Small Business Mentoring And Social Networking

 

A Mentor's 18-Year Comparative Review of The SCORE And MicroMentor Web Sites  

By Ken Larson

SCORE

From 2006 to 2011, I supported SCORE as a volunteer counselor.  During some years I had several hundred clients. The web site was dynamic, fast, easily accessed and fairly simple. 

SCORE is a 501(c)(3) nonprofit organization and a resource partner of the U.S. Small Business Administration (SBA). The web site operation is run from SCORE HQ in Herndon, Virginia.  Only U.S. Citizens are eligible to participate since it is heavily funded by SBA government tax dollars.  

SCORE management elected a complicated redesign of the site in 2011. The original design of the site was radically changed.  

I was part of the system conversion test team as a high volume mentor. I warned the conversion team that my tests were failing, I provided detailed data on necessary fixes. The site was rolled out in May of 2011 and crashed.  I moved on to MicroMentor to continue my volunteer work. 

I rejoined SCORE in March of 2019 principally to handle veteran cases referred to SCORE by the SBA.  I continued to conduct my Micromentor volunteer work.

  

To once again become a SCORE counselor,  I underwent a new member  background check and a two week training program.  I found the ability to see a client profile to whom I was not connected was gone.  SCORE management now screened mentor requests and decided which mentor should get them. 

Every exchange with an entrepreneur is required to be reported by the mentor. The number of hours expended and background provided to the entrepreneur on the content of a conversation is necessary.  A code of ethics training course on conflict interest is required every year for all mentors. 

40% of my clients now come through SCORE. These are mostly veterans and other small businesses who are pursuing small business federal government contracting and small business innovative research programs

MicroMentor

MicroMentor is a "Two Way Street" meeting place for entrepreneurs to select a mentor and propose a mentoring relationship and vice versa. I have been a Mentor on MicroMentor for 11 years, joining the site when the SCORE web site crashed. 

MicroMentor is an extension of the world wide NGO, Mercy Corps . The MicroMentor web site operations are managed at MicroMentor facilities in Portland Oregon. 

Both mentor and entrepreneur can see each other's backgrounds and initiate the process. Thereafter, with no capacity for attachments and a perceived need for privacy by many,.the exchange generally moves to email and evolves in a manner the customer support organization does not see.

With the discontinuation of the Mentor Rating feature, MicroMentor site management gets little feedback from entrepreneurs on the quality of the help they have received unless they (the entrepreneur) make a point of commenting by contacting customer support, or  marketing and PR staffs contact individuals entrepreneurs. 

Thus, in its simplest form,  MicroMentor is a bulletin board of individuals who seek help and those who are willing to provide it if they so choose, while looking at each other's profiles.

The MicroMentor Q&A feature is a neat catalyst that promotes exchanges and offers the opportunity to exhibit entrepreneur problems, interests and challenges, as well as mentor knowledge and expertise. It fosters a healthy learning environment in itself by simple observation and allows a human interaction dynamic to occur.

Customer support and control of spamming has been superb. MicroMentor Q&A is a very under-rated feature of the site. 

MicroMentor is international. Participants throughout the world have varying outlooks and skills, based on their culture, customs, values and conditions. 

The natural dynamics of human interaction when a match occurs and when circumstances exist at the time for potential success is where mentoring succeeds. 

The system promotion, volume and reach are its greatest assets in creating the probability that positive mentoring dynamics will occur.  The ability of entrepreneurs and mentors to see one another's backgrounds and communicate directly is a major asset of the site. 

60 % of my client now come through MicroMentor. 20% of those are on the continent of Africa in multiple countries. 

Integrated Social Networking 

The vast majority of my cases over the last 16 years have come to me at both SCORE and MicroMentor from social networking on the Web. LinkedIn, in particular, is a vast reservoir of clients and referrals.

3 out of 5 MIcroMentor clients with whom I work already have a profile on LinkedIn when I begin working with them. If they do not, I suggest they create one. In my view,  a LinkedIn individual and company profile is a vital part of any small company marketing plan, since it is the largest professional business web site in the world and it is FREE.

My two blogs, "Rose Covered Glasses" and "Smalltofeds" generate mentorship users as well by referral. Both blogs are free to me  on Google except for a $10 dollar annual fee to own the "Smalltofeds" domain name. That fee has not changed in 15 years.

Were I to recommend any topic for Mentor and Entrepreneur  training, I would suggest social networking guidance. It has been, and will continue to be, the wave of the future. Why Social Network To Promote Your Small Business?

Business Ethics Feed Government Records of Past Performance

Previous discussions at this site have emphasized the importance of maintaining a solid past performance rating to meet award criteria used by every federal agency when granting small business contracts.

Your Past Performance Record

We have also highlighted the importance of maintaining solid ethical business practices in dealing with customers and industry partners.

Maintaining an Ethical Company Image

This article will discuss the practical aspects of achieving the above, the associated challenges and how not meeting them can jeopardize your industry reputation and business success.  

IGNORANCE ON POLICY AND REGULATORY MATTERS IS NOT AN EXCUSE

The small business faces a front-end-loaded and ongoing learning challenge in understanding the Federal Acquisition Regulation (FAR), Cost Accounting Standards (CAS), Unallowable Costs, Organization Conflict of Interest (OCI) many other similar policies the federal government invokes. 

A continuous learning process must include evaluating the impact of these requirements, developing consistent processes and systems to meet and maintain them or risk poor ratings on proposals, audits and performance; even the denial of an invoice payment.

In short, the government has the right to audit, examine and approve your internal operations for conformance to the law before granting a contract or paying a bill.  These are not preferences by contracting officers.  They are federal contracting laws.

The astute small business learns the law and incorporates compliance in its business practices.

CONTRACTING PERSONNEL IN ACQUISITION ROLES HAVE VARYING LEVELS OF KNOWLEDGE & PROFESSIONALISM

The US Government and its prime contractor cadre form a massive professional base.  Although they conduct training in policy and regulation to their acquisition professionals, these professionals are rotated frequently and/or encounter contracting authority as only one role among many in their principal professional endeavors.

Government Contracting Roles

Small business systems are unique to a company.  Documenting them and conveying their compliance to regulations in a clear, lucid way to auditors, agency buyers/contracting officers and other government customers is a vital part of avoiding misunderstandings regarding compliance issues.  

An additional concern with prime contractors is protecting intellectual and proprietary data, such as rates and factors, while participating in the assist audit process used by the government to avoid risk of undesirable disclosure from one firm to another.

If, during the course of marketing, proposing and negotiating government contracts with government and prime contractor personnel, a small business encounters lack of professionalism, misunderstanding of the regulations or defiance of them, the occurrence must be escalated to higher authority with tact, judgment and the long term objective of not only obtaining new business, but staying in business. 

Managing Government Teaming Relationships

DISCLOSURES ARE MANDATORY

Federal Acquisition Regulation (FAR)  52.203-13 in 2008 made mandatory that contractors must disclose past, present or pending violations of contract law to the government.   Not adhering to this requirement can be costly in terms of poor past performance records, legal expenses and financial judgments.

FAR 52.203-13 (3) - Mandatory Disclosure

The Truth in Negotiations Act

TRAINING IN GOVERNMENT REGULATIONS IS A GOOD INVESTMENT

As fast as things move these days if we don't train and communicate effectively we are running very high risks.  The modern era in which we live demands that training be sophisticated, interactive and responsive to changing times. It should evolve out of core company processes and contain feedback mechanisms.

Some training will be global, such as policy, corporate ethics and human relations. Other training will be specialized, such as changes in law, company policy or technology by functional areas.

Principal among the topics at the head of the list for generic training in the art of something would be "Communicating Effectively" to employees to customers, to regulators; both orally and in writing.

Small Business Company Trainng

SUMMARY

Small business must evaluate regulations then communicate and enunciate a company ethics policy and processes that insure compliance with laws and regulations, training personnel on them in the process.

In doing so, disclosures will then be positive and the business will not become the subject of negative press releases by a government agency. (Examples below)


Portrait of a Crooked Government Contractor

Star Power And The Military Industrial Complex

Work Authorization Is Key To Contract Management Process

The execution of a contract (signing by both parties) is a key benchmark in government contracting. It triggers several events such as the start of the period of performance and the delivery schedule time period. Execution begins a billing period start date, and contractual obligations by the government and the contractor.

Establish an internal document to your company that contains the pertinent data for the contract and assigns it a unique contract identifier in your business system. This is necessary for billing and cost collection purposes as well as government audits. 

Astute government contractors do not allow effort to proceed or cost to be incurred on a particular contract until such a document is generated, signed, approved and distributed by a company official assigned the duty of releasing the contract for performance. 

Such documents are commonly called "Work Authorizations", "Release Orders" "Production Release Orders" or a similar term to benchmark the new business and begin performance, accounting, and time and materials accumulation on the contract. 

Any cost or supplier commitments prior to a signed contract are considered pre-contract costs by the government under FAR and require special authorization by the PCO under the contract. They cannot be billed until the contract is signed. Incurring pre-contract costs without authorization is high risk for the contractor. 

Any work or supplier commitments outside the scope of the current contract documentation are also high risk without a negotiated contract amendment adding the scope of work to the contract or government authorization for the use of designated management reserve.

Sarbanes Oxley regulations and other recent government laws regarding corporate responsibility have made control of work authorization and record keeping important factors. Keep in mind that a small business past performance record begins when a contract is signed.  This record is maintained by the government and is updated as deliveries and performance occur. 

You should begin your internal project management record on each contract by attaching all the necessary information for your performing organizations and support functions to begin doing their jobs. 

A copy of the contract should accompany the internal release to key functions in your enterprise. The master should be filed in your central files. Some companies perform work authorization electronically. The government is moving in the direction of electronic record keeping as well.

Marketing to Achieve a Small Business Set-aside Government Contract

Marketing is one of the greatest challenges for the small business federal government contractor. We have previously discussed the federal government marketing process at the following articles:

Insights to Succeed

Small Business Government Contract Marketing

Customer Relations

Techniques for Product Development

This posting will address sculpting a government contracting business opportunity to the point where it becomes a sole source or small business group-designated set aside procurement.

GENERAL CONSIDERATIONS

Small business group-designated procurement is far more frequent than sole source contract awards.  Agencies must prepare special justifications for sole sourcing and those most frequently approved are for Hub Zone and Small, Disadvantaged [8(a)] firms (see table below).

Small business group designations are beneficial to firms who hold them by enhancing the probability of an award through agency restrictions on prime contractor bidding to only those who hold the group designation. Others may bid as subcontractors to the prime but the prime small business contractor must be capable of performing at least 51% of the total effort in terms of work scope, hours and dollars.  

 

In either sole source or group-designated marketing, an agency making the buy must be convinced that sufficient capability exists in a single company or in the small business designated group community to set a contract aside. The agency must be convinced early – before a formal procurement announcement is published on SAM Contract Opportunities  

Marketing to achieve a limited competition under a small business group designation or eliminate competition under a sole source contract assumes the marketing enterprise has one or more of the following federal government set-aside designations:

DESIGNATION                                                         TARGET

Small Business                                           (Group Set Aside Potential)

Small Woman-Owned Business                 (Group Set Aside Potential)

Small Veteran-Owned Business                 (Group Set Aside Potential)

Small Disabled Veteran-Owned Business  (Group Designation Set Aside Potential)

Small Hub Zone Business                          (Sole Source and Group Set Aside Potential)

Small Disadvantaged Business 8(a)          (Sole Source and Group Set Aside Potential)

Federal government procurement is further classified under the SBA Small Business Size Standards in terms of North American Industrial Classification System (NAICS) Code, number of personnel and/or annual sales. To determine whether a firm qualifies for a given bid, note the NAICS for a given solicitation and download the SBA Small Business Size Standards the Box Net “References” Cube in the right margin of this site.

Part of the sole source or designated group set aside marketing task is to suggest to the agency the NAICS Code (hence the size standard) for a prospective procurement.

Registering to bid government contacts and establish sole source and group designations may be achieved using guidance in the below articles:

Small Business Set-aside Designations

Registering Your Business For Government Contracting

Hub Zone and Small Disadvantaged Business 8(a) designations are lengthy certification processes. The remaining designations in the above table are self-certifying at the above government contract registration web site, and are verified by site surveys and bid vetting for each solicitation prior to contract award. 

EARLY REQUIREMENT TARGETING IS THE KEY TO SUCCESS IN SET ASIDE MARKETING

Effective set aside marketing reaches the agency decision makers with technical, budget and schedule authority before a synopsis of the requirement is posted on SAM Contract Oportunities. 

The objective of this form of targeted marketing is to get concurrence from the government to set the program aside sole source if the company has an 8(a), or Hub Zone Certification or reserve it by one of the above group designation classes to eliminate the prospect of full and open competition involving large business.

• Become known to targeted agency personnel by visiting their program offices and meeting the decision makers.  Bring a capability statement:

         Your Capability Statement for Government Contracting

• Present your qualifications openly, objectively and specific to their needs.  You must determine what those needs are through market research, trade magazines, research on what they are buying on SAM Contract Opportunities, as well as postings on their web site that are future-program oriented.

• Subscribe to periodicals like "Washington Technology" and other trade magazines.  Observe agency trends and analysis that impact your market segment.  There have been set aside programs marketed by small companies through acquainting agency management and technical personnel with capabilities they were not aware existed in the small business community or fulfillment of needs they in fact did not know they had.

• Pay particular attention to SAM Contract Opportunities "Sources Sought" or “Requests for draft RFP Comment”  on programs that have yet to be formally solicited. Obtain an appointment to present your capabilities to the decision makers (not the gate keepers).  Be courteous to contracting officers but understand they are not the individuals who make source selections. Understand that once the requirement is formally published on SAM Contract Opportunities the gate closes on informal visits to the customer and the competition begins in the form of proposals by competitors.  It is too late at that point to set the program aside for a sole source or a small business designation if it has not occurred by the publication stage.

• Cultivate teaming relationships with other firms in your industry and look for early opportunities in agencies, not only to prime a program but to bring a team of qualified contractors in lesser roles to fulfill them with you or join a team being led by a more experienced firm:

         Small Business Government Contract Teaming

• Understand the small business start up past performance challenge and work to meet it:

         Understanding the Past Performance Challenge

• Attend small business outreach events by agencies and prime contractors.  Stay attuned to who is attending and research their needs and requirements.

• Make a point to be present at bidders' conferences for existing solicitations that you may not choose to bid but which may lend insight into the agency needs and prime contractor relationships in the future.      

SUMMARY

As a small business becomes known in the federal government contracting community, successful marketing of sole source or group-designated business becomes easier, but it is always a challenge due to the need for taking early action in windows of opportunity.  Find those windows and communicate capabilities to the decision makers and industry team members who can help you.  

If you are eligible for any of the designations discussed in this article, make small business set asides or sole source procurement a key element in your marketing plan. 

Baseline Management in Government Contracting

It is in the long term interests of astute contractors to assist in contract baseline management. The only way to achieve such an objective is through sound technical, cost and schedule definition and control via an iterative process with the government. This article will address that process.

SOLICITATION AND STATEMENT OF WORK BASELINE

If you are selling a straight commercial product off the shelf, the problem of baseline management is minimal, assuming your product meets the specifications required and you deliver on time. Is is during development programs for new products or service contracts involving labor supplied to the government that lack of definition and poor communication are high risks. The initial benchmark for managing this risk is in the government solicitation and statement of work.

A wise customer farms the preliminary draft solicitation and statement of work out to prospective bidders and requests comment. A wise supplier is constructive, yet critical in pointing out weaknesses in the document.

Part 1, Section C, is where the technical specifications and statement of work are located in the solicitation and will reside in your negotiated contract.Without a well written Statement of Work (SOW) and associated supplies and services specifications there is unacceptable risk in the future contract and is it exceptionally high risk to bid or contract the job. Both the contractor and the government must come to an understanding regarding the scope of effort to be performed. That understanding is conveyed in the SOW and confirmed in the specifications referenced therein. A good SOW should have the following principal attributes:

* Clear identification of the products, services, skills, materials and performance factors required to complete the contract

* A description of the conditions under which the contractor will be required to perform and any related environmental or location factors

* Specific references to product specifications that govern an acceptable product or services performance outcome and delivery acceptance

* A schedule for the contract that identifies discrete delivery dates for products and specific start and end dates for supporting labor.

* A precise description of government furnished material or facilities required and when it will be made available to the contractor.

If your customer does not provide the above, offer a revision to the document during the comments period, during your proposal or during negotiations that represents a version to which your company will commit. Do not let the fact the program is competitive sway you from the facts. Signing off on a poorly written SOW results in a difficult contract to manage, a high probability for disputes during the contracting period and a poor past performance record you will have to deal with in the future on other jobs.

You should also do a complete review of the Contract Line Item (CLIN) Structure in the solicitation and cross foot SOW requirements to insure the scope is covered by the CLIN'S.

Please see the following article on how to perform this analysis:

Contract Line Items - The Heart of Your Contract

NEGOTIATION BASELINE

The following article discusses the standard template for negotiations through which government contracts generally pass:

Government Contract Negotiation

During the audit, fact-finding and subsequent negotiation steps, a growing definition of the contract occurs and a clear understanding between you and your customer evolves. If you find the process slow and unknowns frequently surfacing, that is a barometer of future difficulty unless the issues are resolved. Technical work scope, schedule, cost and terms and conditions regarding inspection and acceptance as well as payment provisions are especially sensitive.

CONTRACT AWARD BASELINE

Signing the contract represents full agreement on the proposal and conclusion of negotiations. Award is the benchmark baseline for contract performance.

BASELINE MAINTENANCE - THE CHANGES CLAUSE

During the period of performance on a development or services contract, effort does not always go as planned. The article on Earned Value Performance Measurement (EVMS) at this site is one technique to control this situation:

Earned Value Mangagment

Not all programs warrant EVMS or have the funding to perform that type of control. The simple rule of thumb is that the changes clause in your contract allows you to request additional funding and schedule relief, as well as a modification to the SOW if you are being driven by customer directed work scope change events to depart from the baseline to which you committed at contract award.

To the extent you do not remain sensitive to this provision, on a firm fixed price contract you will lose money. On a cost plus and time and materials type contract you will consume funding at a higher rate and faster than the contact baseline anticipated and your customer may or may not be able to provide additional monies when the ceiling amount on the contract is reached. At that point in time it is too late and everyone is disappointed.

The above occurrences are collectively known as "Scope Creep" in project management circles.

THE DIFFERENCE BETWEEN BUDGET AND FUNDING - (Limitation of Funds and Funding Exposure)

Many federal contracts are funded incrementally, usually based on the government fiscal year that runs from 1 October to 30 September. Although the government may negotiate dollar price ceilings for cost plus and time and materials contracts or firm, fixed total price arrangements, the contracts themselves may be incrementally funded, particularly if they extend over two government fiscal years.

A contract may contain negotiated prices or a cost ceiling but also specify an incremental funding value. The contractor is required to inform the government when actual costs incurred plus obligations to suppliers or payroll on a specific contract reach certain thresholds of the current incremental funding specified in the contract (usually 80%). The government is then obligated to further fund the contract. In the event the contract is not funded further, the contractor has the right to stop work before he exceeds the incremental funding.

Some contractors choose to operate on "risk," continuing to perform on a contract while exceeding the incremental funding in booked cost and obligations. The government is under no obligation to reimburse the contractor for amounts exceeding incremental funding.

Nearing the end of a government fiscal year, a contractor may find delays in funding reaching all the way to congress. This situation must be managed with the government contracting officer.

If a contract is not funded to continue and the contractor has performed to date in accordance with all required terms, the government retains the right to terminate the contract for the convenience of the government. This requires a special notification to the contractor from the government and usually occurs due to changes in government priorities. The contractor may then bill the government for all costs and obligations to date, plus any direct and indirect extraordinary costs associated with business disruption, termination administration, employee layoff cost and the like. Terminations for convenience are very expensive for the government. Nevertheless, limitation of funds and funding exposure must be carefully monitored by an astute small business.

To properly manage incremental funding, the business system must be capable of accounting monthly for all direct and indirect costs on each contract, plus commitments to suppliers and employees in the form of open purchase orders and unpaid or un-posted payroll.

Your internal release document should specify the current incremental funding if your contract is not fully funded at award. Further revisions to your release documentation should convey receipt of contact amendments from the government that supply additional required funding to the contract as performance proceeds. Requests for increases in incremental funding are required when the actual booked cost plus commitments to suppliers reaches 80% of the current funding on the contact.

In the event the contact is not adequately funded incrementally by the government, a revision to your internal release documentation should specify a stop work order after you have notified your customer that you plan to cease performance on the contract due to lack of sufficient funding. Notification should be provided to suppliers under your contract with a stop work to avoid their incurring additional costs for which you are not receiving funding from the government. Be specific with a stop work date to these suppliers.

IN SUMMARY - KNOW WHERE YOUR ARE AND WHEN TO SAY "NO"

"Scope Creep" can kill a contract, a customer relationship and a past performance record, all of which are important to your business. Stay in front of "The Scope Creep" by communicating positively with your customer to control your baseline, keeping cost, schedule and technical performance integrated and synchronous.

Six rules of Thumb to control "Scope Creep":

1. KNOW - The contract value and its ceiling amount

2. KNOW - The incurred cost to date and commitments

3. KNOW - The scope of work and whether or not your current efforts are supporting it or some other objectives

4. KNOW - The estimated cost at completion based on where you are at today

5. KNOW - Your customer and who among the customer population is prone to direct out of scope effort.

6. KNOW - WHEN TO SAY "NO" to "Scope Creep" and say it officially in writing to the contracting officer specified in your contract.

5 Principal Factors in Forming a Small Business Federal Government Contracting Company

Individuals and groups often ask what conditions drive the right time to form a small business federal government contracting enterprise. 

They may be working in the venue for someone else. Perhaps they have discovered a need in the civil agencies or defense markets they can fill with a product or service being provided in the commercial sector and feel they could expand into the government marketplace.

A contractor moving from project to project in government contracting as an individual often asks, “Are conditions right to form an enterprise?" 

Starting a government contacting company may seem a logical extension of the work one has done previously so the transition appears easy enough.  What must be learned very quickly is the business planning, marketing and competitive analysis aspects of operating an enterprise, as opposed to single person efforts. 

Industry teaming, having others work for us and dealing as a company instead of a person are all challenges. The adjustments in outlook and in the development of a client base as a company progressing to profitability pose challenges.

This article will suggest factors to consider in determining if the time is right for you to form a small business federal government contracting company. 

1. EXPERIENCE

Small business federal government contracting is not rocket science - to succeed one must take what one does well in the commercial marketplace or what experience leads one to believe one can plan successfully as a commercial enterprise and then apply it in a slightly different manner from a business perspective to accommodate federal government contracting requirements.

Very few companies enter federal government contracting without some commercial experience and success or prior professional employment.  Very few start ups entertain initially contracting exclusively to the federal government without commercial work or other employment to sustain operations while the more lengthy government procurement process is being pursued.

Introducing Federal Government Contracting

2. DEFINITION

There is often confusion regarding the definition of the term, “Contractor” in government work. The term is used in a conflicting manner to describe companies, individuals and business relationships. It has different connotations within corporations as opposed to government agencies, and is often confused with terms like “Subcontractor”, “Supplier” or “Vendor”. 
The article linked below defines the term, “Contractor” and discusses the regulatory factors and practical considerations related to use of the term from a small business federal government contracting perspective:

What is a Small Business Federal Government Contractor

3. STRATEGY

Consider carefully a product or service area in which you have experience and talent as well as for which there is a demand.  Make it in a field in which you would enjoy a long term involvement.  Then give your small business company concept the following test:

1. Do you have a product or service niche in mind?

2. Do you believe you have a market for 1 above and the means to reach it?

3. Are you willing to develop a business plan using the tool kit linked below to validate 1 and 2 above before you launch?

How to Write a Business Plan

Business Plan Samples

If the answer to the above questions is “Yes”, take the actions indicated above, observe the results, and make an informed decision on whether or not to proceed.

4. FORMATION

Executing the below process establishes the firm officially on paper and commits the owner(s) to the enterprise:

For the majority of individuals who are starting single person or no more than 2 or 3 person operations, a Limited Liability Company (LLC) registered with the state and with the federal government is recommended.

It will separate personal assets from company assets and protect them. When product or services sales begin generating revenue an LLC has many tax advantages.  It can be registered as Sub Chapter 'S' for tax purposes and revenue and the expenses can be passed through to personal tax returns, paying no taxes as a company. The double taxation issue prevalent with many of the other types of incorporation is avoided with a Sub chapter “S” LLC. An LLC assists in limits your personal liability for debt and court judgments that may not fall in your favor.

Representing the business as a company allows pursuing financing as an enterprise. You can think of a creative name for your LLC and you can complete the articles of incorporation necessary to bring your enterprise into existence. The term, "LLC" must conclude the name of your company if you decide to form such an organization.

Free instructions for registering in your state and federally with the IRS are available at the Box Net "References" cube in the right margin of this site. You will receive tax and employer identification numbers by registering your business.

A very common mistake is not generating and executing an operating agreement among the founders if there is more than one person involved in forming the company. An operating agreement, is a separate document, not controlled or required by the state or the federal government, but very important to your company.

It should be a simple,  straightforward document  you and the prospective partner(s) can draft  yourselves addressing such  matters as % of ownership, how revenue will  be distributed and other  general matters, as well as who can commit the  company in the form of  credit cards, employment offers and who signs  checks on the company  account and other administrative matters. Buying out a partner should also be covered as well as adding new members if the need arises down the road.

I have seen many enterprises fail or go through terrifically hard times   due to lack of an operating agreement. The parties should sign it after a review by a lawyer. It should then be notarized and made an official   part of the company file. You can download a generic operating agreement at the Box Net "References" cube in the right margin of this site.

It is for an LLC but you could modify it for other types of corporations.  You can feel free to borrow from the sample or supplement it as you see fit. It is fairly comprehensive in order to cover most business situations and there may be elements of the example you feel are not necessary.

5. TEAMING

You will not be able to go it alone.

Evolving niches and industry teaming leading to larger projects as part of multiple company efforts is a necessity in forming a small government contracting business, particularly in the services venue.

Synergism is paramount in teaming with any size company, whether in a lead or subcontracting role. There should be technical, management and market segment similarities between you and any company with whom you are considering teaming. Your prospective team member ideally will not be a direct competitor; rather a business in a related field with whom you share a mutual need for each other’s contributions in pursuing   large-scale projects.

Relationships must be developed with primes and other small businesses that can help you, team with you and keep you in mind as they search for success. That takes time, patience and open-minded, out of the box thinking. It also takes more than a   Non-Disclosure Agreement (NDA), a teaming agreement (TA) and a proposal   to succeed. It takes dynamic marketing and communication with strong   partners and hard, innovative work. Nice buzz words you say - but it is the truth and you have to find what that truth means to you.

Small Business Government Contract Teaming

SUMMARY

Carefully consider the 5 factors noted above when evaluating the formation of a small business government contracting company. For additional details on any of the factors, please see the free book in the BOX at the right margin of this site.