As covered in our Galain Solutions blog, a new report from the National Conference of State Legislatures says thirty-six states are currently facing budget shortfalls of more than $28 billion. And it's going to get worse. Historical analysis shows state budgets continue to struggle long after a national recession ends.
What can state-focused government contractors do as budgets lag behind the rest of the economy? Here are a few suggestions for driving more business during tough times.
Learn the Ropes
If you are new to government contracting, take this time to develop your go-to-market approach, learn how the process works, and begin implementing your plan. You may find today's slower pace helps keep you from making discouraging mistakes, and you'll be ready when the recovery hits full swing.
Business is still about relationships, and now is a great time to make and enhance those connections. While competing vendors may be diminishing their "field efforts," take the opportunity to fill the gap. Connecting with decision-makers when there is no immediate opportunity says you're committed to the market and the customer. You'll find yourself getting a "shot" when things turn around.
Save Them Money
Products or services that reduce customer operating expenses or increase efficiencies can actually thrive in down times. Expenditures can be justified if a clear ROI can be established. Develop marketing and sales messages around the concept of cost effectiveness and value.
Consider Creative Financing
While procurement rules vary across states, it may be possible to win deals through creative financing. For example, multi-year deals with accelerated payments toward the end of the contract (buy now--pay most of it later) may get customer's attention. Leasing arrangements may be well received. Consider creative ways to help customers get what they want (your product) while dealing with the current cash crunch.
All states did not enter the recession at the same time; they will also not all emerge at the same time. Be aware of activities in states less affected by the recession, and pursue areas that are recovering the quickest.
Go Where Others Aren't
In addition to pursuing recovering states, you may find opportunity in places competitors are abandoning. Governments continue to procure goods and services even in lean times. Less competition may increase your odds for success.
Target Other Government Buyers
While states may experience budget difficulties for some time, other government buyers may have more resources. For example, many federal agencies have operating budgets in line with last year. Some even have new infusions of money due to the American Recovery & Reinvestment Act (ARRA), also known as the "economic stimulus." Now may be the time to expand beyond state or local buyers and target bigger fish.
Clearly, states are not out of the recessionary woods. However, contractors with the drive, smarts and creativity can still excel in difficult times.
Happy hunting and all the best,
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