Thursday, February 9, 2012

The Value of Hiring Small Businesses

by Seth Sinclair, Member


There’s no question that working with the federal government is good for small business.  In 2010, the government awarded nearly $100 billion in contracts to small businesses, nearly meeting the Small Business Administration’s goal of awarding 23 percent of all eligible procurement dollars to those firms. 

There’s also no question that working with small businesses is good for the federal government.  Small businesses employ some of the nation’s best strategic thinkers, entrepreneurial talents, and innovative minds.  These businesses create jobs and are a primary reason for the American economy’s recent growth.

Sinclair Advisory Group is proud to be among the many small businesses that support the federal government in its activities.  Our full-time staff and skilled Associates offer federal agencies a high level of value in every contract we are awarded. We believe the exceptional service we provide to the government in return for their investment in us is huge, and easy to measure.

For example, we recently provided consulting support to a Department of Veterans Affairs (VA) medical center that was spending $16 million more a year than it received in appropriated funds.  We helped the medical center develop a new business plan with attainable goals that reduced costs, increased revenues, and included initiatives for growth.  We worked with hospital leadership to set new priorities and objectives for performance improvement; guided them to improve collaboration and communication throughout the facility; and helped them create a culture of accountability. 

As a result of our efforts, the Medical Center ended Fiscal Year 2011 with a budgetary surplus of $3.7 million; improved their overall performance by 15 percent; significantly enhanced communication throughout the organization; and established a new leadership and governance structure that will continue to generate new strategic initiatives and additional cost savings for years to come.

It’s not easy, however, for small businesses like ours to do business with the federal government.  As a small business owner, I’m often asked to compete against larger firms for contracts, which have entire departments to deal with the large amount of paperwork required to successfully compete for contracts, and to manage them once they are awarded. 

In addition, budget reductions and threats of additional cuts are taking their toll on federal agency spending. Many agencies have significantly reduced the funds they expend on contracting, including contract offerings for which all businesses can compete and those set aside for small businesses.  Large companies, however, are better prepared to weather the storm than small business, whose client bases are not as diversified.

At Sinclair, we know times are tough, and we understand why federal agencies are reluctant to issue contract solicitations, especially those set aside for small businesses, in this budgetary climate.  However, we urge decision-makers to remember that SAG has the knowledge, skills, and proven abilities to improve the effectiveness and efficiency of federal agencies.  Our work provides a remarkable return on the government’s investment in us—a return that will repay agencies’ initial expenditure many times over.

Albert Einstein once said, “In the middle of difficulty lies opportunity.” Federal managers willing to seize the opportunity to strengthen their organizations during this time of budgetary difficulty will find their courage amply rewarded.