Organizing Your Business Structure and Your Team
By Abraham Xiong
What’s in a name? Something to think about as we left off on ASSESSING YOUR BUSINESS INFRASTRUCTURE-“BEGIN WITH THE ENDING IN MIND”, I was discussing the importance of choosing a befitting name that allows you to market yourself to the government buyers.
Here is an example of a company which I was able to assist. Tasha owns the business, and the business name is called Visionary Construction, Inc. She did a DBA as Visionary Services, Inc. As she started to land small renovation projects, she knew she wanted to keep expanding into other niche markets.
ORGANIZING YOUR BUSINESS STRUCTURE
After a few small construction related projects, she was able to land a $3.1 million security guard project. By rebranding her business name to Visionary Services, she was able to cross into a new niche outside of construction.
- Choose a business entity. In other words, determine what industry your company falls under. Go to www.tinyurl.com/mybusinessentity for more guidance.
- Register as an “INC” or “LLC” with the Secretary of State. Go to www.tinyurl.com/incorporateyourbusiness for more information.
- Get a Federal Tax ID Number (EIN) and fill out the Subchapter S Election Form 2553 if it applies to your organization. Go to www.tinyurl.com/myeintoday for these.
- Open a business bank account in your company’s name. Do this as soon as possible after applying for an EIN.
- Order a corporate kit that will include stock certificates, by-laws, articles and a seal (Inc. or LLC). www.corporatekit.com is good for this. You will need this when you apply for your certifications.
- Create an organizational chart that accurately reflects your firm. You’ll need this for insertion into proposals and other corporate matters.
- Get all of your business licenses and permits in order. You will need to verify what kind of licenses and permits are required based on the locations in which you will be doing business. This will be part of the documents you submit for certifications.
- If you plan on doing business out of state, register as a Foreign Corporation in those states. https://www.sba.gov/business-guide/launch-your-business/register-your-business#id-find-out-if-you-need-to-register-your-business can help with this as well.
- Get a State Taxpayer ID number. This is used for state income tax in your home state, or state of incorporation. In most states, this is done through the state department of revenue.
- File for an Initial Annual Registration to the Secretary of State. Make sure to renew this each year after incorporating.
- Register all Trademarks, Service Marks, and patents at www.uspto.gov.
I know how much people just love talking about tax and insurance matters! Or…maybe not so much. But if I’m going to help you land contracts, we might as well go over some helpful hints for these areas.
In addition to the steps above, it’s important to square away all your employee, tax and insurance matters.
- Create an Employee Handbook to establish a communication tool between you and your employees.
- Enroll in E-Verify (for all government contractors) at www.uscis.gov/everify
- Consult with a CPA or tax advisor for tax-related concerns.
- Set-up a bookkeeping system through QuickBooks or another government compliant software.
- In terms of insurance, be sure to obtain general and professional liability (among other things).
The above are just some examples of business infrastructure items which you need to put in place. There are other areas which are too many to put down as words.
BUILDING THE CAPTURE TEAM
Alright, so we’ve gone over what’s expected of you, where you want to go, and how your company needs to look. Now it’s time to establish a Government Contracting Capture Team that will place you on that winner’s path in the government market. This is another secret which many small businesses fail to implement. Even if you’re a solopreneur micro-business, you will need a team to build the village you want to live in the contracting world. The following are the skills you’ll need to assemble in a magic-making team:
- A Proposal Writer with literary capabilities to convince a contractor officer who reads your proposal to choose your company over anyone else. Often, a reviewer will choose the winning contractor purely on the persuasive words found in the proposal response you submit. You can learn to write proposals, but I suggest letting the pros do it for you. If you have the resources, hire a dedicated proposal writer. Another way is to outsource this responsibility to proposal writing firms such as ProposalHelper.com.
- A Capture Manager to open doors and build key relationships with agency buyers. This person will lead the full-sales life cycle of capture management; sourcing out opportunities, evaluating the likelihood of success, supporting marketing efforts, engaging key teaming partners, fostering winning relationships, attending networking events, facilitating the proposal process, providing recommendations on pricing, closing the deal and turning the win over to the performance team for execution on the contract. The capture manager is just as important as a proposal writer. Their work will directly drive the success of our business!
- A Brand Manager is aware of the unique requirements which the government has. They understand the government culture and their language. They can write capabilities statements, maintain a website that speaks to government buyers and create collateral which are effective for marketing to government buyers.
- A Researcher/Cost Estimator role is to do research on current projects, forecast opportunities, and past awards. This person knows how to gather data for a win strategy. They can find who won the project 4 years ago, how much it was awarded for and who are the current competitors for an upcoming renewal project. They can help with pricing a competitive bid to position you to have the greatest chance of winning, especially, if it is a Lowest Price Technically Acceptable (LPTA).
- A Project Manager is the person who manages your awarded project. This person helps manage the successful execution and completion of the project. The product/service must be delivered on time and on budget. This person works in the field to help fulfill the requirements of the project. A great project manager will also turn the relationships with contracting officers and program managers into more contract awards. Once your foot in the door, you can leverage it to more opportunities.
- A Contract Manager is responsible for the management and administration of contracts. He/she works in-house and manages the details of the contract. They handle the administration of the contract and support the project manager, compliance officer, and fulfillment team.
- A Compliance Officer works with the legal team, CPA, and fulfillment team to make sure that all compliance issues are followed and resolved in a timely manner. This person should understand the FAR, DFARs, CFR, OSHA, CMMC, subcontracting requirements, cyber plan, bonding, insurance, safety program, work percentage requirements, DCAA audits, quality standards, certification requirements and many other compliance issues. This person can help you avoid costly mistakes and help you to keep the contracts you win by staying in Compliance.
- A Legal Team helps you stay out of trouble, reviews your contracts, teaming agreements, subcontractor agreements, joint venture/MP agreements, helps file protests and many other legal issues. After all, this is called government CONTRACTS for a reason. Everything revolves around contracts. This will be an outsource role to keep your cost low. A good attorney or legal team can cost you from $200/hour and upwards to $500/hour in the B2G marketplace.
You’re probably thinking… Wow, that’s a lot of people! But to get started, I’ll teach you how you can wear most of these hats. There’s no need to hire some of these folks until you need them.
You might want to consider other business matters during the assessment phase as well. This could include: creating a board of advisors and directors, establishing lines of credit, obtaining business loans, or relocating to a Hubzone. All of these suggestions paired with the checklists above will create a recipe for success in landing government contracts.
I have one last item to address with you before we move on to Step Two. This is another secret I want to share with you.
In my beginning quote from Stephen Covey, “Begin with the end in mind,” I have a question for you. What is your end goal?
- Build a legacy company and leave to your family and employees
- Build a company to sell
Depending on which end goal you have, how you build your business matters. If you’re building your business to be left to your family, then you have more flexibility and you can operate with more freedom. There is going to be very little scrutiny over your finances, no board of directors to really worry about, and you can run your company like a “mom and pop” business.
However, if you’re building your business with the goal to sell it one day, then you’ll need infrastructure, standard operating procedures, contract vehicles, key personnel employed, and the proper strategies in place. If you build your business to be sold, then you also have the option of leaving it as a legacy.
Next up I’ll be sharing with you how to identify and utilize important strategies so you will be more prepared to sell your business, should you decide to do that at some point in the future. So stay tuned as we continue with the 2nd Phase of Preparation.
ABOUT THE AUTHOR: Abraham Xiong
Mr. Xiong is a small business advocate, social entrepreneur, executive trainer, blockchain ambassador, technology enthusiast, business coach, and community leader. He is the Founder of GovGenie.com, which is a marketing automation platform to assist government contractors in scaling their companies in the B2G marketplace. GovGenie is offering readers of this article a free trial access: www.GovGenie.com