How to Make $10M by Subcontracting on Federal Contracts | Neil McDonnell LinkedIn LIVE (2022-03-24)

i'm neil mcdonnell i'm the president of the govcon chamber of commerce uh our organization's designed to help you make more money uh really from the small business perspective who we support we're trying to our vision is that small businesses will get 50 of the federal contract dollars and the only way i do that is by teaching the process i don't really care about congress or what the agencies are doing it's about helping small businesses in particular understand the process to drive towards more revenue success and so that's our focus i do these daily lives every day every weekday from 12 to 12 30 east coast time i've got topics in particular that i'm lined up all of them geared towards some way or another driving towards sales and contributing to that process of making more money but if you've got questions or topics throw them into the chat love to address them today and or just use them as future topic ideas today we're going to be talking about um you can see the topic right making 10 million dollars subcontracting in the federal market and i'm going to get started there in one second but i wanted to ask those of you who are joining live to put your company name and your core competency into the chat so i can see who you are let me know that you're out there and then if you're listening to this on a podcast or watching on youtube or some replay it's not too late put your information into the contact as well it's really helpful for me to know who you are but it's also great for other people to begin to see who each of you are i've watched a couple of people through the chat kind of connect up and go oh maybe we can work together on a particular opportunity so it's a great way to just let people know who you are um and then for a little bit of background context on me i spent 20 years as a small business owner i've been in this space small business owner a sales person doing the work and after i sold my last company and started the govcon chamber it's all been about the process of really trying to demystify the process the last thing i wanted to say before i dive right into today's topic is you can see the the url for govcon chamber if you haven't done this before go to the govcon chamber just to that home page and you'll see several different directories on there that you might find valuable and one of them is it's got a thousand names of small business specialists within federal agencies that you can reach out to another part of that directory our small business liaison officers at large prime so it's got a lot of great information in there and you can find that on govconchamber.com okay so let's get started with today's topic again it's making 10 million dollars in subcontracting within the federal market and so let me expand a little bit on that um topic and what i mean by that you might be a new small business just starting out within without any federal dollars well the way i'm going to be talking about this topic that 10 million dollars might take you a little longer to get to and so you know you look at it smaller you could be a large billion dollar firm and you're watching today's live session or this video replay and you might be able to um bring in that 10 million dollars in a couple of months right so there's depending on where you're at is how fast you can get that 10 million dollars but 10 million dollars of subcontracting is a realistic um approach and so i'm going to talk to you about how or what i recommend you do in order to make that happen um so you know this is a right topic for you if you feel like you're not making enough money that's why i wrote this i work with companies trying to help them look at their long-range plans and and i've done videos before gus might drop it into the chat here but i've done videos talking about the three ways to make money are subcontracting smalls priming with an agency and subcontracting large those are basically the three ways to make money and so that today i'm going to focus on the subcontracting um one thing i will tell you is that i'm going to i have a roadmap i want to give you a subcontracting roadmap this lays out just steps you can follow towards achieving this goal of making 10 million dollars in subcontracting so at the throughout this video or at the end put into the chat you know please send me that subcontracting roadmap and if you do that i'll follow up with you and get it to you um pretty quickly but um this roadmap is a great way for you to just have a single paper to follow along with some of the guidance i'm going to give you today so let's talk about what subcontracting is one of my favorite quotes out there is the biggest problem with communication is the illusion that it took place at all the single biggest problem with communication is the illusion that it took place at all and the reason i put that i love that quote is because um often you go into meetings and you think you're on the same page and you're not so i want to do that with us today it's just stop for a second ago what is subcontracting we might think we all are on the same page but clarifying it makes it you know for sure that we're on the same page so the first thing from a subcontracting standpoint from my standpoint right you can subcontract under a small business and you can subcontract under a large but either way what it basically means is they've got the prime contract and you're just on their team um you know if if you're new to the subcontracting world in the govcon world somebody else can dive much deeper into that for you go to your ptac i'm always telling you go to your p tax um but there's two ways you can go at subcontracting first is the size a small business subcontracting approach where you're going after them as a prime or they're the prime in a large business right going after them um the other is when you think about subcontracting you can subcontract on new opportunities you know hey company a i want to be part of your team and now you're getting on their team until you guys win it you're never a subcontractor right you're a teammate but as soon as you win it you'll be given a subcontract based basically on your team agreement and so now you're a subcontractor but that's on new opportunities and from my perspective that represents revenue that's six to 24 months out you can do new or you can do awarded contracts and so awarded contracts or contracts that were awarded yesterday not tomorrow and those contracts there might be positions in there that you can go in and help support and so some prime contractor would welcome you in if you're bringing in what they need and you can get and that could represent revenue in the next few weeks few months where it's starting to get get going because the contract's already awarded and let me pause for a second to talk about a myth around um uh the by the way really quick pause if you see me looking this way i'm looking at the the chat and my clock because i want to respect your time 12 30 i want to be done and off um and i'm looking at the clock but the um there's a myth about awarded contracts a lot of us might think that once a contract's awarded that team is already done it was formed when they chased the opportunity and then they landed it and they've got their people in place and and you're not going to get any part of that contract well that's just not really the case because often what happens is a contract is one but for whatever reason the prime is struggling to get all the uh work covered down on and because i'm a i think in ftes or you know putting a person on the job um it really comes down to hiring the enough people or the right people to fill it out and um and so there's a lot of positions that they haven't filled yet that if you come in and you bring your area of expertise matching up to their need then you have the ability to get on a contract that was awarded and already has other teammates they're not pushing other teammates out what they're saying is turns out we have room for more subcontractors to help us fulfill the government's need and um so that's why you know whenever i'm talking about revenue i'm always talking about going after new opportunities and currently awarded contracts um thanks matt um so occasionally i'll look at the uh the chats if i don't say your chat it's just because i'm i'm not good at reading chats all right so that's what subcontracting is right you could sub contract contract with a small and a large and you can do it on new opportunities future or existing contracts the ones that are already awarded um when you think about what you're doing i want to introduce you to this whole concept in sales just called the numbers game right um the more you do the more likely you'll have success and so if you want to get um if you're calling up a customer to get a meeting or if you're calling up anybody to get a meeting you might not be able to call one person and get a meeting but guaranteed when you call enough people you will get enough meetings so that's all a numbers game is is how many how much of an activity do you have to do before you get the results you're looking for never think that you'll get a hundred percent of the people coming to you and say oh i'll talk to you or 100 of the contract's awarded to you right that's unrealistic but there is some number in there and i'm going to relate that back to subcontracting in a second but the reason i say this is because when i help companies with five year strategies in the federal space where they're looking at their money i describe exactly what i described in that previous video on where you get money small businesses federal agency priming or large subcontracting and so when i create a five-year strategy with somebody we're looking in there going how are we getting that money how's it coming out and what i'm recommending to you is to you know you have to figure out where you're at and modify my advice a little bit to fit to you but certainly this can fit for everybody at any level even the beginning is identify 10 teaming partners 10 possible uh strategic partners that you can begin to pursue and i want to point out what a strategic partner is to me that means somebody somebody who you could work with to get on four opportunities a year so if there's a company out there and you like them but really they're probably only gonna invite you into one or two opportunities then they're not a strategic partner to me they're a good partner they're an ad hoc partner somebody that depending on the need it arises you work with them but a strategic partner or strategic agency is big enough to handle the goals that you have and your goal should be four opportunities one opportunity a quarter that you could subcontract under them so if you went with let's say booz allen they're a billion dollar firm you easily could be doing for a month let alone for a year with them if you team up with me on my last company you could probably find four opportunities because we went after enough that if you brought a complimentary service we'd probably be bringing in left and right to the proposals we went after and so what i recommend to people is find 10 teaming partners out there that you can begin to build a solid relationship with uh obviously you go through this process of finding and developing relationships with each of these people you know there's a whole set of how that you do that in fact my webinar on april 5th talks about that but when i talk about 10 partners i'm looking for 10 teaming partners small businesses etc that can give you four opportunities that you can participate as a sub on if they're a good partner in their experience and they're going after agency work that they could win then you have four opportunities for each one of them that represents 40 proposals a year just from subcontracting right if you're a billion dollar firm i'm going to tell you to like quadruple that or 10x that but this ability to find these folks and almost have them selling for you because they're out there identifying the customer and they're pushing in and what you're doing is bringing your expertise if you're new to federal government that's perfect because that's all you want to do is play at that level if you're very experienced in federal government well this allows you to expand your reach you have your own prime contracts you're trying to win you might invite these teaming partners in as a sub but now they're going after their own targets where you have a place in there a two percent share a 10 share a 50 share if you line up those partners correctly then you'll find the ones that fit for you um so i i want to put a numbers game an example and i use this company a friend of mine greg is out in and he's been part of the hubzone chamber and uh before we renamed it the gokhan chamber for years and so um i i know him through and through plus his company does what my last company does but craig's out in in um san diego and he does sharepoint and so just using him as a numbers game when i say 10 million if i was to talk to greg i'd say let's say your average rate is a hundred dollars an hour 100 an hour um times a normal fte would basically be 200 dollars a year if you don't know this math i use simple math where i say you double the hourly rate you get the annual revenue right so a hundred dollars an hour two hundred thousand dollars a year uh five ftes at two hundred thousand dollars a year makes um a million dollars so you need 50 people at 100 an hour rate to make that 10 million dollar subcontracting that i talked about now i didn't say you could make it all in a month or in a year so if you spread it across five years it's only two million dollars a year that is very achievable remember if you're new cut your teeth get experience with this but if you're doing five million plus you should be able to put in a plan like that where you're increasing by two million dollars a year you know to land 10 million dollars in revenue and if you're let's say uh 10 20 million dollars up you should easily be able to pull that 10 million dollar goal into one year right so you know make a realistic goal but it's not that um complicated to look at the math to understand what does it take to get to where you want to go and so i just call it a numbers game because when i do sales i want to know the activity i have to do how many companies will i need to reach out to in order to find the 10 work and so let me just stick with uh greg as an example here his company is sharepoint if you don't know microsoft sharepoint it's basically a communication collaboration tool an application development platform that microsoft has and so it's an i.t tool what i would recommend to craig is why don't you look at the 8 a stars 3 contract vehicle the 8 a stars 3 contract vehicle is a 50 billion dollar contract vehicle over the next well it's an eight year thing so it's got like seven more years but it's a 50 billion dollar contract vehicle that has about a thousand companies that are on there that means all of these companies in one way or another are doing something related to it services they had to prove themselves some of those companies make very low revenue less than uh i think some of them are making less than a couple of million right and some of them are american north of 20 30 40 million and so what greg needs to do is to vet those companies for two things one is which ones of them are big enough that they have the ability to go after uh prime contracts on this contract vehicle uh over the next you know five years seven years which ones are like that and which ones are closest to what craig does but not overlapping so an example is let's say he reaches out to a company that does software development but they don't do sharepoint software development it's a unique thing and so he can get in there and team up with them well out of a thousand companies that are on this vehicle finding tan that fit is not hard it's time consuming it might take you time to make the calls or do a little bit of research to find the right ones um but to put in perspective i just helped somebody reach out to two days ago help somebody reach out to i think it was 30 30 companies or something and from those 30 they found 12 that were exactly what they were looking for now this related to 12 a specific single opportunity but it's the same approach when you work to create a list to reach out to and then you reach out to them you're just starting and building relationships these people would love to connect with you and they would especially love to work with you if there's a complimentary set of services between you and them so by the way i see all those comments about please send the road map i absolutely will um so coming back though i would recommend that greg does that and he can find 10 firms that are on this contract vehicle and and the upside for that contract vehicle is most of those task orders are direct award meaning many of these firms have close relationships with their existing customers if they don't already do sharepoint but greg builds a relationship with them and they see him as the sharepoint arm they still get 51 of the work but now he's beginning to get in there and develop contracting opportunities develop the revenue revenue obviously and then all the bonuses of um understanding the customer getting experience with the customer et cetera so let me bring it back down to this last tip that greg needs and and it's for you guys right it's for you specifically is in order to do all this you need to focus right you need to focus on two things one is the agency that you want to go after so um you know if you try to go after everybody you can't really learn uh also when you focus on a single agency let's say that eight a star streak group of companies i talked about you could then look and say well show me the 8 a stars 3 contract holders who are working in the air force now you've whittled that list down to the people who are in here and you're reaching out to businesses that are already in your target customer so focus on the agency the next thing is the the second thing is uh focus on your core competency not core competencies um you want one you want to be known for one thing as a small business under 50 million you want to be the best at one thing right uh i guess at 50 million you can have a couple of things but really one thing right and so for greg's company although he does all this other related activity to sharepoint he wants to be known as sharepoint because people put it in their head and and to put it in perspective right i've known him for several years through the chamber our professional friendship and relationship here but wherever i go i know greg being group out san diego does sharepoint they're your sharepoint folks i ran into 100 million opportunity with another customer and they were struggling with that particular area i'm like well have you talked to greg and i just put the two of them together and you know greg's teaming up with them on a particular opportunity because he was able to drive into my head this is the one thing we're great at and when he gets in he can expand right that's the thing we fear oh we'll miss out on something no you'll actually get more opportunities when you tell them tell whoever you're trying to talk to hey this is our core competency the primary thing we're good at um so focus on that core competency um and then it's the same thing when he reaches out let's use that example as a daystars3 you know when you reach out to them you'll be able to communicate pretty fast pretty quickly this is what we do and in their mind they'll be able to see is it a fit or not a fit and you'd be amazed how fast we can hear from you and you go this is my expertise i go yeah that's not a fit for us which is totally fine or we go oh yeah we don't do that stuff or we do do that stuff right whatever that is the more clear and concise your message and your focus is on what you do the easier it is for others to help you so coming back just um bringing this back a little bit full circle before i move into the last thing i want to talk about is um you know when you want to make 10 million dollars in subcontracting it begins with the first hundred thousand right it works it up so depending on where you're at you'll be able to scale up faster but um when you want to go after 10 million dollars to subcontracting begin with having a strong focus on the agency you want to go after and the core competency you have which will make it easier for you to identify the right people to begin to build a new relationship with it'll make it easier for you to communicate out there what you do in a way that people will um resonate with so first thing is having that strong focus the second thing is identify the companies you want to reach out to and begin to approach so like i said with the 8 a star straight i would just go in there if i went to um if i wanted to get on oasis or if i wanted to look at seaport next gen you can go in and find the contract holders and begin to pull it down tight and so this is a good thing um and and then you can reach so now you've got the people you want to call and then you just reach out to them and it uh if you haven't done this a lot you you'd be amazed at how straightforward it is once you know the process and you begin to follow the process right if i say it's easy but you don't know the process well it's not easy it's complicated but the minute you know the process and you begin to see it that's kind of the purpose of the road map the minute you see that the minute you'll begin to feel that it's easier than it was the day before and so have a core core competency focus and agency focus pick the people you want to reach out to reach out to them with a pretty straightforward outreach program you can do it through email don't spam them right you want to reach out to individual companies specifically not a group of them but reach out to them and have that intro call and that intro call is really 15 minutes uh max for an intro call you can still schedule it for 30 but you should be able to communicate in the first five or 10 minutes what you do and ask is there a fit should we keep talking and so you do that and after that it's just a matter of having a regular scheduled meeting so when i talk about 10 partners and this might be the last tip i provide just as i watch the time wrap up when i talk about 10 partners sometimes people might think it's overwhelming to manage those relationships et cetera well if you keep it con uh your your um if you follow a process right government contracting is not a secret it's all just a process you can set up a meeting every two weeks were you coming in hey let's have a 15 minute 30 minute max touch base where we talk about the pipeline the opportunities we might work together when you're much smaller you probably won't have any opportunities to say hey we're going to prime this you'll just be subbing that's fine just communicate that and when you're larger let's say you're 10 million or above then you should be bringing a couple opportunities that you you are priming and might be inviting them on and certainly you're looking for them to have four opportunities that you can begin to look at but you have this regular meeting it's only 15 to 30 minutes 30 minutes is five hours total every two weeks to maintain a relationship with these ten folks if you add in some pre preparation time and some after action time to write the action items etc you double the time you're 10 hours to manage 10 people every two weeks that shouldn't be hard if you're trying to grow 10 million um so you know when you again that goes back to the numbers game thinking about it so and from that point forward it's all just relationships and i'm i'm not diving into that today uh do you have questions i can answer throw them in the chat if i uh if i was clear if you found this valuable give me a thumbs up let me know that as well the last thing i want to say and then i'm going to look to the chat is again if you'd like to get a copy and if you haven't done it already of the subcontracting roadmap go ahead and put a comment in the in the comments that says you know please send me the uh subcontracting roadmap that way i don't forget and this is um really important as well for those of you who watching the replay i understand not everybody can make it to the live every day um and i and i appreciate those of you that do but i understand those of you who aren't so if you're watching the replay on linkedin youtube or listening to it on a podcast just put that note in the comments and i'll get back um yeah vanessa i'm huge on huge on numbers i i i like reverse engineering how many calls do i have to make in order to get this in order to get this so um okay so i'm just looking through these uh uh comments really quick um it's good to see a lot of people a lot of faces and names i recognize i'm seeing if there's questions just dragging sorry for pausing here quiet i should have some sort of music looking at a lot of please send i don't see a question yet uh thanks by the way for putting your core competency and company name in uh that's really good okay three ways oh there's gus shree i don't think i'm missing questions at the top um there you go okay and then something at the bottom thanks curtis all solid stuff absolutely deborah will send it um and thank you i appreciate that as well i think we're good to go i don't need to keep it going i did want to share a couple last minute things um and if you have a comment i'll look over in one last second but um next week's sessions i'm going to try to make them all around capture there's these five topics within capture that i like when i'm doing capture and helping a customer helping a customer go after an opportunity um and and i tend to help in that 100 million dollar up range when i'm going after it there's certain things i i go after that i'd like to share with you next week so next week you're going to see five topics around capture that are just building on each other and they're what i do when i'm doing capture myself if i was supporting somebody or it might actually i didn't do it as much in my previous company it's all this stuff i'm like oh if i had just known my last company so that's part of the reason i try to share what i know with you so that you don't have to spend the years i spent learning stuff especially learning the how right people would tell me what to do but not so much how and and so next week it's going to be how i do five different steps in capture um so i hope you're able to attend and you'll see me put them out probably on sunday if you're in the chamber govconchamber.com and you've signed up you'll get an email where i list out the next topics our team plans to do um and then april 5th we're doing a webinar i'll be talking about finding and building relationships everything in government contracting is about relationships of course there's all these other things but having the relationships leads to all sorts of activity and by the way in case i misspoke yesterday relationships um and cold calling are vital to capture so just a shout out to lara on that um and the last thing i want to tell you is that government contracting it's not a secret it's just a process keep joining me on these daily lives and i'll share the process have a great day

Channel: Neil McDonnell

Views: 7,310

Keywords: federal contracting, govcon, neil mcdonnell, government contracting, wosb, Capabilities Statement, veteran, win contracts, procurement, fbo, 8a, gsa, dynamic small business search, contracting tips, matchmaking, government contracts, Neil McDonnell, small business, duns number, cage code, hubzone, sbdc, ptac, sba, sam, dsbs, capability statement, fpds, wbc, government contract, sam registration, 8a certification, minority owned business, capture, business development, bd, contract vehicle

Id: aYBcR3XQUVA

Length: 25min 47sec (1547 seconds)

Published: Fri Mar 25 2022