Employ,Strategic,Business,Deve business, insurance Employ a Strategic Business Development Planning Process
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Businessgrowth in the federal market does not happen by accident. Many companies growto a certain point through hard, albeit, rather chaotic efforts. Many arestuck, however, at a certain size, and their ability to compete for new marketshare begins to shrink. We recommend that you implement proper strategies togrow aggressively in the federal market.Thefirst strategy is to employ a strategic business development planning process. There are a few techniques to runthis process; but, essentially, all the key decision makers in your companyhave to get together and answer the following questions: Are you in the right market? What is the market currently pursuing? What are the trends? What is going on with your current customers, and what other customersshould you pursue? What competencies should you develop in addition to what you alreadydo? What growth strategies should you employ? What are your financial goals for the year in sales and bookings? How much should you bid on to achieve the goals you set? If you are of a certain socioeconomic status, such as an 8(a) program,how will you avoid size triggers that will get you out of the program prematurely,and cause you to lose all the great benefits it provides? What are some of the key pursuits in your pipeline you have to win toachieve your goals? What is the budget to achieve your goals? Will this budget be enough?Speakingof budgets, you need to determine how much you should bid on governmentcontracts annually and each month.Your first step is to determine a reasonable goal for your bookings by the endof the year. Bookings are money from your wins that you expect to receive fromyour customers based on signed contracts. Then, you need to determine how manybids you are going to submit to reach that goal. You can do this easily.Simply, take your year-end bookings goal and divide it by your win rate.Yournext step is to determine how many proposals you have to write to reach yourgoal. Forexample, if your goal is $20 Million for the year and your win rate iscurrently 33%, then this means you need to bid on $60 M in contracts to achieveyour year-end goal. How many proposals you would have to write depends on sizeof the efforts. Lets say you have decided youd rather bid on three RFPs worth$20 million, hoping to win one. You could also bid on six RFPs worth around $10million each, hoping to win two. Another option is to increase your win rate byusing professional services companies such as OST to augment your current staff(training, consulting or simply business improvement).Notethat your past performance will also be a factor in your planning, because the government isunlikely to award you a contract with a dollar amount drastically higher thanwhat you have performed on in the past. If you have not managed a primecontract for more than $5 million, it is unlikely that you will get an awardfor a prime contract of $20 million or more. The exception is when you havedone significant preparation to build a compelling case to a specificgovernment customer, and your competitions past performance record turned outto be no better than yours.Inall your planning, you will have to take into consideration that there is a lagtime for government awards.Some awards take one to three months, especially as task orders on MACs. Otherscould take up to a year or two to award.Dependingon the specific opportunities, you might realize that you will have to bid onyour $60 million worth of opportunities in the first two quarters of yourfiscal year to hit the $20 million mark by year end, because you have to givethe government roughly six months to award. Youwill then figure out how many proposals you have to produce per month to getthere. You willhave to factor in your cost and capabilities when making your determination.How many projects can you handle at one time? How many resources can you committo one project? How much money can you afford to commit to going ahead onmultiple RFPs?Whenplanning your budget for pursuits, it is best to use a top-down method. Take the money you havecommitted to business development, or are willing to invest, and divide that bythe number of pursuits you have to have. You should note that for smallbusinesses that work their staff around the clock and where the owners willinvest a lot of their sweat equity, the cost of capture and proposal pursuitvaries from 0.5 percent to 0.75 percent of the total booking value.Your math will be telling during your strategic business development planning sessionwhere you will either adjust your goals, decide to shift resources, or make additional investments. You also might want to continue to subcontract to others a little longer than you had hoped, to reduce your expenses, but do not use it as a crutch. It is usually better to be a prime.
Employ,Strategic,Business,Deve