Winning Work/Contracts As A Small Limited IT Company
Discussion
For the last 15 years I have been working as an IT consultant with my own limited company, primarily in GIS (http://en.wikipedia.org/wiki/Geographic_information_system). For 99% of this time it has been just myself working as a consultant through recruitment agencies with some small pieces of work direct to returning clients. Where necessary I have briefly employed people for work I cannot or do not have the time to do but this is rare.
I would now like to move to what I see is the next level which is winning direct contracts and potentially becoming a larger company, so my question is has anyone done this and if so how?
Problems I foresee are:
The area where I would most likely find contracts is local authorities and possibly central government. Under their procurement rules they will only give a contract to a company where it is less than xx% (e.g. 20%) of turnover. This limits contracts to the 30k - 40k mark where it is likely they will use an existing provider as opposed to go out to tender.
Contracts are difficult to find. There are none on Gov.uk contracts finder and even looking on People Per Hour the last work was over a year ago. It is not the sort of service that many businesses require so contacting local businesses as you may do with IT support is a non-starter.
Approaching direct has not been successful. I have previously tried direct contact by mail to all (approx. 150) English local authorities. This was an offer to carry out at zero cost a piece of work that was not being offered by any other supplier. Whilst not a mandatory requirement it would have been a very useful piece of work with an estimated cost/value to the authority of about 3k if they paid for it to be done. Number of replies, 0.
I am aware that a USP is normally mentioned when looking to market a company so I will work on this, but in terms of finding organisations to market to I am not even at that stage yet.
Any ideas and suggestions on how to go about the above gratefully received.
Thanks
I would now like to move to what I see is the next level which is winning direct contracts and potentially becoming a larger company, so my question is has anyone done this and if so how?
Problems I foresee are:
The area where I would most likely find contracts is local authorities and possibly central government. Under their procurement rules they will only give a contract to a company where it is less than xx% (e.g. 20%) of turnover. This limits contracts to the 30k - 40k mark where it is likely they will use an existing provider as opposed to go out to tender.
Contracts are difficult to find. There are none on Gov.uk contracts finder and even looking on People Per Hour the last work was over a year ago. It is not the sort of service that many businesses require so contacting local businesses as you may do with IT support is a non-starter.
Approaching direct has not been successful. I have previously tried direct contact by mail to all (approx. 150) English local authorities. This was an offer to carry out at zero cost a piece of work that was not being offered by any other supplier. Whilst not a mandatory requirement it would have been a very useful piece of work with an estimated cost/value to the authority of about 3k if they paid for it to be done. Number of replies, 0.
I am aware that a USP is normally mentioned when looking to market a company so I will work on this, but in terms of finding organisations to market to I am not even at that stage yet.
Any ideas and suggestions on how to go about the above gratefully received.
Thanks
We were in this situation 10 years ago, albeit there were 2 of us and our services (IT security & controls) are not government focused.
Our model was to get in on the ground somewhere as a contractor, get embedded on a project, do a great job and then (the hardest part) persuade the client to let us bring someone onto the team. That was not easy to start with but the harder we tried, the more successful we became.
To help manage our risk we used contractors and took the hit on profitability. The key factor for making this work was cash in bank to pay the contractors & strict payment terms with the client (i.e. they paid when they said they would). As we got a bit better known we took on perms and there are now approx 50 of us spread across the world.
The hardest bits for us were:
- Going from you to one more person. If you can do it with a "business partner" then all the better as it's someone to work with & share the burdens (and fun).
- Going from working in the business to working on the business. It'll probably be some time away but there will come a point where you'll have to reel back on what you are currently good at to focus on running the business. I recommend reading the first chapter in the book E-myth Revisited.
- Keeping oversight over multiple projects. It's at this point that lots of the previously daft things the large IT firms do will start to make sense.
Get a good accountant who is used to working with small businesses. Speak to their clients, preferably ones who are where you want to be in 3-5 years.
In terms of winning work, while navigating public sector procurement is difficult (PS only represents a small % of our client base so I'm no expert) if someone senior enough wants something to happen then it will do. You may have to sub through another company who is on the supplier list but that can be achieved by choosing any partners carefully and ensuring they see you as a solution to a problem (e.g. you have super-niche skills, can be a flexible resource, are cheaper/better) rather than direct competition. The key to this is just keep going at it. If you know there is a project going on then work your network hard to find someone in there. It doesn't have to be the head honcho (although that is best), you can work up the chain too.
If you can, cosy up to good/predominant vendors. When they make a sale they will be asked who can help implement. Do a good job, get cosy with them & that will improve your chances of being recommended. Customer Advocacy can help in this respect as success stories please clients and vendors alike. The vendors will be more likely to recommend people that deliver good outcomes and clients are happy to talk about them.
Another thing that you can do from day 1 that worked for us is speaking at conferences. Apply for and take any speaking slot (preferably one you don't have to pay for). People will put a face to a name & if you know your stuff then your (and that of your company) public profile will rise. In the eyes of clients you will become less of a "bet" because you have spoken at an industry event/been published.
Good luck!
Our model was to get in on the ground somewhere as a contractor, get embedded on a project, do a great job and then (the hardest part) persuade the client to let us bring someone onto the team. That was not easy to start with but the harder we tried, the more successful we became.
To help manage our risk we used contractors and took the hit on profitability. The key factor for making this work was cash in bank to pay the contractors & strict payment terms with the client (i.e. they paid when they said they would). As we got a bit better known we took on perms and there are now approx 50 of us spread across the world.
The hardest bits for us were:
- Going from you to one more person. If you can do it with a "business partner" then all the better as it's someone to work with & share the burdens (and fun).
- Going from working in the business to working on the business. It'll probably be some time away but there will come a point where you'll have to reel back on what you are currently good at to focus on running the business. I recommend reading the first chapter in the book E-myth Revisited.
- Keeping oversight over multiple projects. It's at this point that lots of the previously daft things the large IT firms do will start to make sense.
Get a good accountant who is used to working with small businesses. Speak to their clients, preferably ones who are where you want to be in 3-5 years.
In terms of winning work, while navigating public sector procurement is difficult (PS only represents a small % of our client base so I'm no expert) if someone senior enough wants something to happen then it will do. You may have to sub through another company who is on the supplier list but that can be achieved by choosing any partners carefully and ensuring they see you as a solution to a problem (e.g. you have super-niche skills, can be a flexible resource, are cheaper/better) rather than direct competition. The key to this is just keep going at it. If you know there is a project going on then work your network hard to find someone in there. It doesn't have to be the head honcho (although that is best), you can work up the chain too.
If you can, cosy up to good/predominant vendors. When they make a sale they will be asked who can help implement. Do a good job, get cosy with them & that will improve your chances of being recommended. Customer Advocacy can help in this respect as success stories please clients and vendors alike. The vendors will be more likely to recommend people that deliver good outcomes and clients are happy to talk about them.
Another thing that you can do from day 1 that worked for us is speaking at conferences. Apply for and take any speaking slot (preferably one you don't have to pay for). People will put a face to a name & if you know your stuff then your (and that of your company) public profile will rise. In the eyes of clients you will become less of a "bet" because you have spoken at an industry event/been published.
Good luck!
Edited by bga on Monday 16th March 17:02
Maybe expand your horizons? The wiki page you refer has the following as types of businesses that use GIS; Science, government, business, and industry, with applications including real estate, public health, crime mapping, national defence, sustainable development, natural resources, climatology, landscape architecture, archaeology, regional and community planning, transportation and logistics & location-based services. I'm sure you could add national utility companies to that list as well.
If your expertise is in government though how about expanding your targets to anywhere in the EU. Loads of info on these pages:
http://ec.europa.eu/unitedkingdom/work_with_eu/ten...
http://ted.europa.eu/TED/main/HomePage.do
If your expertise is in government though how about expanding your targets to anywhere in the EU. Loads of info on these pages:
http://ec.europa.eu/unitedkingdom/work_with_eu/ten...
http://ted.europa.eu/TED/main/HomePage.do
Firstly many thanks to everyone for putting your time in to post, especially bga for your very extensive reply. I will work through the suggestions today and update the thread with progress as this may help others. In relation to direct points/questions:
bga said:
Another thing that you can do from day 1 that worked for us is speaking at conferences. Apply for and take any speaking slot (preferably one you don't have to pay for). People will put a face to a name & if you know your stuff then your (and that of your company) public profile will rise. In the eyes of clients you will become less of a "bet" because you have spoken at an industry event/been published.
Excellent idea, I have an event on Monday where I am doing something similar so will look for more of these in the future. There are also vendor/industry awards which I am trying to push my clients towards which will raise their/my profile.Zulu 10 said:
It may be of no relevance to you, but as a means of accessing government contracts have you looked at G-Cloud?
Good point, my current client is looking at using G-Cloud but I had not thought to look at making my services available through it.951TSE said:
Maybe expand your horizons? The wiki page you refer has the following as types of businesses that use GIS; Science, government, business, and industry, with applications including real estate, public health, crime mapping, national defence, sustainable development, natural resources, climatology, landscape architecture, archaeology, regional and community planning, transportation and logistics & location-based services. I'm sure you could add national utility companies to that list as well.
Thanks, my work background is oil/gas, mining, transport (road/rail), central/local government, utilities, emergency services, agriculture, and engineering projects. The issue with private industry tends to be that they already have the people/services in place and if they require greater capacity they will recruit more staff to manage the workload as opposed to bring in a third party. Saying this a friend works at a small(ish) engineering company who may have some work so I will try and find a register/directory of these and approach them about potential work. Thanks also for the links, I will have a look through these. beeej said:
Can you expand on the GIS bit? What vendors/platforms/technologies? Hopefully not ESRI, yawn 
Primarily ESRI and MapInfo, also some Intergraph and Cadcorp, usually Windows based. Ultimately it is which vendor the client uses, I have used open source (Jump, QGIS) for a few of my own projects but most companies are reluctant to have any reliance on open source software. I started off digitising and have worked through analysis, development, technical/project documentation, and now do some project management so the industry/skills experience is there it is just finding the clients. Gassing Station | Business | Top of Page | What's New | My Stuff