?
And, you’ll be able to suggest things. For instance, when you register your business, there are different certifications. Examples include:
- Small business certification
- Woman-owned small business certification
- Disabled Veteran-owned small business certification
If you happen to have one of those certifications, you do have a leg up, because the government needs to set aside a specific percentage of contracts to those certified businesses.
But, back to the market research phase, you can actually recommend that the government lists the contract for a specific certified group. So, you’re helping the government write the solicitation, and you can give yourself a leg-up if you suggest a certification you have.
Okay, so you’re trying to influence the decision a little bit. Have you ever seen a case where a small business had a product or service that the government isn’t spending on, but they propose it to them?
Yeah, there are a couple of ways to do that. I would say if you take away one tip on selling to the government, it’s to get meetings and build relationships with the people that actually buy what you sell. There’s a lot of ways to do that, but mainly through research.
If your business sells a product or service that the government is not actively looking for, but you want to sell to the government, the government needs two things: A requirement, and funding.
The Small Business Innovation Research Program
If it’s an innovative solution of some kind, for example a patent, you can go after something called the Small Business Innovative Research Program, or SBIR. Any government agency that spends a certain amount of money in research and development has got to contribute to this program. So, the SBIR program spends about $4 billion a year on innovative research and development contracts with small businesses.
This is a way to basically propose your product or service to the government, because they have funding in the SBIR program. If the review panel thinks that what you have is innovative, and that it would achieve a government need, you can win one of those contracts.
Phase one of SBIR is kind of low dollar. Let’s say, for example, you’re creating a VR training system. In that case, phase one might just be a feasibility study. You might propose that the government uses a VR or augmented reality training system to help maintain or fix aircrafts, for instance. Well, that might resonate with the board. That first phase one event is probably going to be somewhere around $100,000-$150,000, which is small for government contracts.
But, what you’re really doing is:
- You’re establishing past performance with the government, because now you have a contract.
- They’re now going to help you find people in the government that would potentially sponsor you.
Now you can’t totally rely on the government SBIR office, you also need to put yourself out there to find a sponsor. If you find somebody willing to sponsor, but they don’t necessarily have to have money, they just sign a memorandum of understanding for you to go to phase two.
Phase two is to develop a prototype, or set up a demonstration. There could be a lot of different things that you’re recommending, but that’s the phase two piece.
The Small Business Innovative Research Program is really great for getting your feet wet. Even if you have a developed product but you’re modifying it for government use, that would also qualify for the program.
Going back to finding these opportunities, my father actually had a government contract through a larger corporation. He created a pellet that went into 50 caliber ammunition. He wouldn’t get the government contract himself, but General Dynamics or Olin would go through him to create this component of their contracts with the government. Are there opportunities like that out there?
Yes. That’s a really good point. There is a variety of ways the government can buy things from a small or large business owner. For example:
- Sole source contracts.
As a business owner, you need to understand how the government is buying what you’re selling. That’s something that you can do pretty easily with the research tools the government offers.
Let’s say you own a company that is licensed to do HVAC. Over time, you’ve built a relationship with the government office that purchases contracts in construction. From that relationship, you learn that next year, Hanscom Air Force Base is going to be building an office building, and you have interest in installing the HVAC system. But, you aren’t able to take the full construction contract.
What I recommend you do is look through a website like usaspending.gov to see which construction companies have done that type of work with the government – illustrating past performance – and reach out to them about this upcoming opportunity. The fact that you’re bringing them this opportunity sweetened the pot for them to work with you, involving you in the project.
If you reach out to three companies like that, you’ll get at least one or two bites to form an agreement and go after a large contract together. That’s very helpful for a small business, because the big company can handle the proposal writing, and so on.
Artificial intelligence is all the rage right now. Do you see AI being used to uncover some of these opportunities, or to help small businesses in this process?
It’s interesting that you bring that up. Two of my recent episodes on the DoD Contract Academy Podcast were about AI in the government space.
One of them is called Govly, which uses artificial intelligence and machine learning to enable government contractors, OEMs, and distributors to accurately plan for government purchases years in advance
The other is called Rogue, which is an AI tool specifically designed to help businesses write proposals for government contracts. It kind of works like ChatGPT.
Business Financing and Government Contracts
What happens if a business needs financing to fulfill an order from the government?
First, it depends on the contract. If it’s a SBIR contract, where the business is developing something for the first time, then you can win the contract before you have to start development. But those are research and development contracts.
So let’s say you win a small services contract that involves employing 20 people. The small business will have to pay those individual employees before the government pays the small business. That’s because there’s about a 90 day turnaround time on invoicing to the government.
Now, there are certain financing houses set up specifically for government contractors. One thing to know is once you win that government contract, it’s one of the most secure contracts you’re going to have. So a lot of banks know they can count on the government paying the business.
That’s also one of the reasons companies go after government contracts – because it increases the value of your company.
Are Government Contracts Recession-Proof?
In addition to AI, the other thing that we’re constantly hearing about is this looming recession. At a high level, how is government spending compared to other industries?
Government spending is more stable. I always recommend that business owners – small or large – have one stream of income from commercial sales and another stream of income from government sector sales. The government is spending year over year, whether there’s a recession or not.
But I would say that the government experiences difficulties in different ways, and typically at different times.
Usually, if you have a three-year government contract, for example, you’ll receive that funding month over month. Now, there are times when the government shuts down, or when there is sequestration. The government can terminate a contract for convenience. But if they do, there are regulations to protect the companies that held the government contract.
That’s good. Well, we’re just about out of time. Richard, thank you for joining me today. You did a great job explaining how businesses can leverage government contracts as well as how to navigate the government procurement process. What’s the best way for our listeners to contact you or learn more about your advisory coaching services?
Your listeners can go to dodcontract.com to schedule a consultation. On the website, we also have courses available. And of course your listeners can check out my podcast, DoD Contract Academy, on whatever platform they like to listen on.
Great, we’ll link to those resources in the show notes. Thanks again, Richard. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review on the show.
Improving someone’s image deals with more than just the clothes they wear; it highlights their personal brand. Choice of dress, overall behavior, business and dining etiquette, and body language all contribute to the image they portray to others.
In this episode, Marc Bautis welcomes guest Sharon Kornstein, owner and founder of Image Design Consulting, to discuss ways you can start improving your image today. We’re all going to be back in the office soon and this conversation will assist anyone who is seeking to improve their personal image in a timely, affordable, and comfortable manner.
In this episode you will learn:
- How image consulting works
- How many business outfits you should have in your closet
- How often there are changes in trends
- What is important to look for when adding to your wardrobe
- Common image mistakes that people make
- What to wear to a job interview
- What is a virtual closet?
- And more!
Tune in now and be inspired to look and perform your best!
Bautis Financial: (862) 205-5000 | Image Design Consulting: (973) 433-7142
Are there other components of an image (other than fashion) that someone would look to improve if they wanted to improve their image?
There are several aspects to it. How you dress is important, but it’s also behavior, business and dining etiquette,body language, and nonverbal communication. It really all fits in together.
Fashion is one of the components. I like to talk about it more as your personal image. Personal brand is a big term right now, but it’s kind of a part of your personal brand because it’s how you look. You want to reflect you: your lifestyle, your job, your goals, your values. So you want to be fashionable, but you also want to be authentic.
What are some benefits of image consulting?
Gaining confidence is one. I help people feel better about themselves, and I help them control how others react to them. When you walk into a meeting, if you know you look the part and look your best, you feel more confident. Then, it is reflected in your actions and behaviors. It is also reflected in the person that you are speaking with; they get that feedback and it is a back-and-forth kind of thing.
What point does someone have to be to embrace image consulting?
It is all different points, but it is usually people who have experienced some kind of transition where they change firms and they feel like they need to dress a little differently to reflect the new firm. Or, maybe they have been in a situation where they have felt underdressed, they felt under-groomed, or they did not have the right outfit in their closet. In addition to helping people feel their best, I save them time and I save them money because they do not buy things that they do not end up wearing.
How does it work
It is a consultative approach because it is not a “one size fits all” kind of approach.
- First, I talk to people (whether it is on the phone, in person, or online) to find out what they exactly want to achieve and what is not working with their current wardrobe with a questionnaire.
- The next step is to meet them at their home and spend a half-day or so going through what they have in their closet.
- Then, we will come up with a shopping list and take them shopping.
What are some common mistakes that people make in fashion?
Fit and quality are really important. One mistake people make is that they sacrifice quality in terms of either having a lot of clothes in their wardrobe, or really trying to save money. The fact is that if you buy poor-quality clothes, you lose out in a couple of different ways because they do not last, you will end up replacing them in 6 months- a year, and they just really do not reflect well on you.
What is a virtual closet?
It is a specific software program that allows me to take pictures of my client’s wardrobe. Then, I’m able to upload all of their clothes in the closet. When I say virtual closet, it is just a digital version of their closet; they can look at it online with a specific link. They can see all of their clothes in separate pictures.
If they have an event, like a wedding, I can tell them what to wear to the wedding. Or, I can tell them what to bring to a conference in Florida so they do not over-pack and what to wear there.
As time moves on, and they want to add to their wardrobe, I can make recommendations from online websites. I can give different examples of different price points. The advantage of being registered for the closet is that you can click on the picture of the one you want and then you can buy it right there.
Who do you most commonly work with?
The most common client I have right now is a man or woman in their 40s or 50s in business who does not have time, has a very varied life, who does not want to spend their Saturday at the mall all of the time. They hire me to come in and create a wardrobe for them that they are comfortable with, that is flattering, that is in their budget, and it is easy to wear.
What types of help would someone graduating from college in terms of building their personal brand?
When you graduate college, presumably, you are looking for a job and you are just getting in your career. I help people in their 20s define a certain style for themselves and learn how to proceed going forward with their wardrobe.
In addition to the wardrobe, there are different etiquette situations that they may find themselves in, whether they are interviewing, trying to get clients, or just speaking. I help them through all of the nonverbal communication aspects of business etiquette.
What goes into dining etiquette?
A lot of second interviews are conducted over a meal. Specifically, employers are looking to see: is this someone that I could introduce to clients or pull into a meeting spontaneously?
I will go into a school and talk about the place setting, the use of silverware, nonverbal communication to communicate with the waitstaff. I talk to the students about that and not only does it help them make a good impression on potential employers, but it also helps them if and when they do find themselves in that situation.
Do you help people as well with interview skills?
I do help with interview skills. I also help them decide what to wear to an interview, especially if it is business casual. I talk about:
- How to greet someone
- Have eye contact
- Engage in conversation
In terms of dress:
- Start at the assumption that you will wear a suit (for a man) and a jacket (for a woman). You have to be 100% sure the company is casual before you do not wear a jacket on an interview.
- Sometimes, they give you guidance on what to wear, so you can believe that. But, maybe dress a touch nicer than what they direct you to.
- Do not be concerned if you are more professionally dressed than the person that you are speaking with. You are the one who has to make the good first impression.
Sharon, thank you for being on the show. How best can people reach out to you?
The name of my company is Image Design Consulting. My website is imagedesignconsulting.com. You can give me a call at (973)433-7142. You can email me: [email protected]. I am also on all of the social media: Instagram, Twitter, Facebook Business, and Yelp.
Thank you for listening, everyone. This is Marc Bautis. Have a great day.