A GovCon guide to improving your financial performance and profitability in 2023
Learn how to improve your financial performance and profitability as a government contractor in 2023. This guide provides strategies for identifying market trends, cutting costs and increasing revenue through effective efforts.
by guest author Susana Vallelonga, BOOST
A new year is under way and you have probably heard the expression “new year, new you” countless times. It can be overused, but this year, there is some truth to it. As the world continues to recover from the economic turmoil caused by the COVID-19 pandemic, government contractors are facing new challenges and opportunities in the year 2023. To improve financial performance and profitability, there are several key areas that contractors need to focus on.
First and foremost, the world is not the same as it was pre-pandemic, and neither is the government contracting industry. You need to understand the current market conditions and evolving economic trends that are likely to impact your small business in new ways. This doesn't mean simply monitoring the stock market; it means researching current events that will have a direct impact on your company, such as:
How global supply chain issues will continue to affect GovCons
How inflation fluctuations will have a direct impact on your business as you develop and adapt to innovative pricing strategies — critical to staying competitive
How protecting your network from cyber-attacks, training your employees on data security and realizing that cyber insurance is as important as E&O
In addition to understanding the market conditions, contractors also need to have a strong focus on cost management as it requires diligence and oversight. This means identifying and eliminating any inefficiencies in your operations, as well as finding ways to reduce costs through the use of technology and automation. No, this doesn't mean just firing all your employees and replacing them with robots (although it might be tempting). But strategic use of artificial intelligence (AI) for routine tasks could save both processing time and money.
Another important area for contractors to focus on is improving their sales and marketing. It’s not as fun as building cool technology, but necessary for growth. This year, get out of your comfort zone:
Work on developing a strong online presence so new people can find you
Build relationships with key customers and partners so people remember you and what you can do
Leverage data and analytics to better understand and target the right audience to make sure you are focusing efforts smartly, efficiently, and capitalizing on your capabilities
Another key aspect to focus on is on contract management. This includes ensuring compliance with all laws and regulations impacting your industry, managing the contract lifecycle, identifying and mitigating risks, and monitoring compliance closely. This doesn't mean just signing on the dotted line for new work and hoping for the best. It’s having the right people and systems in place to help ensure you know the “what/when/how” of delivery and who can manage all the “strings” like a conductor.
Finally, to ensure profitability in 2023, you must promote innovation and growth. This includes exploring new markets and business models, leveraging emerging technologies to create new products and services, streamlining processes, and investing in your biggest asset – your people. No, this doesn’t just mean copying what your competitors are doing, it requires you to outdo them by being open to change, thinking differently, and taking small risks to implement something unique that could potentially have long-term rewards.
Overall, government contractors that focus on these key areas in 2023 will be well-positioned for success and profitability in the years to come. Improving financial performance and profitability requires a combination of strategic planning, cost management, and effective sales and marketing efforts. By setting clear financial goals, tracking progress, and making data-driven decisions, businesses can identify areas where they can cut costs and increase revenue. This can include streamlining operations, negotiating better deals with suppliers, and focusing on high-margin products or services. Additionally, businesses can improve profitability by finding new and innovative ways to reach and engage with customers, such as through digital marketing or referral programs. By taking a holistic approach to financial management and continuously looking for ways to improve performance, businesses can achieve long-term success and growth.
BOOST provides enterprise level services for Government Contractors. We offer scalable solutions and advisory services in Accounting & Finance, Contract Management, Human Resources, M&A Support, and Talent Acquisition. BOOST was founded to support GovCons as they grow to the next level by providing operational support and candid business advice. Our team has experience working with GovCons and know the requirements, compliance, and nuances of working in the industry. Our services provide a pathway for GovCons to operate effectively, reduce risks, and increase long-term gains.