I’ve seen a few people start businesses providing a product or service that they were truly passionate about, only to find out that the government just doesn’t buy enough of their products or services to sustain a business, or found that the government did buy it, but only as part of giant contracts that are hard for new businesses to win.
So let’s analyze government spending data for the products and services you identified in the last exercise to get a sense for the total market, and the portion of the market that new vendors can realistically access. And the good news is that FedScout will do all the number crunching for you, you just have to tell it what to look for.
So step one is to figure out what keywords the government uses to describe the first product or service on your list, and for help click on the Keywords button and we’ll take you through an exercise to find the right ones.
Step two is to figure out which CODES identify that first product or service on your list and for help click on the codes button below.
Finally, we recommend thinking about where you can deliver your product or service. Some things, like construction are very local, you’re not going to move all your construction equipment across the country for a job, but other things can be done anywhere, like writing software. So think about where you could realistically provide that first product or service.
Next, click on the market assessment button and you’re going to enter your keywords, codes, and optionally your locations.
Then put in the months that you need to invest in customer and partner relationship building
And when you run the search you’re going to see a couple charts. The first is the total market for that option.
The second chart is the total market broken down by how accessible the spending is to new vendors, so spending on the left side is more accessible to new vendors and spending on the right is more difficult for new vendors.
And the third chart is a projection of your company’s potential revenue over the next five year which is based on:
So these are going to be very rough numbers, but they should give you a general idea of revenue growth over the next five years
And keep in mind that this timeline starts when you start working on your company in earnest, not when you leave your job, so for many of you revenue is going to be extremely low in the first year or two. Which is fine but does mean that you need to think about employment during that time.
Now, repeat these exercises for each of the products and services you listed, and if you have a FedScout account the tool will keep track of the keywords and codes for you, and if you don’t write them down as you go along.
Now let's get rid of any bad options, so we recommend discarding options that have less than $5 million in revenue by year five, or that generate significantly less revenue that other options in the first two years, and keeping the rest.