Commercial cash flow

By Fred Geyen

February 03, 2012

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Increasing revenue is typically the number one goal of any business.

There is a saying that most of us cannot see what we need because it is right in front of us or in our own backyard.

That seems to be true for doing work with the government, because for good or bad, government is everywhere and can increase revenue for your business.

Although all of us have an opportunity to work with a local government in our area, there are mainly two reasons why many avoid this type of work.

First, it can be a challenge to get through all the challenges of the bidding process, mainly the paperwork. Second, it''s normally considered "smaller margin" business when it comes to profitability. The first challenge can be overcome with diligence and patience; the second needs more attention to how your company operates and what your own business goals might be.

The paperwork

To some, the definition of what it means to do work with the government can be summarized by one word, which is "paperwork."

Because all government agencies are under a watchdog effect by citizens and news media, everything must be documented, documented, and then documented again… all of that adding more paperwork.

You must be willing to accept this challenge and then move through the morass of documents and forms that are inevitable with working with government.

Smaller margins

The reason government work is normally at a smaller margin is because it is done on a bid basis, much the same way that large corporations operate.

When you are involved with a request for proposal (RFP), you and your company will be in a weak position in bidding low enough to get the business.

This does not mean you should not pursue this type of business; just understand how it fits into your own personal business plan.

Getting the work

The easiest way to start working with government is to treat "them" like a regular private company. Although it is government, it is run by people and that''s what you must keep in mind.

So whether you are dealing with a federal, state, county or city government, you start with the same question. You find out who purchases carpet cleaning and ask them what the requirements are in order to give them a proposal.

This is going to lead down one of two roads, with the first road being the easiest, which is: "Go ahead and give us a bid." Under this scenario, that particular government agency is under no mandate to set aside the business to a special group. This can be true at the federal, state, county and city government level. The carpet cleaning contract can be awarded to anyone.

The second road that you may encounter is that the carpet cleaning contract is awarded based on certain criteria set up by that government agency. You will have to meet the qualifications established by government officials, which may range from income levels, residency or small business status. These qualifications can change from city to city, or county to county.

You may hear someone say, "Our hiring practices are mandated by the government," or "We have to hire small businesses," or "We have to hire minority companies."

The correct answer is that governmental agencies have to have hiring practices for employees of the government that are nondiscriminatory — exactly like each of our own businesses.

Notice that we are talking about employees, though… not contractors or outside vendors. Each agency can choose how they hire contractors or vendors. They can choose which qualifications they prefer.

State, county and city governments will not normally admit it, but they really do follow along the lines of the U.S. Federal Government''s Small Business Administration (SBA) program. The SBA is all about helping small business compete fairly with large businesses.

But remember, the SBA only governs the U.S. Federal Government agencies. City, county and state governments set their own rules of what it means to be a minority, woman owned or disadvantaged business. You may need to have qualifications at all four levels and then individually for each city and county that you want to work in.

They are also concerned with helping particular classes of small businesses, including woman owned, veteran owned, disabled veteran owned and disadvantaged area businesses involved with the HUBZone program.

Their own rules

You need to remember that each agency puts itself under its own rules. You have to play by these rules.

All of the government agencies work with big business, awarding contracts any way they choose. It comes down to picking certain business sectors that they want to award contracts to.

One of the business sectors, besides construction, that is chosen to be a candidate that is "set aside for small business" is cleaning, normally janitorial.

It seems most government agencies find that people from all walks of life are able to get into the cleaning industry. And it''s easy for them to find disadvantaged businesses to award contracts.

When they choose to set aside a contract for minority or disadvantage businesses, you have to meet those qualifications. Cities, for example, may require that you have to be a resident of the city. Counties can do the same.

Three necessary steps

In a nutshell, there are three main things for you to consider in obtaining government contracts:

1. Talk to the government agency you want to work with and find out which qualifications they have. If no specific qualifications need to be met, treat them like any other customer.

2. If they have qualifications and credentials that need to be met, fill it all out and get it approved by the agency that''s asking for it. This is where most cleaners stop. Rightfully so, because this is going to take a lot of work and the outcome is uncertain.

3. After all your paperwork is approved and you are certified, you now treat them like any other customer. All the paperwork accomplished was to allow you to talk to people. You still need to conduct your sales process like you always do.

Never forget that these government agencies have people awarding contracts to people they know and trust. There will be a lag time, so hang in there.

The bid process

You wind up doing all this work to be in a bid situation. Normally, you can find out what the last bid was by looking back in the records.

The RFP will normally be set up for the current vendor to keep the business. Most of the time, the current vendor helps the government agency write the RFP, just like private businesses do. It''s common to set the RFPs up so other vendors have a hard time qualifying. It is what any of us would do, if in the same position, to try to protect our businesses.

Get started

Good luck in your efforts to get government work.

It will be like many other commercial carpet cleaning job finding chores, with a few twists. It will take commitment and tenacity to win this work.

Look at the website www.SBA.gov for more information that can help you with obtaining government work.

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Fred Geyen is president of the Geyen Group (www.GeyenGroup.com). His background includes commercial product sales and program development for residential, commercial and disaster restoration with ServiceMaster. He has a Leadership in Energy and Environmental Design Accredited Professional (LEED-AP) designation and is on the board of directors with the LMCCA. Geyen can be contacted at (612) 799-5111.