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Going Private

Tap into a multibillion-dollar market with private-sector contracting.

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This story appears in the November 1999 issue of Entrepreneur. Subscribe »





Selling to a corporation can be either as simple as impressing the CEO's executive assistant with your professionalism, or as difficult as persuading a procurement official you should be put on his or her in-house vendor list.



If you can get a foot in the door, becoming a supplier to corporations could give you a chance to grab a slice of a multibillion-dollar market. But, unlike selling to the government, there's not really a set procurement process to follow when approaching big businesses.



Take Cellular One, for example. The corporation spends more than $50 million annually on everything from pens to cellular network equipment. But it doesn't retain a bid list-Cellular One requests information from the companies it wants to work with.



That doesn't mean you should sit back and wait for private corporations to come to you. It rarely happens, says Tom Nesby of Nesby Associates Inc., a Renton, Washington, firm that helps consumer-driven corporations increase sales within diverse communities.



"The initial bid marketing strategy is to approach organizations and ask to be put on the their bidders lists," says Nesby. "Large corporations have a minority or small-business coordinator or manager who works with women, minority or small-business suppliers," explains Nesby. Smaller firms-with sales of $50 million to $100 million-may only have one individual handling procurement, and that person is your initial contact point.



A time-consuming-yet more effective-way is the alliance marketing strategy, where you build relationships with potential customers by joining organizations they belong to, volunteering to be presenters at seminars they attend, or being featured in the trade journals they read.



Still, there's a critical change to consider in the private-sector purchasing landscape. "The national strategy [among the largest corporations] is to reduce their vendor bases, and that puts lots of pressure on small businesses," explains Nesby.



Carefully target your potential customers. Don't expect to get your first contract for at least two years; when you finally get it, provide a valuable solution. Then you'll be in the loop of the lucrative private-sector procurement market.



The following companies offer subcontracting opportunities for entrepreneurial businesses to provide products or services. The companies we surveyed happen to be some of the biggest names on the market, so subcontracting to one or more of these firms could significantly boost your business.



Next Step





1. The SBA's ProNet Database (http://pro-net.sba.gov) is used by prime contractors who need subcontractors as well as government entities.



2. The National Minority Supplier Development Council (http://www.mddccouncil.org) and its local affiliates have private corporations and small businesses as members with a goal of increasing the business transactions between the two groups.



3. The Minority Business Development Agency (http://www.mbda.gov) operates the Phoenix database, where small businesses are matched with contract opportunities.



4. The National Association of Purchasing Management (http://www.napm.org) holds an annual international conference, and its affiliates hold local and regional meetings, where entrepreneurs can purchase booths as a way to introduce products. You may also contact local affiliates to offer your services as an expert presenter.



5. Commerce Business Daily (http://cbdnet.access.gpo.gov) is published every business day by the U.S. Department of Commerce and lists all major federal government solicitations, contract awards (to their prime contractors), subcontracting opportunities, surplus property sales and foreign business opportunities.



6. Entrepreneur's October 1999 "Biz 101" column contains information on government contracting. Find it online at http://www.entrepreneurmag.com



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