Contracting Tips… especially for very small businesses

Gene Stout – Gene Stout and Associates

Most importantly…. you are not selling a product. You are selling yourself.

My sole proprietorship is simple, makes taxes a piece of cake, and has served me well, but it has personal risks if you think somebody is going to sue you.

Don’t buy services that other companies offer in their unwanted emails. They can’t find business for you, and the bureaucratic services they offer are almost always things you can do yourself.

Get liability insurance required by the bigger companies and Defense. Mine cost $500 per year.

If you have good employees, make sure they don’t leave you for better working conditions. Jeff, Jeff, and I had good times together, and their salaries/benefits packages were very competitive.

Don’t ever forget the real customer. You may be working for another company, organization, or governmental contracting agency (like the Army Corps). They are not the customer. The customer is always a person, in my case a natural, cultural, or NEPA professional at an installation. That’s who you have to satisfy. The others are often just a required bureaucratic hassle.

Help your customers with their scopes of work. You’re the expert on them for your products. A tried and true scope will greatly reduce misunderstandings on what’s required of you and them. If you know somebody’s considering a project, send them a sample scope of work.

Make sure the SOW does not hold you to delays in reviews by persons not in your employ. Don’t EVER believe a customer’s statement that the reviews will happen expediently. THEY WON’T!!!

Try to get the customer to use value-based contracting. It includes pricing and experience… a great benefit to you and the customer. There is not a single company in the world that can beat me for a contract for my specialty products on a value-based basis.

Make the price right. If you occasionally screw up and underbid a job, all it takes is setting the alarm clock a little earlier to make it right in most cases.

Don’t take all of the customer’s money. You should know about how much is available. Keep your bid under that amount. Give the customer some money to spend on something else.

If you are pressed for time and the customer can’t wait, don’t take the project. On-time delivery is a great reputation.

Installation people you are working with may try to drag you into their job-related personal issues. Try to be sympathetic. However, virtually never should you try to fix things like that. Risky, and not your job.

Don’t buy fancy shit. It’s your profit you are spending. Get things you need to be efficient, not fancy. Stay in decent, not great, hotels and eat good food. Become an expert on cheap flights and cars. Use the money you save for fun stuff.

Tax write-offs for food and entertainment are a joke. If I spend $100 for a night out with a client (legally, of course), I save $15 on taxes.

There are easy to work with customers and hard to work with customers. One makes you slightly more money. The other also makes you money. Have good times with the former. Bear with the latter.

In general, the fewer people who you have to deal with to accomplish the task, the easier the job.

Good customers know what they want and give you solid reviews and answers. Tough customers are wishy-washy and don’t really care about the project.

If you disagree with your customer on an item in a management plan, present your case. If things don’t go your way…. surrender. The customer has to live with the plan, not you.

The amount of money has little to do with the profit/hour. There is often more profit/hour on an ammo depot project for $25,000 than a major combat facility for $150,000. HOWEVER, the big one makes you feel better and offers better job security.

Big companies play the impersonal game for big contracts. You can’t compete in that game. But, they should not be able compete with you on a personal contacts basis. Be a person, not a company.

A good thing compared to installation resources management…. You don’t lose sleep over taking care of land and its resources.

A bad thing compared to installation resources management…. You don’t lose sleep over taking care of land and its resources.

It’s not the amount of the contract that determines financial success. It’s the amount you keep.

If you need help with stuff like this, give me a call…. (970) 218-6888. I’ll help if I can.

Integrated Natural and Cultural Resources Management Plan/Environmental Assessment