Remember that feeling of accomplishment you had receiving your college diploma? “I’ve made it,” you probably thought. “I’m finally ready.” Then came the sobering discovery—the realization that post-graduation life from the status of making it in the ‘real world’, has its own challenges and impediments.
It’s the same story for Small Business. Once they’ve graduated from the SBA program in an IT NAIC code, they find themselves competing in a different world. It’s called ‘No Man’s Land’ where titans and gnomes are equally competing for the same RFP capture. So, often we see the smaller companies’ revenues drop; key employees get poached; worst of all, buyers use “comparables” to consistently undervalue their company’s true worth.
According to a study from the Merrill Advisory Group, the four critical components of Government Contractor Valuation are:
1. Business Focus
2. Financial Operations
3. Unique Characteristics
4. Company Brand
But what are Unique Characteristics? That’s the question most Small Business government contractors aren’t prepared to answer. Assuming all things are equal (including past performance, business focus, and financial operations), what makes your company worth more than your competitors?
Often, the answer is rooted in a company’s Strategic Brand Proposition (SBP), or lack thereof.
SBP, like marketing in general, may sound superfluous to most government contractors. But you’ll find it’s intimately and inextricably linked to your company’s growth post-graduation. Buyers and investors have many names for it, “Good Will,” “Intellectual Property,” and “Reputation with Customers, Suppliers, and Partners,” to name a few.
When stakeholders visit your Web site—your digital brand identity—what will they find? User experiences, thought leadership pieces, and collaborative technologies that demonstrate your unique value proposition? Or a hollow, unconvincing mission statement bootlegged from a competitor: “We’re the only company that’s truly customer-focused,” or “We deliver solutions!”
Few Small Business entities have invested the proper time to position themselves for optimal value. The same IT systems integrator can be perceived as an “Architect” (highly skilled strategic partner), or as “Mr. Fix It” (low-cost vendor). Savvy entrepreneurs know that brand equity and the art of strategic communications can make or break perceived value to both Federal customers and potential buyers.
Often, we hear Small Business graduates lament that they can’t afford marketing, advertising, or public relations. It’s the equivalent of bemoaning the need to buy a suit for your first real job interview. Image matters, particularly when you’re building your company for higher valuation. And that, Small Business graduates, is the bottom line.
Ready to chart a different course? Contact us at The Borenstein Group and we can help evaluate what you need to do to make the neccesary changes.