There’s No Free Lunch
A Presentation of Small Business Best Practices Donna Coleman
Small Business Advocate SAIC, Inc.
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Outline
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Why are we here?
– Learn about Small Business Opportunities – Learn about the SBIR/STTR Programs – Support AAUMRI
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Alternate Business Model
– There’s another model for working with Small Business
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Issues
– – – – – – Value proposition for Small Business Supplier diversity versus Small Business Development Regulatory/mandatory versus Good Business Sense Discipline and Process in our Small Business Programs Technology Transfer Margin pressures
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Conclusion
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Why We’re Here…
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Review SBIR/STTR Opportunities Hear AAMURI’s ability to support these opportunities. Small Businesses are Hungry Large Businesses Care Why Me?
– – – – SAIC Cares We have a long history in working with AAMURI We have an Idea -- That’s Working! Share our Idea with you…
Most people will forget this presentation – a few won’t – and those few will succeed.
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Two Models … Only One Makes Sense
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SB
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SBA Model
Incentivizes subcontracting Does not promote SB leadership
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SAIC Value Model
Incentivizes SB growth and SB contract leadership
Issues 1
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Value proposition for Small Business Relationships with Large Business
– – “What’s in it for me?” – everyone asks this. For Small Business
• • • • Long term collaborative strategic growth New technologies Increased revenue, pipeline of opportunities, contract vehicles Position small company for acquisition.
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For Large Business
• • • • Close relationship with business to chase small business set asides Derivative pull through business Niche business area partner Potential acquisition candidate
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Supplier diversity versus Small business development
– – – SAIC is not a manufacturing firm. Not focused on supplier diversity SAIC is services firm, seeking people who can make us strong We host Small Business and M/P programs in Business Development
• Focus is to GROW BUSINESS, not make SBA rankings and percentages
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June 30th SBA Re-Certification Regulation
– Novate ,Too Small/Too Big, Exit Strategy
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Issues 2
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Regulatory/mandatory versus Good business sense
– Don’t focus on compliance. Business and profitability are all that counts. – Flawless execution. – Don’t just answer the mail on a proposal.
IF
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Backstop model
– – – – – – Seek credible small businesses who can prime Small Business Set Aside Put financial controls in place to ensure a reputable prime Develop close relationship, bid together SAIC provides niche support where they are not skilled to bid Ask small business “What do you need to win?” Tell them “We’ll do it.” Don’t get credit with SBA with this approach, but you grow business and win on SBSA
A “servant leader” mentality grows business and makes money. It’s counter intuitive but it’s true.
THEN
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Issues 3
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Discipline and process (SAIC Best Practice)
– Rule #1 – Know the company
• CHEMISTRY! If the foundation of the business relationship is wrong, you’re relying on dumb luck to succeed. • Ensure prior business with the company. Know the General Manager.
– Rule #2 – SB is in niche business to extend skills, customer diversity
• Precludes stepping on SB’s business if they are niche, not our business line
– Rule #3 – Set standards (SAIC rule, not in DoD or NASA requirements)
• At least: $6M revenue, 60 people, in business 6 years • Why? Aggressive proposal activity is a major financial drain on the small business. This ensures critical mass to enable the company to do their part in the mentoring process.
– Rule #4 – “The 13 questions” and our expectation management
• SAIC rule to bring on a SB. Not required by DoD or others. • SB expects to be mentored and grown. We work this mutual agreement hard. Ensures each side understands what they are signing up to.
– Rule #5 – Formal Program Manager assigned to each SB – Rule #6 – Regular meetings with SAIC leadership
• Opportunity to share their expectations not met, critique the Program Manager
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Issues 4
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Technology Transfer
– Core of each SB program – Skill or tool can we transfer that makes them attractive to customer base. – This costs money. To buy the tool, train it. To train and transfer processes.
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Margin pressures
– This Backstop program consumes resources.
• Develop corporate infrastructure, establish and refine tools, infrastructure assessment, HR assessment, accounting programs, organizational structure, competitive assessments, pipeline development, related training. • Program manager, technology transfer, tool purchases, training programs
– Lack of resources on low overhead contracts severely limits capital to fund work with the SB. Limited or no resources with pressures on lower rates. Overhead use lowers “time sold” – Solution to ensure a successful program is to fund it at the customer level.
• Translates to “time sold” programs with no fee
– Lack of funding limits the value proposition. Limited out of pocket funds. – Where we’ve been funded, we accomplished 2x or more with a Strong SB or Protégé
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Conclusion
• Expectation management is the first key to success.
– My 5K Analogy
• Train – 9 weeks from Couch Potato to 5K • Chart the course
– Then run the real course!
• Re-Set Expectations and Train Some More… • Run to Success!
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Conclusion
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Outcome of Relationship depends on flawless execution
– – – – Focus on business development versus supplier diversity Discipline and process Technology transfer Small business backstop model
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The goal of a successful Relationshp must be to grow business for the Small Business and the Large Business. Outcome of a program is a direct function of what you put into it.
– If you resource a program, it will produce more value than if done “out of hide.”
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Small business is good business… for all of us!
– A “servant leader” mentality grows business and makes money. It’s counter intuitive but it’s true.
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