Only those who will risk going too far can possibly find out how far one can go. ~T.S. Eliot
Some will read this and think, “I’ll fund my future growth with my present contract awards,” and while you are not wrong in this belief, actually pulling that off isn’t as easy as it sounds. Typically we see that small govcons make between 3-5% profit margins on their government contracts. This is predominantly why so many can’t afford to keep participating long term, so wouldn’t it be nice if you had options that allowed for your growth and assisted in your potential for long term growth at a faster rate and without any boundaries?
Bottomline, there is a stigma in our culture surrounding the understanding of your own business’ finances and the comfortability in discussing the need for cash infusion to stimulate growth. Most of the time, business owners are functional operators. So the process of accessing what you need when you need it can be hindered for 2 reasons: 1.) lack of understanding of the need and options available to you and 2.) a wavering sense of urgency and complacency that if you win it, the money will come to you easily.
Some key points to keep in mind when making your decision on where to get your funding are:
- Don’t let your cash flow solution be the reason why you have a decreasing profit margin
- Not all lenders are alike, ask questions and take notes
- Vet your resources-almost like you would a prospective employee
- Know who your partners are before you win–and encourage them to know one another too. Best way to rally the troops behind you is to have them all on the same trail together
You don’t have to know everything to be successful, that’s what having a smart team of resources around you will provide to your process. Also, don’t be afraid of asking questions, asking and/or paying for help, and admitting you don’t know it all. These are positive strides toward building your growth plan and the team to help you achieve your goals.
As always, we encourage you to engage with your resources and service providers early and often. That way they have time to assist if they can or pivot and refer an alternative option to you when their services aren’t a good fit. Team work makes the dream work!