Gov’t Contractors Can Be a Lucrative Prospecting Channel
Where do our tax dollars go? Surprisingly, some go into the pockets of neighbors. If the checks are large enough, this may prequalify them as potential clients.
The $60 billion of federal government assistance authorized in January 2013 in the aftermath of Hurricane Sandy was a reminder of how the government recycles money back into the U.S. economy. Often, this money goes to private-sector contractors — a potentially lucrative client base that too often goes underappreciated by advisors.
To build a larger presence in this professional channel, it can be helpful to pursue the following steps as part of a long-term prospecting strategy.
Identify key government contractors. Firms or individuals authorized to do business with the federal government are identified as certified government contractors. Firms can’t just decide to sell to the government or bid on jobs. They must complete an approval process first. Information about them is available to the public.
List work the government is most likely to outsource. Motorists stuck in traffic are familiar with the federal highway system and its numerous improvement projects. Major contracts for fighter jets and aircraft carriers make headlines. That’s the tip of the iceberg. Old war movies show soldiers on base performing maintenance and general upkeep. Today’s soldiers are on base to train prior to deployment. The government contracts out many on-base services to the civilian sector.
Look for familiar faces. Small and medium-size providers of architectural and engineering services are possible contractors. Construction firms with the ability to hire additional workers and add capacity for large jobs are good too. These firms often subcontract roofing, electrical, plumbing, heating and air systems, and painting, usually to local firms. The owners might be neighbors.
How do you find the firms? The System for Award Management has a “Search Records” feature on the right-hand side of the home page. Once inside, choose “Advanced Search — Entity.” Choose “Location” and enter a city and state. The result set will show a list of firms. The “View Details” tab brings you to an “Entity Dashboard.” Choose “Entity Record” on the left-hand side to view address and contact information. For smaller businesses, the person whom the government talks to is usually the owner. The advanced-search screen referenced earlier also allows users to search by “Socio-Economic Status.” This can segment businesses owned by women, veterans and minorities.
Not every contractor is a prospect. A search for the local market may produce hundreds of firms. Major defense contractors with a local presence get dropped. They are huge. Local pizza restaurants might be certified because they deliver pizzas to federal buildings. Drop those. The focus is on small manufacturing firms and providers of professional services.
Learning about the firm. Visiting SAM.gov tells the viewer the firm can work with the government, when it started and who the contacts are. Advisors will need more information. Manta is one of many resources for corporate background information. Scanning by company name and location on Manta usually yields useful information such as the annual revenue and an employee count. It also lists officers. This data enables advisors to compare the contact names gathered earlier and attach titles to contacts.
Getting in front of them. It’s unlikely they will be responsive to a cold call or accept a social-media invitation from a stranger. Two promising means of access are personal introductions and professional-association involvement.
Successful business owners likely live in the better neighborhoods. Advisors can look into acquiring residential-contact information and ask clients and friends living nearby for an introduction.
The National Association of Small Business Contractors is the industry group for this target market. They have many local chapters across the country. Their dues structure includes a category for experts and educators.
Selling to the federal government can be a very profitable business niche. Many successful local contractors would also likely qualify to be clients.