Subscribe to Entrepreneur for $5

Going Private

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

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

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

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

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

That doesn't mean you should sit back and wait for privatecorporations to come to you. It rarely happens, says Tom Nesby ofNesby Associates Inc., a Renton, Washington, firm that helpsconsumer-driven corporations increase sales within diversecommunities.

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

A time-consuming-yet more effective-way is the alliance marketingstrategy, where you build relationships with potential customers byjoining organizations they belong to, volunteering to be presentersat seminars they attend, or being featured in the trade journalsthey read.

Still, there's a critical change to consider in theprivate-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," explainsNesby.

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

The following companies offer subcontracting opportunities forentrepreneurial businesses to provide products or services. Thecompanies we surveyed happen to be some of the biggest names on themarket, so subcontracting to one or more of these firms couldsignificantly boost your business.

Next Step

1. The SBA's ProNet Database ( is used byprime contractors who need subcontractors as well as governmententities.

2. The National Minority Supplier Development Council( andits local affiliates have private corporations and small businessesas members with a goal of increasing the business transactionsbetween the two groups.

3. The Minority Business Development Agency ( operates the Phoenixdatabase, where small businesses are matched with contractopportunities.

4. The National Association of Purchasing Management( holds anannual international conference, and its affiliates hold local andregional meetings, where entrepreneurs can purchase booths as a wayto introduce products. You may also contact local affiliates tooffer your services as an expert presenter.

5. Commerce Business Daily ( ispublished every business day by the U.S. Department of Commerce andlists all major federal government solicitations, contract awards(to their prime contractors), subcontracting opportunities, surplusproperty sales and foreign business opportunities.

6. Entrepreneur's October 1999 "Biz 101" columncontains information on government contracting. Find it online at

Continue reading this article - and everything on Entrepreneur!

Become a member to get unlimited access and support the voices you want to hear more from. Get full access to Entrepreneur for just $5.

Entrepreneur Editors' Picks