During the dot.com boom, venture capitalists turned up their noses at companies doing federal business. A true sign of the changing times is that the venture capitalists and companies with whom they do business are now focusing on Washington, DC and federal business in an effort to pick "the low-hanging fruit." Unfortunately, most companies looking for federal business to solve their revenue problems are finding that the fruit is at the top of the tree. As we have mentioned previously, it takes a major investment in time and money to penetrate the market and many are not willing to make the investment. Those willing to make the investment are finding that it is quite worthwhile.

An excellent article on this subject, entitled "Federal Work Pays Off for Woodbourne" by Anitha Reddy, was published on March 25, 2004 in The Washington Post. The article may be found at the following link: http://www.washingtonpost.com/wp-dyn/articles/A22518-2004Mar24.html.

The article states, in part, as follows:

"It takes a long time to be successful in this market," said Anton Reut, a vice president at CMA Inc., a Vienna firm that counsels companies that want to do more work for the federal government. Companies investigating government contracts for the first time should expect to spend a year to 18 months researching, networking and bidding on contracts before winning their first contract, he said.

But the hurdles aren't keeping companies away. The General Services Administration predicts a 20 percent increase this year in the number of companies added to its "schedule," a list of approved contractors. To qualify for the GSA schedule, companies have to negotiate hourly rates for their services with the GSA and prove they meet regulations regarding accounting methods and employee benefits. The process can be arduous, but companies on the list stand a greater chance of winning government work since agencies can select them through simplified bidding contests. Also, one of the most difficult issues, price, has already been resolved.

The federal market is not for the faint hearted or for those companies looking for quick revenue. The market doesn't really differ from the commercial market when it comes to closing a sale. You must establish a relationship with the customer and gain their confidence before they will buy from you. The trick to making federal sales is to locate the federal buyers. One sales executive in Washington likes to call it "feet on the street." You won't crack the market if you are not willing to spend money for feet on the street and then give them a year or more to close deals.