Key suppliers
Services companies:
- Staffing: 99% of government services companies are basically staffing agencies or “people reseller” for the government, and the business model basically works like this:
- The government needs 10 people to staff a call center
- You offer to provide those 10 people at $60/hr/person
- You pay those people $40/hr/person
- You keep the $20/hr difference
- But really: This is an over simplified example but this is how most services companies work, they are basically staffing companies for the government.
- People are your product: If you win a services contract you need to deliver the people, people are your product
- How do you have an “inventory” of people: Since people are your product you need a pipeline of people who are either unemployed or are willing to leave their jobs to come work for you if you win. But people don’t just sit on a shelf, they change jobs and change professional goals so maintaining a list of people is challenging.
- Your people pipeline is a huber driver of your profitability: We go into more detail in our business models classes but your ability to cultivate a pool of quality people to staff your wins is a huge driver of your profitability
Building your employee pipeline
- Finding people: Ideally you will have a rolodex, or pipeline, of people that you could staff:
- LinkedIn: Review your LinkedIn analysis and looking for people that you could hire
- Collecting cards: When you go to trade shows and events keep your eyes out for people you might want to hire
- Add them to FedScout: Add promising people to your supplier pipeline
Example: New hire pipeline
Product resellers:
- Value added resellers (VAR): A VAR is a middleman, so Home Depot is a VAR, they buy wholesale quantities of different product, and then sell them at a markup to individual customers (retail)
- VARs are the second most common type of government contractor after services companies
- We have more information on the VAR business model in our business model courses
- If you plan to re-sell products you need a pipeline of Original Equipment Manufacturers (OEMs) that will give you preferred pricing
- Add the OEMs that you are tracking: Add the names of promising OEMs to your supplier pipeline
Rants and Reflections
My unscripted thoughts after coaching hundreds of small government contractors over the last 10 years
Video Transcript(s):
So here’s something most people don’t talk about in government contracting, 99% of government contractors are resellers, they’re either reselling people or reselling products. Even the mega primes are basically staffing agencies for the federal government.
So if you're a services company aka a people reseller then you need to have a supply of people that you can quickly hire and staff. And you need to have identified them before you submit a proposal because
- One, you may need to submit their resumes as part of your proposal
- Two, good primes will want to see who you are bringing to the contract,
- And three if you start looking for people after you get the award you won't have the time to find, vet and on-board the people you need by contract commencement.
So you need to have identified and preferably pre-negotiated a rough employment relationship with a half dozen people.
In the exercise below you’ll see your linkedin contacts organized by what they do and we recommend selecting six to ten people and FedScout will add them to your staffing pipeline.
Once they are added, FedScout will help you engage them and move them towards a contingent hire relationship.
If you're a product reseller then you need to do the same thing, but with manufacturers rather than with people. And unfortunately we don’t have a convenient tool like LinkedIn to help us identify promising OEMs, but assuming you know the OEMs you can add them into your work plan and FedScout will help you track and drive towards a full reseller relationship.