DoD Contract Academy
Shelley Ware & Pursuit to Profits (Podcast Transcript)
49:20
 

Shelley Ware & Pursuit to Profits (Podcast Transcript)

government contacts profits Sep 17, 2022

[00:00] Richard C. Howard: Hey, guys, Richard here with government sales momentum. Before we get started, I just wanted to introduce our next guest. She's Shelley Ware. She owns Pursuit to Profits. She has a really interesting story, not only about how she got into government sales, but she has a really interesting niche within the government sales process. And with her, it's really understanding the money piece. So she has something that she calls the money story that she's going to walk us through. It talks about just how important things like negotiations are and really understanding the nuances of the solicitation. You're writing a proposal for what's involved in the contract and how your company can either lose profits or gain their profits once you're on contract. So I think you're really going to enjoy this. And if you're listening for the first time or you're a current listener, we want to let you know that we do have a new program coming up. Starting at the first of the year, we're going to be working with five companies over a three-month period, everything from developing your contract and business development strategy to building your pipeline of leads in targeted organizations. This is really going to jump-start your government sales. And if you'd like to be part of that program, you can reach out to me directly at our website, Dodcontract.com, fill in the consultation, and we will absolutely get back to you. Thanks for tuning into the government sales momentum podcast. Today I'm with Shelley Ware with pursuit to profit. Hi, Shelley.

[02:45] Shelley Ware: Hi. Good morning.

[02:47] Richard C. Howard: How are you today?

[02:48] Shelley Ware: I'm great.

[02:48] Richard C. Howard: Good. And I already knew that because we talked before the podcast, but now it's all good. So, Shelley, we talk twice. Once before the podcast and once before this Shelley does a lot of great work. So what I wanted to ask you first and foremost is maybe tell the audience a little bit about yourself, your background, and then we can get into what pursuit the profits does and what your specialties are.

[03:11] Shelley Ware: Absolutely. Happy to. Well, I grew up in northern Minnesota, where every day in the woods and on the lakes is an adventure. And the theme of adventure has continued the rest of my life. I did go south for college to Iowa, and then I showed up at the Air Force recruiting office a couple of years after I graduated with a degree in acting.

[03:34] Richard C. Howard: Oh, fantastic.

[03:35] Shelley Ware: Thank goodness. My dad wanted me to be able to feed myself, and I also double majored with business.

[03:40] Richard C. Howard: Oh, that's awesome.

[03:42] Shelley Ware: So I did five years as an Air Force fuels officer managing the refueling operations at a couple of different bases, and I loved it. The interesting thing that happened during that time is I did notice that the financial reports that we were having to deal with gave incomplete information. And so I went to the commander of resource management and suggested an addition to his reports and that theme kind of carries through the rest of my career. After I was done there, I went into government. It was in Arizona. And I handled for department all of the financial oversight, the accounts, payable, receivables, budget forecasting, and I also managed and administered all of the contracts.

[04:32] Richard C. Howard: Okay. I didn't mean to cut you off, but just curious, were you a GS employee?

[04:38] Shelley Ware: No, actually I worked for the county in Tucson, Arizona.

[04:43] Richard C. Howard: Okay.

[04:44] Shelley Ware: And the nice thing is that government just about everywhere in America, and so you're dealing with fire regulations and because that slows down and gives continuity to states and cities and counties. So I learned that, and then I also learned a lot about the contracts and all of that. A lot of the contracting people there were in procurement had the same certifications and the same processes as they do in federal government.

[05:15] Richard C. Howard: Sure.

[05:16] Shelley Ware: I was learning it from being the person on the side that was writing requirements and then negotiating contracts and then making sure the contracts were fulfilled by our vendors.

[05:27] Richard C. Howard: Okay. Yeah, that's a really important piece to understand. And there are a few people out there working in the realm that we work in, helping companies with whatever part of the federal sales process or government sales process they're working on. But it's one thing to understand from a client perspective, and you need that. Right, but I think it's a much rarer skill set to have that you actually experienced it from the government side and you realize you actually know, hey, this is why you may be experiencing the frustration you're experiencing. It's not like they don't want your company. They're trying to figure out how to get you on contract. And these are the obstacles that they come across. And I know we'll talk a little bit more about that during the podcast, but how you can help sometimes the government customer get over some of those obstacles. Right?

[06:16] Shelley Ware: Absolutely. And it's so important and I know that with you coming out of that world, you bring that same kind of sensitivity to the issue of your government client is not doing these things just to be obtuse and to be an annoyance. There are reasons for it. They're not going to sit around and explain it to you. They have their reasons. They have people that they have to report to. There are deadlines during just the government's year that they have to meet. There are obligations to be met on their end. And the more you are aware of that, the better you can anticipate those needs and give them better reports, better data, better information so that they look good. If you can make them look good to their boss, you have started to build a real team and you've started to build a real relationship. And that's what wins in this business, are the relationships.

[07:20] Richard C. Howard: You've really hit it on the nose there. Right. It's the relationship and it's really helping them to do their job. The easier you can make it for them, like you said, the better you can make them look, the better it's going to be. You just got to understand, hey, what do they really need from you? Right. And I know that's one of your specialties. Yeah. Let's continue with your story because it's fascinating. I always love hearing, especially with someone coming from the Air Force because what I remember my Air Force recruiter saying to me, I think I asked about salary. I was in the same going through the recruiter after college and looking at for me, it was off the training school. He was like, Rick, you're not going to get rich in the Air Force, but the Air Force can make you rich. And I didn't know what it meant at the time, but I think that has come true over and over again throughout the year. So yeah, very fascinated in your story and interested to hear what happens next.

[08:09] Shelley Ware: Absolutely. Well, after about 13 years doing that, I ended up in corporate and I had the great good fortune to be able to move east at that point. And I ended up in a major company. That one was Computer Sciences Corporation. I was with them for eight years and I was hired to be the face inside a Department of Defense agency for all of the money questions and all of the contract questions for a particular program. And it was a brand new program. They were extremely anxious at that point because they had just gotten word that the government was extremely unhappy with how the money was being presented and what was happening with the contract. And they were looking at losing a few years of their option years plus any chances to recompete.

[09:10] Richard C. Howard: Wow.

[09:11] Shelley Ware: So it was pretty easy to figure out once I got in there, their invoicing was dramatically behind. Their forecasts were extremely confusing. You could not figure out what the financial forecasts were going to be. And because it was a brand new program and there were people that were brand new to these kinds of roles, they're with a lot of scope creep and not a lot of contract modifications, which is a disaster. So the biggest thing that I found fascinating was for the third place in a row, I discovered that what was missing from all of the forecasting, the financial forecasting, was any concept of accruals. So you couldn't just sit there and go, okay, we've been on it six months. Multiply that times two and you've got what we're going to need for the year. Because they had already obligated so much money, but it wasn't showing up anywhere. It was like every single report I ever saw was missing a column. Those invisible obligated accusts that at that point in time almost always required at least one manual entry in a ledger somewhere and there was no tracking and there was no discussion about any of it. And that was what I had done when I was in the military, when I was in government. And now incorporate was, hey, let's add a column to the forecast so that you can actually see why you can't just easily extrapolate and get to an answer on your forecast.

[10:52] Richard C. Howard: Right.

[10:53] Shelley Ware: Why that's so important when you're dealing with government contracts is because your money has a time limit and all of a sudden you're sitting there and they're going, hey, end of year is coming up, we're going to delegate this. It's timing out or we need it more on another contract. And if you can't justify it, you lose it and then you've got bigger problems.

[11:18] Richard C. Howard: There are some great points, and I know that we talked about how companies are focused on getting that contract right, doing all the work to obtain the contract, but not even close to as much effort goes into, hey, how do I actually manage that contract once I have it? And as you know, you only get one shot at it. If you get a government contract and you really screw that up and you have the wrong type of markers put on your business, it's I would say difficult to impossible to ever recover from that. And just like you're saying scope creep, not having the right mods or not understanding that that could kill your profits and it could kill your business with the government.

[11:59] Shelley Ware: Absolutely. It's huge. It is really interesting. The three big things when you're talking about contracts and managing them and making sure that everybody's happy are quality. Whatever you're producing or building or directing, whatever needs to be the quality they are expecting, that's not always the top quality because sometimes it's just whatever is acceptable, but quality is important. The timeliness of things is important, but I find more often than not that the ability for them to understand what is happening with their money is far more important. And that will kill you on a contract faster than anything else unless it's something truly gross. But honestly, we've seen some pretty big contracts out there in the last ten years where timeliness is not exactly a big thing and the delays just keep going and then the money starts to creep and it gets ugly and very public. But when you're a small company, you can know what your money story is, and it's knowing your pursuit to profits all the way from pursuit, which in the government-contracting world has another meaning. And that is basically everything from the first word of business development all the way through award that pursuit all the way to your profits. Because come on, winning a contract is great, but it's not about the win and it's not about the revenue. Business is about profit. Because without profit, you don't grow, you don't go anywhere, you stagnate, and your company dies. You're right about the profit.

[13:53] Richard C. Howard: Yeah, you're absolutely right. And your money story is it's intriguing because most companies, before they get into federal sales, don't realize that, especially in the government. And I'll talk to the DOD. There's different kinds of money. And some money can be used for research and development, some for operations and maintenance, some is specific to building and construction. And they have different rules associated with them and they have different timelines. Like you mentioned, they can expire. And even within the government, within the acquisitions community, there are people whose job it is only we call them our financial managers. Their only job is to understand the different kinds of money and be able to tell the contracting officers and program managers that this is acceptable, this isn't acceptable for the types of contracts. And that's a huge piece of acquisitions and federal contracting that a lot of companies are learning on the fly after they're on contract with the government.

[14:49] Shelley Ware: And that is exactly what happened when CSC hired me. When I got in there, I had not worked Department of Defense contract before, and I didn't know about the color of money, the types of money which at that point in time we used to call the color of money and the different roles they had and the different timelines they had. And if it was put on your contract at this point, and this is when it was going to expire, but it was going to cross a fiscal year, then you had even bigger problems because there are a lot of nuances to this. The crazy part was that I ended up in an organization where the government finance people didn't understand it either. So I learned it and I taught them and it was really important because by the time we were done we had probably 30 different funding sources throughout the course of a few years because we were doing a lot of test and evaluation for different agencies and it was incredibly complicated. There were over 140 modifications where you're sitting there going, okay, we've got these three, and they're this color of money. It was so much fun for somebody like me. I had the best time unraveling it all and then figuring out how to make it all work and not drop any balls. And when you're a smaller company, it's like, okay, maybe you've only got one or two. And that's great to start because it gets you used to the rhythm of how things happen and the rhythm of the fiscal year, which impacts things so dramatically. And even when you're sitting there watching what the government is going through, going, okay, well, how much longer are we going to have money for? We haven't approved a whole budget yet. We've only approved a little bit. And so you're doing contract mods every time that happens. So you've got two more months and two more months, and then one more month, and then all of a sudden you go, yeah, we get the rest of the year. It's not easy.

[16:54] Richard C. Howard: It's not. And you're right where it's incumbent, I shouldn't say it's incumbent upon the small business, but it can improve your federal contracting dramatically if you can reach out to someone like yourself if they don't have the expertise in house and just to help them understand what the money looks like. Right? A good example would be, hey, you're on contract with the government, but they just lost their funding for the year. Right? For whatever reason, if you understand that, even if you are doing test and evaluation or RDP and E, but they lost that money. But maybe there's an O and M pot of money, if you understand that there's enough gray area within the regulations that can allow some of that money to be used for your company, and you walk them through that and give them the ranks that can all of a sudden open up a new pipeline of funding for your company. And again, it's a rare specialty, but if you can utilize someone like Pursuit of Profits, you could very easily, I shouldn't say very easily, but at least you can create the ability to grab that funding and continue with your contract.

[17:57] Shelley Ware: Absolutely correct. And this is where we run into what I call the pursuit to profits money story. And it has become my passion in all of this. If you as the owner of a company or as the person responsible for profit and loss on a program or a division or you are the guy at the top of the company and you've got to understand all of it. It's really important that you understand your money story for whatever it is you're managing. And you'd be able to articulate it to other people so often I would see everywhere I went. They would have the finance person talk about the money. Your government client is not particularly interested in what your finance person has to say a lot of the time because number one. They speak in finance language and not necessarily in the language where the contracting person understands it. Or the program manager on the government side understands it because they've never been corporate. So they don't always understand all of that and they didn't go to accounting school. And so they don't grasp even what regular accounting terms mean that the accounting people think is so simple. And what I learned through the years of working in all kinds of different areas is how to translate between management and ops and accounting and contracts and make it so that I could unravel it and explain really in language that could cross all the boundaries what was going on with the money. Once the person at the top of the food chain on something can explain in ordinary terms what's going on with the money. That opens so many doors again in terms of the relationship you're going to have with your government clients and they will appreciate it because then they can explain it using the language you gave them to their people around them who want to understand. Who aren't necessarily money people either. If you can explain it in language that goes across the board, you can explain your money story and you understand your money story and you understand the nuances of it. That's where your profit is.

[20:33] Richard C. Howard: Absolutely. Yeah, that's very important. Can you talk about how that translates into because we talked a little bit about what could get lost from negotiation to contract closed out. How does the money story play into that and what would be some recommendations you have for companies that are at that stage?

[20:51] Shelley Ware: Absolutely, I break the stages of the contract lifecycle down into six basic stages. The first one is pursuit and that one for me, and for my purposes goes from business development through proposals. And the big things there, which these are things that I refer to as profit mines and missiles. A profit mine is something that will blow up your profit inside your company and a profit missile will blow up the profit and it's coming in from outside of your company. In the pursuit phase, the first thing that easily can blow up your profit is choosing the wrong contract to go after that one happens far too frequently. Sure. The missile that's coming in from outside is your competition, not always certain what they're going to do, are they going to underbid what's their strategy? An easier way to get a better idea of what's going on is there are some tremendous companies out there that actually that is what they do. They have the Intel on different companies and what's going to happen in terms of the bigger contracts with the Department of Defense or the government as a whole. Some of them even will go down to the state level and help work on that type of thing. The next phase is negotiations. Number one thing that will hurt your profit is not understanding your pricing. It is astonishing how many people that are at the top of the food chain and you're only allowed to bring one or two people usually to those pricing negotiator, to the negotiations before award and they show up and they don't really understand how their pricing was even calculated. And I helped the company a couple of years ago that they were two years in. We were looking at a recompete and they clearly did not understand how their labor rates had been developed and how they were being forced to shift because of the structure they had created around it. It was incredibly complex and they kept saying, but the finance people have told me. And I said, I know that, but the finance people are talking finance and you're hearing it in management and you guys are missing this. So I illustrated it on the board and the finance people were like, that's absolutely correct. And the guy running the program was not a happy camper.

[23:36] Richard C. Howard: Yeah, you got to be on the same page.

[23:38] Shelley Ware: I had an idea that he didn't understand and I felt terrible. But I also was really happy because now we could really get a handle on how to make this better and how to improve their margin because the margin was not doing so well. Sure. The missile on that particular thing for negotiations is customer bias on the part of the government. If they already have somebody that they like, if they've already got a company that they've worked with before, you have to overcome that. And a really great place to do it is in negotiations because that's when you can be building the relationship with the client and that starts immediately. Next step is award. If you don't review your documents, the contract documents, the preliminary ones in advance, if you really weren't paying quite enough attention because sometimes they'll even send out a draft contract, a template sort of a thing with the RFP and you didn't really pay attention. You can end up with a contract and all of a sudden you may have signed it or you may be about to sign it and you can tell you're going to already have to have modifications done immediately or you've got really big problems. You've got to pay attention, you've got to look at them. The next missile in that case are protests. Protests coming from other companies about the award and doesn't happen as often with smaller types of things, but with the large ones it's a common occurrence anymore.

[25:14] Richard C. Howard: You're right.

[25:14] Shelley Ware: Unfortunately, you need to be prepared for that. You need to be thinking about that from the day you start to think about even going after it, okay? Who's going to have what opinions and who's going to fight this? Next step is yes. Next step is execution. And that's where the mind forecasts if you really don't understand, you've got to understand your pricing, you've got to understand your money, you've got to understand the cycles, and you need to know where your accruals are. And then your forecasting can turn out really well. And that builds a phenomenal bridge between you and your client. The missile on that one is scope creep from the government, and they can be famous for this in certain cases. And if you don't manage them and manage their expectations at a sufficient level, your profit can disappear in a nanosecond, especially if they decide to say, hey, you've got this extra million dollars sitting on your contract and we want to buy a whole bunch of we want a whole bunch of parts. Well, the margin on parts is like nonexistent.

[26:26] Richard C. Howard: Exactly.

[26:27] Shelley Ware: Okay, so now here's another thing though, on that, is that if it's a million of one kind of part, okay, that's not so bad. So you just have a couple of people that are working the deal and they get it done. And then as the stuff comes in great, you're talking a million Widgets and it's $500,000 different widgets and two of each. The amount of labor costs that you are going to suffer from trying to handle that is insane. And it depends on the rest of how your contract was structured. If it was firm, fixed price, you're toast.

[27:08] Richard C. Howard: Yeah. And I think something else to point out is as a former program manager for the DOD is we expected companies to push back when we try to modify the contract right, without even officially modifying it. Right. So when you talk about scope creep, when we're bringing up new things that the government needs, hey, it's great if the company just says, oh yeah, we're going to go ahead and do that if they don't know any better because then we don't have to find the funding for it. But for the most part, we're expecting some pushback, right. So if the government is trying to increase or add something to your contract that's already been negotiated and you've already been doing work to a certain degree, they're expecting you to come back and say, okay, well, hey, to do what you're talking about is going to require X, Y, and Z and what do you think about that? That could be another negotiation right there for how you're going to fund the additional work that the government is asking for or products or whatever it is.

[28:02] Shelley Ware: Thank you so much for bringing that up because that is something that so often you run into people that are like, if we push back, if they won't like us and they'll be mad at us and this isn't going to go well and we want them to love us, come on. You don't want them to love you. You want them to respect you. You want them to trust you. You want them to have confidence in you. And if you need unconditional love, get a dog.

[28:28] Richard C. Howard: And it could be the opposite, right? Yeah, it could be the opposite effect. You're not pushing back. Could raise some serious eyebrows on the other side of that table about your ability, your contract knowledge, your ability to deliver. And I've had so many of those conversations with general officers all the way down about what a company is doing, pushing back versus not pushing back, mismanaging the funding, mismanaging the contract, not a position you want to be in. And definitely a company needs to at least have the ability to reach out and grab that expertise if they need it.

[29:01] Shelley Ware: Absolutely. So the next aspect are follow ons. And by follow ons, I'm talking about contract modifications where you get extra money added to your contract to do a little bit more, which is in scope, or you get additional option years added, or you make it through the recompete and you win and you get to do the contract for another five years. All of these things are super important for expanding your business because as we all know, in business, it's a whole lot easier to get more where you're already at than it is to go out there and find somebody new.

[29:35] Richard C. Howard: Absolutely.

[29:36] Shelley Ware: The problem that I see in most companies is your whole team is involved in that. It's not just the guys in business development. Your BD guys are great, but they're the BD guys. You're all business development. Every single person the janitor is business development. Okay. Because especially if your client comes to your building, they want to see people who appreciate their work, who enjoy their work, who are working diligently, and that the place looks like people care. And that can happen. I mean, the person at the front desk, boy, they set the tone for every visit.

[30:21] Richard C. Howard: They sure do, don't they?

[30:23] Shelley Ware: You need one of your sharpest people on that front desk.

[30:27] Richard C. Howard: That's right.

[30:27] Shelley Ware: They need to know who's in the building. They need to understand what's happening in the operator. They are critical, but the whole team needs to understand that as they listen to things from the client, there are so many opportunities that just go on by that they go, wow, let me go tell So-and-so because, you know, they could do a white paper on this and maybe get a sole source contract out of this.

[30:56] Richard C. Howard: Yeah, I feel like what you're saying should be screened from the mountaintops. Right. Because it could get easy to fall into that mindset of, hey, the BD guys are going to handle all this. But it is absolutely, like I say it in just about every podcast episode, government sales is a relationship game. And you're right. Whoever is working with the government team, they are the ones. That are going to have that relationship. And I think it's funny. The best business developers, I consider myself one of those, but the best business developers I saw on the government side when I was PM were when I saw the big DOD or the big defense contractors coming in. They had their own program managers on the contracts, but we'd meet monthly, the good ones. We have a monthly meeting, and at the end of those meeting, hey, is there anybody else that we should be talking to that needs a related skill set or related service? And often we would point them in the direction of, oh yeah, hey, reach out to Colonel So and So because they have something coming up. That's how you find out about opportunities before they turn into solicitations. It's how you find out about them before they turn into rifles and sources sought. And it's a great way to not just influence them in your favor, but they could turn into either sole source contracts or it could also turn into modifications to your current contract.

[32:11] Shelley Ware: Right.

[32:11] Richard C. Howard: Because you're already on contract with the government. It's a lot easier for an office to say, hey, let's throw another couple of million dollars on that contract. You already have to do this related thing, and that doesn't always work out. But it is so powerful to be able to at least ask the question while you're in there. And yeah, I mean, you definitely have the right idea there.

[32:30] Shelley Ware: Yeah, absolutely. Always ask the missile on a follow on is when they're not happy with you and they announced they're going to do an early recompete. It's not a foregone conclusion. Just because they threaten it doesn't mean it's going to happen. That's why CSC hired me, was to stop that from happening. And we did, and we went on. We got all of our options here, and we got a three-year recompete after that for that same work. And it was because of what I did with them and how I completely shifted the relationships, the perceptions and the processes through the whole place.

[33:14] Richard C. Howard: Yeah, that's a good point. Knowing when to because you still have time to recover at that point, and just realizing that putting the work in. Absolutely right. And then also realizing a lot of companies aren't putting that work in. So if you see an incumbent on a contract, that doesn't necessarily mean that's not something you can go after, but it's that relationship piece that you would need to work on with that office to make sure that you know any Intel that you can gain on that other company.

[33:39] Shelley Ware: Right, absolutely. And the last phase is close out. And this is something that almost nobody talks about. How do you actually end a contract? It doesn't happen on the last day. It's like, no, there's stuff that can carry on for one year, two years, five years. They go on a long time because you've got to close the books. You've got to close the financial books. But the big line that I've seen on that is an internal failure to actually handle the property records. If you've been responsible for handling any kind of property that the government has needed you to track and your records of who's got it, where is it, what's its condition at all, iffy I hate to even say this, but I've got to say it. I can't let it go by. All the property that got left in Afghanistan, okay, I wouldn't want to deal with those books. I've dealt with property that had to shift, that went over across four different companies and three different government agencies. And I had to get all seven groups into a place in West Virginia to handle property transfers. And we were literally having people sign books from company to company to company, from agency to agency to agency and then loaded on a truck and ship it out. And that was amazing that we did it. And there was a lot of it wasn't a very pleasant thing because there were people contracts have been won and lost, and people were not happy, and they were not happy to be there, and they didn't want to deal with any of it. But everybody did. Everybody got their act together, was polite, and we got it done. But it was difficult. And if you don't have your ducks in a row on property, your life can be miserable for years.

[35:48] Richard C. Howard: The government takes a huge I should say they are very much focused on accountability of equipment. It's hard on the government side too. And you're right. When you're on the business side of things and you have contracts changing hands, that can make it extremely complicated, definitely you're right. You need to focus on that and make sure that you can explain it because the government will also lag right. So they know they have accountability coming up, but they're always changing positions with different personnel. So two years might go by, and then someone gets in there and says, hey, nobody's accounted for this equipment for the past two years, and now it's like you said, changed hands, and somebody's going to have to do that. So from a company perspective, yes. Knowing for sure how bad or at least tracking everything is going to make your life a lot easier because it's.

[36:33] Shelley Ware: Difficult and it's expensive. And that is another way to just kill your margin and then the last missile that I'll mentioned are in close out, and that's the Club X. And that's when they said, well, you didn't do what you said you were going to do and need to meet this requirement. And they're like, you wanted it painted? We painted it the color you asked for. But then the PM wandered by and said, that would look so much better if it was blue. And you went, we can make that happen and you painted it blue that was not part of the requirement. Guess what? Not only do you have to remedy that and get it painted the right color you got to suck up all the cost for that. They ask for their money back. Paint is not usually the issue. It's usually something that was out of scope and they should never have done or they did, but they didn't go to the contracting officer and say, hi, we need to have a contract modification because your people think that this is important enough to put on this contract and do it. And if they disagree or they don't think it should have been on that contract in the first place but definitely you didn't go to them, you didn't get a mod. They want the money back.

[37:56] Richard C. Howard: Yeah, I agree. Yeah my two comments on that are the words matter just like you're saying what is in the contract because that is what inevitably you're going to be held account too. Now one caveat I will say that and they warn every acquisition officer on this is you can make obligations on behalf of the government verbally or companies can try to hold you accountable to things that you try to say. So they almost warn all of us, just say, hey, I'm not asking you to officially do this, I'm just having a conversation or giving some type of disclaimer before that. So I would just say if you have made that mistake of doing something that is not in your contract because somebody in the government asked you to do it, it might not be the end of the story. Again, you might not get paid for it inevitably and you don't want to be in that position. But if you are there may be some push-back you have available and you just have to talk to the right people on that. Those are excellent points. I don't think I've heard that money story described in as much detail as you just did and I think that's going to be great for a lot of companies listening to this. Could you talk a little bit about pursuit to profits and when would be the right time for a company to approach you and how would you help them?

[39:13] Shelley Ware: They can approach us literally from the moment they think they might want to be in the government arena.

[39:20] Richard C. Howard: Okay.

[39:22] Shelley Ware: And part of that is something that I know you talk about and that is it takes time. You don't just waltz in the door. This is not something that you sit there and on a whim decide, hey, let's go after government contracts. You know, somebody showed me this really cool RFP and we're totally qualified for that and you just kind of have to go, okay, time out, time out. There are a lot of steps that have to happen if you have never done a government contract and you want to go after, especially a federal contract. There are It requirements, there are accounting system requirements. Is your business even viable in the opinion of the federal government? There are checklists for all of this. There's a ton of information. And I know you probably cover this to the degree with people, but it's not something you just waltz into. However, if you talk to me, the first thing I'm going to do is say, okay, so how are your contracts with your commercial clients? What kind of margin do you have there? What are your costs look like? Do you really have all of your expenses built into the cost of the price of a product? How do you do this? Because what you want to do is you want to some of what they are going to do in order to be a viable company to pursue government contracts is actually the same stuff that will make them even better at doing what they do commercially. So by building that part, the government part up slowly in terms of, okay, let's get this, let's get a plan and let's go after these different aspects. But at the same time we're sitting here going, as soon as you get better at your It stuff, that's going to improve this on your commercial side and that's going to improve your margin here. So if we can improve your margin on your commercial side while you're trying to build up and be prepared to go government, then you now have the money to fund yourself to do that, to make that effort. And that foray into the government arena because it is not for the faint of heart, it is not cheap and it is totally doable. And there are totally great opportunities in the government arena for a lot of different companies. But don't just waltz on in there. It doesn't work that way. And the likelihood of your success is really slim. The likelihood that you will financially damage your company is extremely high. If you try to do it without a guide, a mentor, a chaperone, whatever you want to call us, you need us. Because I think people will have gotten the idea by the time since I just ran from everything I ran through that this is a new language, it's a new approach, it's a new way of looking at things. So you definitely need people to help. But I can help at any point in your cycle, wherever you're at because we've been through a lot of this. We've helped people through a lot of this. And it's the kind of thing where it's like if you don't know, it's like, what's a wrap rate? Okay, well, you need to call one of us and we'll get a finance person with you so that they can explain and then they can even help you figure out what yours should be. I had a call about two months ago from somebody who several years ago got a GSA contract and it was to provide a particular type of service. And there were labor rates attached to it so that people could say, I want this kind of person who's at this skill level. And they got the contract. They were so excited only to discover that they couldn't hire anybody at that level for the rates that they had put on their schedule. And so they defaulted on their very first contract with a government agency.

[43:46] Richard C. Howard: Not good.

[43:47] Shelley Ware: Several years later, they decided they would try it again. They felt they knew more, so they called, and they had already submitted by the time they called me. And they said, So we're going after it again. And I said, Great. Who did your rates this time? They said, well, we did. Okay, and how did you figure them out? Well, we looked at what we were doing commercially, and we just took a discount off of that. Okay, so not sure how that's going to go for them, because it wasn't exactly logical, from my perspective. From their perspective, they thought it was completely logical. And that's where if you have never done this and you think it's completely illogical, you probably ought to call somebody to ask.

[44:37] Richard C. Howard: Yes. No, I agree. Like, as you know, government spends hundreds of billions of dollars each year just on small business contracts. And for those companies, the timeline to get on the contract can be long. And I would say most of our clients, the ones that have been successful, have typically had a commercial line of business that have funded them through that process. I usually tell people, you got to plan on twelve to 18 months. It could be a lot longer than that, and it can be less than that, depending on what you're going after. But Boeing has a 100-year plan when they're approaching government sales. Right? So it's definitely the long game. It can be extremely lucrative. But the companies, when they get larger and they start having multiple funded contracts, typically they're hiring people full time with our type of background and building those type of teams. The problem with small businesses, they don't have two or 300 grand a year to put on each person they're going to put on, but they still need the expertise. So that's where reaching out to a pursuit of profits or to us for our specialty. That's where it can really benefit them because it can give them the expertise that the big defense contractors have at a rate that they can afford. And get that expertise that they really need. Like you mentioned. To not only get on contract but please manage that contract effectively. Understand what you're signing up for. How can a company because I know we're coming close on time here how can a company best reach out to you? What is the best way to reach pursuit to profits, to reach you and have a conversation?

[46:06] Shelley Ware: Fastest way to do it is send me an email and it's Shelly Wear at Pursuit to Profits.com. And I know we'll have the spelling of my name so that we get that right.

[46:20] Richard C. Howard: I'll put it on the Show Notes.

[46:22] Shelley Ware: Shoot me an email, the phone's always on and I get them immediately. So absolutely call. Or you could even call me.

[46:32] Richard C. Howard: No, that is great very much. I want to thank you for coming on the podcast today. I'm going to put your contact information in the Show Notes as well so anyone can come on and contact you. Do you have any parting thoughts before we end the podcast?

[46:49] Shelley Ware: There is a ton of money to be made in this arena. There truly, truly is. And it doesn't have to be as scary or as hard as a lot of companies make it. It can be much simpler and take advantage of people like us who have been there. I mean, we've got the scars to prove it, but it's exciting, it's interesting. You'll meet amazing people and it's all about the relationships. It's all about the relationships and how can you best serve them so that they can best serve you in return.

[47:36] Richard C. Howard: Well said, Shelley. Again, thank you so much for coming on. I couldn't have summed it up better myself. Again, Shelley's information is going to be in the Show Notes. Everyone please reach out to her as well. Thanks for listening and if you did enjoy the episode, please subscribe to the podcast and leave a review. It's very much appreciated. If you're interested in selling products and services to the Department of Defense, I have something for you that you're not going to find anywhere else in the world. The team and I created a program that takes everything you need to win defense contracts and put it into one place. Up until now, only large defense companies and a small amount of people in the know have had access to how products and services are really sold to the Department of Defense. I've taken all of that information and put it in a step-by-step training module that shows you how to consistently sell to the US. Military. In our membership, not only do you get the model, but you get weekly sessions with former DOD acquisitions officers for training guidance to answer your questions, and a community of like-minded business owners that want to partner on different opportunities to bid for subcontracting and teaming, or just to discuss general strategy on how to sell to the DOD. You have access to every course I've created, every coaching session I've ever recorded in every interview with an acquisitions professional that I've ever conducted, and we cover topics that range from defense sales planning and competitor analysis to SBIR and STTR foreign military sales. The list goes on. Go to Dodcontract.com if you are interested and I would love to see you in the membership.

If you enjoyed this episode, you can also check out The 10 Step Government Sales Process where I introduce a new program for a three month period to jump-start government sales.

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