Business Management 101: Business Development for Businesses and Government Agencies

By Jay Arnold, Jeff Lower

An old boss and mentor of ours used to say, “The only reason anyone in this company has anything to work on is because somebody went out there and sold something to someone.” It sounds like a statement of the obvious, but it is amazing how many companies, and even government agencies, forget they exist only because of their customers.

From Michael E. Gerber’s excellent E-Myth series of books and recordings, forgetting why the organization exists is an example of people caught up working “in the business” instead of “on the business.” Many small firms are created by technical people who know in their heart they can do a better job than their managers, so they go out into the brave new world of business. They often come to realize their technical proclivities don’t translate into sales orders. Moreover, all those pesky forms and reports due to all those agencies, lenders and other stakeholders are not fun to do. The ones who survive quickly learn to formalize their business development activities.

So what exactly is “business development”? Let’s start by separating it from the traditional concept of “sales.” In the context of this article, traditional sales means “order taking” from a list of available products like cars, shrink-wrapped software or t-shirts. This is a true calling and profession for those who do it best (and if you don’t think t-shirt sales can be a profession, we would refer you to the “Life Is Good” example).

But for geospatial services and typical government contracting, we mean “consultative selling,” or truly developing projects from the conceptual phase through contract signing and execution. Business development, then, means working to create a project or program in concert with a customer, and working it from the idea phase through the Request for Proposal (RFP) and proposal process. Typically, this is an 18-month to three-year business cycle from start to contract signing. Of course the business development professional also stays involved throughout the program execution and delivery phases, as well.

Most companies in the government contracting world have some form of business development process, even if they do not call it that. Several government agencies also have to generate business to keep their lights on. People in these roles know generally how to identify and qualify leads and move things along. But formalizing your business development funnel – just like having a good strategic plan – will lead to a higher return on your investment (ROI).

We recommend a business development process that is structured around a “Business Development (BD) Funnel of Opportunities.”  Think of a standard funnel (like one used for motor oil, cooking oil or yes, even beer!), held with the large mouth toward the sky and the spout pointed straight down. With this configuration, a good funnel should be separated into six stages:

1.    The Great Blue Sea: This is the overall universe of potential sales leads within your addressable market or customer base. This is the area above the funnel itself. At this stage you are simply making a list – by name – of your potential customers. This is not everyone in the world, just those in your little corner of it. As an example, if your company provides natural gas line mapping and inspection services to gas utilities in the United States (based on what you defined in your strategic plan), then your Great Blue Sea would NOT include electric utilities, nor would it include gas utilities in Canada or Zimbabwe. By clearly defining your addressable market, and adhering to your strategic plan, you will eliminate a lot of wasted effort and time spent trying to boil the ocean.

2.    Provisioning: The Provisioning phase is where you identify particular opportunities for potential customers. At this point, the conceptual outline of a project or program should be coming together between the customer and your team. Typically, this occurs at least a year before an RFP hits the street. The customer has to generate a budget and a technical specification, and often release a Request for Information (RFI) to formulate a solid RFP. You and your team have more steps to complete before the RFP arrives on your desk, too. You should spend your time considering teammates, identifying technical requirements, talking with potential project managers, and in general, selling the program internally at your company.

3.    The Quest: At this point you have loaded the supplies on your boat, pointed it in the right direction, and launched. There still is no RFP, and you are not 100% certain the eventual RFP will be what you expected. In reality, you do not yet even know for sure that an RFP will be released. You just know you are out there in the correct general area, going about your search. You have a team in place, and are putting them through the testing stage, realizing there may be need for adjustments and hot-swaps while underway. You should have a pretty good idea of what the RFP should include, and not include, and therefore what resources you will need.

4.    Targeting: At the Targeting phase, you now are 90% sure the RFP will be released and that it will be released within a given calendar month (or at least quarter). You should formally execute all teaming agreements, have your own resources identified, and have any capital expenditures budgeted and approved. You also should send out data requests to your teammates for boilerplate information such as resumes, equipment lists, technical approaches, graphics, photos and similar supporting materials. You should know what your strengths are for the specific project, and if pricing is involved in the selection process, you should have buy-in from your management and your teammates regarding the cost strategy. At this phase you also should know who your competitors will be, and in general terms what their strategies will likely be.

5.   The Proposal: Once the RFP is released, you should be well on your way, with internal draft proposals – or at least a good outline – already written. Your pricing should already have been approved, so you can simply plug in the line items to calculate costs. Your project manager should be completing the staffing plan with his or her team, and editing any technical write-ups to match the specific language in the request. Your proposal manager should be conducting daily calls with the team (maybe not with non-exclusive teammates, but that’s another discussion) and coordinating any last-minute updates with the capture manager (i.e. person responsible for bringing in the business) and business development lead. Final competitor analyses should be finished so that any altered proposal strategies can be applied. You should plan to have your internal proposal reviews completed at least five calendar days before the proposal is due. That will give you time to make final adjustments and still deliver the proposal a day ahead of the deadline. Remember that not everyone on your team has to be involved in every decision and every aspect of your proposal. Focus the right people on the right things at the right time and great things happen.

The Proposal phase also includes things like short-list interviews and Best and Final Offer (BAFO) negotiations. Even sometimes (with commercial customers or under certain allowable situations with the government) - as another boss and mentor of ours taught us - you may have a request for BARFOs (Best and Really Final Offers!).

6.   The Win: Once you have done all you can do, you must wait for the good news. There are different rules that apply for different customers, but typically you are only allowed to correspond with the single point-of-contact identified in the RFP. When the good news comes, throw a Win Party. But in this day and age, be prepared for potential bid protests. And if it is an Indefinite Delivery Indefinite Quantity (IDIQ) contract, begin revving up to work the BD Funnel process for each task order under the contract vehicle. A big win on a large contract will be something for you and your team to celebrate and enjoy into the future as your business grows.

The BD Funnel can improve your win rate and your backlog forecasting. The entire team needs to buy in and get onboard well ahead of the RFP’s release. If you are really doing business development and not just reacting to RFPs once they are out, then you have a much better probability of winning the business. If you really did your job, you helped define the needs of the customer and the program or project by responding to RFIs and getting ahead of the pack.

Published Wednesday, April 20th, 2011

Written by Jay Arnold, Jeff Lower

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