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5 Tips to Generate a Six-Figure Income with Discretionary Spending





Jean Kristensen - Discretionary Spending - 5 Tips to Generate a Six-Figure Income with Discretionary SpendingAs a small business owner or “solopreneur,” a lot of effort is required to balance the books—and a lot of strategy is needed to generate a six-figure income. One such strategy is to work with government agencies with discretionary purchasing authority.

 

What is a discretionary purchase?

A discretionary purchase is a type of purchasing that enables government agencies to purchase goods and services through a simplified acquisition process. Many government agencies are using discretionary purchases—i.e. discretionary spending—as a way to increase opportunities for small, minority, and women-owned businesses.

The process tends to be easier for both sides because neither party has to go through an extensive procurement process. Opportunities tend to range from 1-$200,000; and it’s a great way for MWBEs to build capacity.

Here are five tips to help you build a six-figure business with discretionary purchases:

 

#1) Knowledge is Power

Take the time to familiarize yourself with the procurement process. Think about the following: when do agencies buy; how do they buy; and what products are services are most likely to procured with discretionary spending?

Let’s look at this using the federal government as an example. On September 30, the government will end its fiscal year, and at that time, they’re likely going to be looking to spend any leftover funds in their budget—enter discretionary spending. You can learn more here about this process in our upcoming webinar.

 

#2) Certification Makes You Stand Out

Often times, buyers with discretionary purchasing authority are looking to spend these funds with small, minority and woman-owned businesses. These buyers may also be looking to help their agencies meet specific MWBE goals. Certification is an important differentiator in this market place. If you’re eligible for MWBE certification and haven’t proceeded yet, you are leaving money on the table. Once you are certified as an MWBE, make sure your marketing material clearly states that you’re a certified business.

 

#3) Registration on Agency Websites and Vendor Lists

In most cases, when the government is looking to outsource work or opportunities through discretionary purchasing, they’re going to first check their vendor list. Using New York City as an example, buyers look at the MWBE Directory and the City’s Vendor list known as the Payee Information Portal (PIP) to identify vendors.

Other agencies publish their discretionary purchases on the website. All that to say that you want to make sure you are registered on the appropriate bidder’s list and that your company is a recognizable vendor with the agencies you plan to target.

 

#4) Strong Online Presence Counts

Making sure you are as present as possible online means that your contact information is correct and easy to find. More than that, though, we suggest that you check all your online profiles multiple times a year to make sure everything is up to date. Make sure your profiles contain relevant information that your buyers care about—commodity codes, your certifications, how to buy from your company, etc.

 

#5) Market to Your Audience

If you’re trying to reach the government, make that clear in your marketing. Find a way to maintain a strategic communication with your target audience—include direct mail, email, networking, procurement fair attendance, and other functions.

Building your business through discretionary purchasing can be effective and a great way to leverage your MWBE certification. For more information about how we handle discretionary purchasing and how we’re helping our clients do so, click here to register for our next webinar on September 14, 2017.

Do you like these quick tips? Sign up for our #MWBEsuccess newsletter here for free small business guides to grow your business!

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