Although the official end of the year is still a few months away, September 30 is the end of the fiscal year. In addition to reviewing P&L statements, verifying vendor files, conducting an inventory, and taking other steps to put your books in order, it’s time to start looking forward to next year.
New Fiscal Year Resolutions
Although you may have already started planning for fiscal year 2018, October, November, and December are the months to cement those plans and prepare to take action. For many companies — and particularly small businesses — taking advantage of the government’s GSA Schedule is a wonderful way to boost your bottom line. If you bid on government contracts or are planning to do so in the new fiscal year, this will figure into your 2018 budget.
Because of this, your planning for the fiscal year needs to include reviewing and auditing current contracts, creating a marketing strategy to secure additional contracts, and creating a realistic budget that clearly reflects the risks, as well as potential rewards of future opportunities.
How to Review/Audit Contracts
As part of your organization’s planning going forward, it’s important to understand the results of the contract terms you’ve negotiated in the past. A thorough review of past and current contracts is key in order to help you create an effective strategy for the year to come.
When evaluating past contracts, you’ll need to look at specific points in time as well as overall trends in order to analyze performance, expected revenue, expected cost and profitability, as well as projections for growth. Did you negotiate pricing terms based on expected sales of $1 million, only to have the government agency only purchase $700,000 of your goods or services? If so, pricing terms and expectations may need to be adjusted if you bid on government contracts with that agency in the future.
Shortcomings in contract performance aren’t always due to actions on the customer’s side. Perhaps your business was unable to keep up the pace and manufacture enough units to fulfill your side of the agreement. This should also give you clear feedback on how to adjust the numbers and negotiate pricing as you move forward.
To Bid on Government Contracts, Adjust Your Marketing
If you’re new to government contracts or if previous attempts at securing them have failed, marketing will make up another facet of your strategy for the new fiscal year.
Marketing to the federal government isn’t like marketing to civilian entities. You’ll need to customize your approach accordingly. Government agencies aren’t focused on providing amazing customer service or growing their profits year after year. Rather, they’re looking for ways to do things more efficiently. They are also concerned with meeting specific rules and regulations.
Research your audience before developing a marketing strategy, keeping in mind that the government speaks an entirely different language than your other clients.
Match Your Budget to Your Opportunities
Finally, you’ll want to create a realistic budget for the new fiscal year — one that reflects potential risks, as well as the reward that exists when you bid on government contracts.
This means conducting a fair analysis of each and every contract you pursue. How much will it cost to go after a specific contract? What will be the cost of fulfilling it … or of failing to do so? What if you get the contract and can’t staff it?
As you analyze each future opportunity, make sure you’re pricing in risk, as well as reward. By taking this clear-eyed approach, you’ll be able to make an educated decision on which contracts could pay off big and which ones aren’t worth pursuing at all.
Do you have questions about negotiating government contracts or need help getting your business registered? Contact Government Contract Services for help today!