7 Critical Questions Government Contractors Must Ask in Q4 FY 2024

Every year, defense and civilian agencies across the US federal government ramp up their spending at the end of each fiscal year with tremendous contract opportunities for small business contractors – especially 8(a) firms and minority-owned government contractors.

👉 DID YOU KNOW THAT 67% of the 16,116 Sole-Source contracts awarded in FY2022 were awarded in the 4th Quarter?

If your company is procurement-ready with past performance, you should be pursuing these year end contracts either as prime contractors or subcontractors.

Notably, the US Army awards more end of year contacts than any other federal agency.  If you're a prime contractor with experience, then it's not unrealistic for you to pursue prime end of the year contracts.

If you don't have any experience, especially federal prime experience, you can still pursue end of the year revenue by subcontracting and teaming with other companies.

Here are the 7 most important questions that will determine your sales-readiness

1. What is Our 2025 Revenue Goal?

2. What is Our 2024 Sales Goal?

3. What is Our Win Rate?

4. How Many Proposals Do We Need to Submit?

5. Do We Have Enough "Slam Dunk Opportunities" In Our Pipeline?

6. Do We Have 16 Strategic Relationships?

7. Are We Measuring This Daily?

Question #1: What is Our 2025 Revenue Goal?

👉 Watch the video to understand the numbers

How much money do we want to make by the end of 2025? You need to set specific goals so that your team's efforts are driving toward the exact same goal.

I recommend setting 'Run Rate' goals rather than an 'hard' annual goal. What will you annual recurring revenue be? The problem with using a hard goal vs Run Rate is that as the end of the year approaches, your chances for meeting your goals decrease and company anxiety increases.

However, if you set an Annual Recurring goal, then every single thing you do through November can contribute to hitting that goal.

Question #2: What is Our 2024 Sales Goal?

👉 Watch the video to understand the numbers

Your sales goal drives your activity. Whether you are talking with customers or identifying opportunities, everything must be aligned to your sales goal.

Sales goals should be measured in 5-year periods of performance. Since service contracts are for five years, the sales goal must also be for 5 year cycles.

For example, if my revenue goal for 2025 is 5 million, then my sales goal is five years times that revenue goal – 25 million.

Question #3: What is Our Win Rate?

👉 Watch the video to understand the numbers

What's our Win Rate? How many times are we winning compared to what we're submitting?

Calculate your annual Win Rate by dividing the number of proposals you submitted in the last 12 months by the number contracts you won.

• 50% Win Rate means you win 5 of every 10 proposals

• 10% Win Rate means you are winning 1 of 10 proposals

• Everyone should be winning at least one of every four proposals – a 25% Win Rate.

Remember that companies with exceptionally high win rates – 63% for like Booz Allen – likely means they are winning because of previously won contract vehicles.

Question #4: How Many Proposals Should We Submit?

👉 Watch the video to understand the numbers

If our revenue goal is $5 million, our sales goal is $25 million and our win rate is 25%, then how many winning proposals do we need to submit?

Obviously we need to submit four times as many opportunities as we need to win.

If you are getting a proposal out every two weeks, that's only 26 proposals a year. If you can increase your productivity to 40 proposals, your results will increase significantly.

If that is too difficult a workload, then one proposal as a prime contractor where you're trying to win it and one proposal is as a subcontractor where somebody else has the lead is a great start.

Most importantly, you should only write proposals that are in your sweet spot, aligned to your core competency. Don't waste time chasing opportunities beyond your expertise.

EXAMPLE:

• Sales goal = 25M

• Revenue goal = 5M

• Win Rate = 10%

As a team, you need to calculate how many do we need to get out every month, every couple of weeks? In this scenario, I would need 10 times that ie 250M "total contract value" or TCB in the five year period of performance.

• Total Contract Value = $250M

• Win Rate = 10% (win one out of 10)

• Minimum Number of Proposals = 10

Most importantly, I just want you to ask yourself, how many proposals do I need to submit in order to achieve the sales goal that will lead to my 2025 revenue goal?

Question #5: Do We Have Enough Opportunities In Our Pipeline?

👉 Watch the video to understand the numbers

Let's remember that sales is a process. Once we've set our revenue goal our sales goal for this year and identified how many proposals we need to get out the door, we need to put Slam Dunk opportunities in our pipeline.  How do you know if you have enough genuine opportunities in your pipeline - not just clutter? Watch the video to look at the numbers.

"Slam dunk opportunities" are those opportunities that are clearly in your niche area of expertise and a solid fit to your core competency.

The second sign of a slam dunk opportunity is whether it is funded or even expected to be funded. If it's a recompete that's coming out next year, we put it into our pipeline today to get an early start because we're pretty sure it's going to be funded. It is not always clear.

REVIEW 3 Main Phases of Federal Sales

1. Business Development | The process of fully understanding an agency, building relationships within and around that agency, and identifying opportunities. 
2. Capture Management | The process of shaping a single opportunity’s technical requirements and acquisition approach to your company’s advantage. 
3. Proposal Management | The process of bringing a single opportunity across the finish line by submitting a winning proposal.

Question #6: Do We Have 16 Strategic Relationships?

👉 Watch the video to understand the numbers

By now, you can see we're basically reverse engineering from the win to the start of our sales lifecycle. Now, we must ask if we have enough strategic relationships to help our success.

Partnerships are 'strategic' when everyone shares a mutual commitment to growth. These are the dedicated partners committed to your success and willing to put you on their team and add you into opportunities.

A strategic partner asks:

• Where can you help?

• Where can I help?

• How can we work together to win opportunities together?

How Many Strategic Relationships Do You Need?

Ideally, you want 16 Strategic Relationships, including eight (8) small business relationships and eight (8) large business relationships. This maximizes your reach to different customers and different contract vehicles, and exposes you to different opportunities you may not have ever heard about yet.

Small businesses with less than $5M in revenue should just focus on 16 relationships with small business teaming partners – ignore larges for now. Ideally all 16 partners are doing business in your target agency. Unlike personal relationships, business relationship can be easily maintained with a biweekly meeting every two weeks

Federal Buyers are looking for Small Business Contractors to FY 2024

Where do they look for companies like yours? How can you make your business profile "attractive enough" to grab ;their attention, with a cleared, focused offering ;that shows you understand the buyer's needs. Recently, Neil McDonnell offered a 'behind the curtain' look at how federal agency buyers really do their market research and what you need to do to capture their attention and be competitive in 2024.

What Do Federal Buyers Really Want from Small Businesses?

Federal buyers are very clear about what they need from their industry partners. They need maximum experience and minimum risk. They need vendors who bring Subject Matter Expertise and will help achieve the mission on task, on time and on budget. Learn more here.

Question #7: Are We Measuring Our KPIs Daily?

👉 Watch the video to understand the numbers

The final question is: Are we measuring our activity and our KPIs daily?

You probably have heard this saying, what gets measured gets done. But it is important to be measuring the right things.

What do you measure?

You want to be measuring key performance indicators:

• the slam dunk opportunities in your pipeline

• the proposals going out

• the quality of your strategic relationships

• the frequency of your meetings

• your revenue and sales activity.

EXAMPLE: Assign a color code to your KPIs to measure performance:

• Less than 20? YELLOW

• Less than 10? RED

KPIs tend to be green, yellow, red lights. These are leading indicators of your success so you want everything in the green.

If you have 20 or more slam dunk opportunities in your pipeline, that is an indicator that you're doing the right things and you might be successful.

HOW DO YOU LOOK FOR UPCOMING SOURCES SOUGHT AND RFI OPPORTUNITIES? 

This week, Neil McDonnell and his team released the long awaited GOVCON in a BOX.  Our free tool uses real time data and feedback to help small businesses:

1. Maximize your visibility to federal buyers
2. Find teammates who want to work with you, and
3. Respond to opportunities you can win.

Come exploreGOVCON in a BOX. Membership is free to all small businesses registered in SAM.gov.