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.

Are You Selling to Your Favorite Uncle (Sam)?

This economy has driven many companies to the government market in the hopes of getting some of the stimulus package, or just a piece of the annual Two Trillion plus spent by federal, state and local governments.

For those new to the government market, you must understand that this market is very different from BtoB and BtoC, and you have to understand these differences and other market nuances to succeed. If you enter the market without experienced guidance, you will be severely handicapped.

For those of you doing credit card/transactional business, you may already doing business with your favorite Uncle. Credit card orders may not look like government orders, but they certainly can be. Government credit card activity can give you an idea about the potential you have in the government market.

On the federal level, there is a simple test- run the prefixes that only federal credit cards have. Federal Visa cards will begin with either 4486, 4614 or 4716 and federal MasterCard cards will begin with 5568 or 5565. These prefixes are reserved for federal government credit cards.

The federal SmartPay card (aka small purchase card) accounted for $20 billion in activity in federal FY 2009. Purchases made via the SmartPay credit card under $3,000 (the official micro-purchase level for federal spending) require no contracts which is why you may be doing business with the feds without knowing it! A federal cardholder can make a purchase from any legitimate business via the credit card. We know most state and local governments have similar programs, but there are not current statistics on usage.

Many companies want to learn how to start or grow their government business. So far this year I have had about 15-20 inquiries a month regarding either market entry or questions on how to expand existing government business.

In response to the demand, I have re-launched my Government Market Master consulting group. Since the early 1990s, I have advised over 200 companies on growing their government business and several companies still use my consulting services.

If you are interested in entering the government market or growing the government portion of your business, contact me today about the program I am putting together for 2010-2011. Mark@FederalDirect.net

This is a year-long program designed to help any company enter the government market successfully and help those already in the government market grow their government business.

Each member company will have an action plan customized to meet their specific needs in this complex market. This is the plan we will work from during the course of the year-long program.

This program will have a limited number of openings, so contact me now for details and to schedule a time to discuss your needs. There is no obligation on your part for the initial call. It is simply to determine if this program can help you.

So contact me me today- Mark@FederalDirect.net.

This program is designed to be affordable even for smaller companies. The information provided to each member can have a dramatic impact on your ability to grow your government business.