Is a GSA Schedule an Investment?
Simply put A GSA Schedule gives access to a market, that being the federal market. Marketing dollars spent have both an immediate effect of hopefully making the phone ring as well as a lasting effect if the firm can obtain brand recognition. The top brands in the world Google and Apple are said to have brand values to those firms of in excess of $100B.
A GSA Schedule is similar to a brand in that it creates a lasting revenue stream for the firms. Once a firm gets on schedule, they are taking the first step to building the government portion of their business.
A GSA Schedule serves as the “starting point”
The majority of people we speak with do not do work with the federal government because they have no “starting point”. By this I mean they don’t know an effective means to start doing business with the federal government. The reality is that federal buyers like to work with people they have experience with and know will do a good job. But this all takes second fiddle because federal buyers have to follow federal acquisition regulations which requires them to need a legal means to buy a firms products or services. Therefore a firm needs a “contracting vehicle” to have any chance of doing any sizeable amount of work with the federal government.
What is a Federal Revenue Source Worth to a Firm?
When my father was younger it was always said invest in General Electric. The rational always was in good times GE sells aircraft engines, locomotives, and appliances, in bad times they are selling things to the federal government. So the theory was they are always going to make money. In 2008-2010 many small construction firms that had ins with the federal government survived and their counterparts without federal revenue did not. Having a government source of revenue is important, it is not a hot growth sector, the federal budget typically grows at 1-3% per year. However, when it is needed, it helps a firm keep the lights on.
How Much Would it Cost to Replicate my Competitors Federal Marketing Advantage?
The real answer is that you couldn’t. If you have a competent competitor in the Federal Sales space and had an unlimited budget it simply would not matter, you could not take their federal market share within 2 years. In five years you could make major headway, but federal sales is all about a continuous methodology and it takes time. The counter point is once you have established your federal sales channels you will also enjoy this barrier to entry from your competitors.
How Valuable are These Federal Sales Channels?
65% of acquisitions in the federal contracting space occur so the acquirer can have access to new/federal markets. These firms are purchased for their relationship and capabilities within various federal agencies as in many cases the only way to gain quick access to an agency is for a large firm to buy their way in.
What Advantage Does More Experience Translate to in the Federal Market?
Firms with over 10 years of Federal Contracting Experience win contracts greater than 53% of the time. The longer a firm is part of the federal market place the more the firm’s skills and relationships grow. This gives long tenure federal contractors 10+ years more than double the contract win rate of new entrants.
How Effective is a GSA Schedule as a Starting Point?
80% of active GSA Schedule holders do over $1 million per year in federal contracting and receive 47% of the firms revenues from federal contracting.
A GSA Schedule as an M&A Asset
A GSA Schedule is one of the few transferable government contracts, and will follow the acquiring company in a business sale. A GSA Schedule is your first step in entering the federal market place.