The federal government spends over 500-Billion-dollars each year on grants for state and local government. That's a lot of money! And, grant awardees will buy a lot from vendors to spend the money. To say government sales is often driven by grant dollars is an understatement.
In this episode of Myths of Selling to Government, host Rick Wimberly talks about making a nice living selling products and services to government agencies that used grant funds to buy. He shares a strategy for getting proactive in early stages to provide an advantage over others who are chasing the same grant dollars.
I heard from one of my Linkedin contacts the other day. He said he’s getting benefit from our posts, our blog and our podcast. And, he wanted to know if we had experience with using grants to build business with local, state and federal entities. Yes, was the answer, very much so with local government…not much with state and federal. Check that…not much with state and federal government winning grants…but a lot with state and federal awarding grants to local government.
Following me here? In fact, as I think back, for more than a decade, a good bit of my gov selling success came through products and services that were financed by grants to local governments.
Here’s how it typically worked: The federal government and Congress found a problem they wanted state and local governments to solve. However, the feds can only go so far telling states and locals what to do. There are fundamental tenets, laws, court rulings and constitutional issues that limit federal authority over state and local governments.
But, when the federal government, and the politicians who allocate the funds, want something to happen, even when they don’t really have authority to make it happen, they have a convincing way to get their way…money, and lots of it. In fact, they can print the stuff.
The feds generally don’t want to…or can’t…make the decisions about who gets the money and how much. So, they say to the states, hear ye, hear ye, we’ve got this big pot of money that we want to spend on this particular purpose to solve this particular problem. We’d like for you to help us distribute it. We’ll call you our Administrative Agent, and your Governor gets to pick the Agent for your state. But, you’ll need to follow our rules for how the money is spent. You can tack on some rules for yourself. Oh, and you can keep some of the money for yourself. (That’s the state, not the Governor.)
Then the states say to the locals, hear ye, hear ye, we’ve got a pot of money that you can spend on a particular purpose…but, you’re going to have to convince us that you’re deserving, and will do what we…and the feds…want you to do with the money. Later, you’ll need to prove to us that you’ve spent the money as promised, and that good things have happened because of it.
Wa la, you have a grant program.
This may be a simplistic explanation and there are many variations…but, for our purposes today…this is how the money flows. And, note that we’re only talking about government grants. There may be private grant sources; I haven’t had much luck with them myself in the government space.
What does this all mean to you? Your opportunity comes when your product or service can help achieve what the feds, thus the states, thus the locals want.
How do you get at this money? Well, it won’t go directly to you. You cannot apply for the grants. The money will go to the local agencies…and if you do it right, they can spend that grant money with you.
Your first step is to identify grants that may benefit from your stuff. The government, and private vendors, are pretty good about publishing grant databases. Some keyword searches may do the trick. Maybe, you can find out about the grant before the grant is published. There will be a paper trail as the problem is discussed by the feds, and the money is approved by Congress.
When you find a grant that you may be suited to serve, go through the documentation with a fine toothed comb. Cross walk your value proposition with the grant’s needs. Don’t try to force fit it.
With that basic understanding accomplished, find out everything you can about the grant. Find out who your Governor appointed as the Administrative Agent. It’s probably a state agency. They’ll likely be glad to talk with you. Talk with your contacts who have experience with it. Get your hands on successful applications, even from past years. They’re public record and most grant winners will be glad to share.
With information and insight in hand, create a Grant Kit. Include in it language that makes solid connections between your product or service to the problems the grantors want solved.
Work toward getting some of the elements of your kit…language, graphics, etc…in a prospect’s grant application. Of course, you can only do this when the local agency trusts you, wants your solution and your help. (Listen to the rest of the podcast episodes to get guidance on how to do that.)
Keep the Grant Kit alive. You’ll continually get ideas, perhaps from prospects and customers, about ways to make your Kit better. Ask them for a copy of their applications. They’ll be glad to share. They’re public record anyway. Ask them if they mind if excerpts of their application are included in the Grant Kit. They’ll probably be flattered.
Make existence of the Grant Kit well-known among your clients and prospects. Build outreach campaigns around it, but don’t send the Grant Kit out willy-nilly. Make sure you know where it’s going, and that you engage with folks who want it. If they’ve asked for it, they’re probably real prospects.
If you’ve done your work right, they will use excerpts from your Grant Kit in their application.
That doesn’t mean that they WILL buy from you. They will still need to go through their own processes. Yes, that could mean an RFP. Your competition could sneak in…in fact, you can probably count on it.
You be the one with the best solution to address the problem at hand. You be the one who has the best relationship with the grant awardee, now with a pot of money to spend. You be the one who knows what’s going on at all turns.
Sound fast and simple? Of course, not…but I will say that I’ve paid for lots of nice things for my large family, and now their families, with money I earned selling good solutions paid for with grant money.
If you’d like to chat about it, reach out to me and we’ll schedule a Zoom. I might even tell you how I created a grant program that generated lots of qualified leads. Thanks for listening. Stay in touch.