How Small Businesses Can Improve Diversification in a Highly Competitive Market
Targeting certain contracts or expanding your portfolio can be difficult with limited staff and resources and/or growing compliance costs. On one hand, you know growth is important and maintaining eligibility for certain contract types is a must to remain competitive in an emerging market. And, on the other you also know how challenging meeting these demands can be and especially when you are limited in resources.
Doing More With the Same
According to last year’s Deltek Clarity Government Contracting Industry Report, diversification was a go-forward objective for more than half of government contractors who indicated they aim to diversify their customer base, yet find it challenging to work with different agencies. The preliminary results from the 2021 survey indicate much of the same, with business development and financial leaders specifically calling out diversification of client base as vital to help offset the lingering effects of the pandemic and subsequent downturn.
Additionally, 39% of government contractors noted it’s difficult to begin work in new markets and 26% struggle to grow into new product lines.
This raises an important question: How can we overcome the growing pains and do more with current resource levels, i.e., grow and target new types of business? The key to answering this question is to identify your strengths. When your organization is thriving, what are some contributing factors to that success?
Is it easy for your team to identify new opportunities? Maybe, compliance is a strong suit and it’s not burdensome for you to meet the industry’s compliance requirements like Federal Acquisition Regulation (FAR) or Cost Accounting Standards (CAS), but it’s difficult for you to identify new opportunities. Recognizing and capitalizing on how you execute well, you will have room to invest in critical areas in need of support.
Teamwork Makes the Dream Work
Government contractors have also indicated they are diversifying their overall strategies to include priming, teaming and subcontracting opportunities in order to expand their business. A good example of this is partnerships large and small contractors are forging to access more competitive markets or augment resources in ways in which they cannot do alone. This can look like a larger organization teaming up with smaller businesses to access small business set aside contract funds along with contracts they’d otherwise be ineligible to pursue.
Because diversification requires contractors to be more nimble with scaling their organizations, matching internal growth to new external demands is important.
Being CMMC Ready Can Help Maximize Growth
If you are a government contractor, it is not surprising that industry regulations are becoming more restrictive. Since the Department of Defense (DoD) has implemented Cybersecurity Maturity Model Certification (CMMC), government contractors of all sizes continue to experience an increase in compliance costs. For small businesses especially, it is vital to establish effective internal processes in order to meet requirements.
Prudent planning and flexibility will be your friend as you navigate this tricky regulatory environment and, if you get ahead of the requirements now, you can enhance growth in addition to advancing your objectives.
Further, by investing in systems like Deltek Costpoint and its GovCon Cloud Moderate offering, which is supported by a team of leading industry experts, you can enhance your eligibility for certain government contracts. Subsequently, if you do not already fulfill DoD contracts, by investing in a CMMC strategy, you can expand your portfolio with new agencies under the DoD umbrella with confidence. It is anticipated that CMMC guidelines will impact other agencies in the future, which has the potential to affect your eligibility to win new contracts.
Improving Your Competitive Edge
With business growth and diversification comes the need for a more sophisticated enterprise resource planning (ERP). Investing in a trusted system like Deltek Costpoint helps remove barriers that prevent diversification and provides the resources necessary to effectively scale your business to address the work.
Deltek solutions are allow you to customize your system to meet a business’ needs now and as it grows. Whether that be in terms of people, projects or finances, Deltek solutions are comprehensive, saving firms from investing time and resources into managing multiple solutions and seeking a new system every few years.
The webinar How to Minimize Competitive Barriers and Grow Your Federal Business Through CMMC addresses some of the avenues to pursue in order to diversify your business, and what you’ll need to get there. Hear from Katie Arrington, CISO for Acquisition and Sustainment, Office of the Undersecretary of Defense, Matt Gilbert, CMMC Provisional Assessor and Principal at Baker Tilly, and Todd Walker, Vice President of Product Management at Deltek, as they address considerations for the future with CMMC and DoD compliance.
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