Buy Lines: Plan today for 2010. It's worth the effort
February to March is arguably one of the most critical times in the fiscal year for our government customers. They have lost the first quarter because Congress did not give them new authority to spend. Midyear true-ups, or adjustments to meet what Congress appropriated, are coming, and justifications for budget plans for two years from now will be due in May.
Let's look at the challenges a program manager faces, and how sales and business development professionals should respond.
Congress rarely passes appropriations bills by Oct. 1, which, in turn, limits government managers to month-to-month spending and leaves them unable to start anything new during the first quarter. When Congress finally passes the appropriation acts, triggering the apportionment process, it takes a few weeks for money to trickle down into spending accounts. Thus, a fiscal year that ostensibly begins Oct. 1 does not really get going until February.
By then, the immediate concern for many agencies is obligating money before midyear true-ups at the end of March. But in February, the Beltway buzz is not about how to make this budget year a success ? it's all about next year.
Congress is gearing up for hearings with agency heads. Contractors are analyzing budget numbers and asking what they portend. Which programs are up and which are down? Where will next year's opportunities be? The jockeying begins for position with members of the appropriations committees.
Program managers aren't so much above the fray as beyond it. They already know what's in the budget for next year, they drafted those plans almost a year ago.
A year ago? Yes. In late winter, your government customers are already planning for the budget two years out. In most agencies, justifications for future expenditures and program performance metrics are due by the end of May, in time to create a budget submission for the Office of Management and Budget by the first week in September.
That's why we often say that if your company's technology can make a difference in the effectiveness of a program or a major system, your government customer needs to know about it long before you hope to make a sale. Potential customers also need to know how your capability is likely to evolve in coming years. They need enough detail to develop a plan that connects the dots between your technology and the performance of their program mission.
This is why we say that it's best to structure a federal business plan as a spreadsheet that covers at least three years. As a company matures in this market, the plan will extend to five years, matching the government's program-by-program five-year projections in each year's budget.
Because program managers build investment plans in the spring, they need relevant information in the fall to have time to draft a plan that includes options and trade-offs. Thus, the time for the most creative, strategically important work with our customers is in the fall, when everyone is frustrated with Congress for not passing the appropriations.
For those companies building a business plan, think of this market as a farmer thinks of winter wheat: Plant the seeds in the fall, circle back in the spring, re-plant as necessary. If you do this year in and year out, you'll eventually reap a regularly recurring harvest.
Steve Charles is a co-founder of immixGroup, a government business consulting firm in McLean, Va. Steve welcomes your comments at Steve_Charles@immixgroup.com.