What to do when the budget shrinks?

I just received a question from a client who sells products to the government. Clearly this person, and their corporate management, were worried about the current economic and political climate - as are we all.

The question is: With budget cuts looming on a federal level, what might be a few things to say to management that would sound “good” to justify why the Government sector will continue to grow?


I think my answer was realistic, but optimistic, at least for the savvy.

I don't think the sector will grow, but I think the "shrink" in the government market will be less than anticipated and also less than other market sectors. Further, I think that the more savvy players will grow their market share by eroding the market share of marginal and less sophisticated companies. Many companies do this as a matter of course, but those ranks will swell in the current climate.

If you have any small business status,  now would be the time to truly try to maximize the value of that status with your current government accounts, and perhaps with accounts that have lapsed within the last 18-24 months. I would also go to a few agencies that have needs for your products or services and make certain they know who you/your company is, and what you bring to the table. If you have no connections at those agencies, go through the OSDBU office. The OSDBUs are not just there for e the "newbies" - they will actually enjoy visits from seasoned professionals.

I think some companies that have been marginal in the market will leave or fold, and create some market share that will have to go somewhere.

Your thoughts on this are welcome.