The question we are tackling today, and the one I get most often, is “What is Public Sector and why is it such an important vertical market?”
Oxford dictionary defines public sector as “the part of the economy that is controlled by the government.”
Public sector is controlled by the government and funded by government controlled funds, ultimately tax payer dollars. When I use the words ‘public sector’ I do mean ALL OF THAT as well as other entities that have access to supply contracts that are not specifically funded by public money, such as non-profits, and private schools as examples. Big round up statement: Not all public sector, per my definition, is government and not all buy solely off a negotiated contract.
How do we decide which end users are Public Sector? On the SLED (state, local, education) side I let the contracts determine the agencies. If the agency qualifies for a state, local, education, or cooperative contract then they are part of the public sector pool. On the federal side it is a little easier: anyone who is funded by the federal government or purchases on behalf of the federal government (think GCs, Kiewit, Whiting-Turner, etc) or is a Prime contractor to the federal government (think Boeing, Lockheed, etc), would all qualify as public sector.
As you are hopefully aware, a lot of information about the public sector is accessible if you know where to find it. It can take some digging but you can see who purchases what, what contracts end users purchase from, and when those contracts are up for rebid etc. This is important to help us determine just how big the potential is for furniture and the percentage of our total industry that public sector represents.
Paul Holland, Managing Principal at Solomon Coyle, suggests based on their research that the commercial furniture industry is about a $14B market annually. Based on the figures we have been able to find through our data dives, our research on the furniture spend in public sector equates to $5B annually. That is about 35% of the total furniture spend per year.
This is why the public sector is such an important vertical market and why you should have a strategy to grow your brand and sales in these markets.
As I typed the above I heard all your voices in my head with all of the reasons you are not in this vertical:
We do not have someone who specializes in this market so we cannot go after it
There is no federal in my market I am not in DC, San Diego etc
We do not hold a contract so we are locked out of this market
It’s too complex and we do not understand it
The government doesn’t buy our products
We do not have the bandwidth to focus on anything else
While on the surface these all sound like legitimate reasons, but I could successfully argue all of them with you. Since I am writing, and you are reading I guess it is not a fair argument so let me just counter each of the above excuses:
We do not have someone who specializes in this market so we cannot go after it. Response: You do not need a full-time person to focus on this market immediately. Start small and FOCUSED. This is 35% of our industry and growing, can you afford not to pursue it?
There is no federal in my market. I am not in DC, San Diego etc.Response: There are over 2M civilian workers (not including Department of Defense, DOD) The least number of civilian workers, approximately 3300, are in my home state of Delaware. There are many more civilian workers in need of service!
We do not hold a contract so we are locked out of this market. Response: Yes, it is always really nice to be the contract holder, but there are ways to partner until you can get your own contract. Reach out to me and I can explain!
It’s too complex and we do not understand it. Response: It is complex in some ways, but it is really just different than private sector/commercial. There are resources available from GSA and from Cooperatives as well as outside sources that can help you ramp up fast. I had to do it myself 8 years ago and it took digging, but you are able to do it. Think of it as learning another language. It’s tough at first. But then, it starts to click and gets easier!
The federal government doesn’t buy our products. Response: I cannot say this is not true without knowing your products, but it would be VERY odd that you sell nothing that they purchase. They have offices, breakrooms, dorms, housing, outdoor areas, etc. There is abundant opportunity for EVERYONE here.
We do not have the bandwidth to focus on anything else. Response: I understand that your bandwidth might be tight, but this represents 35% of our industry and is GROWING. In my opinion a public sector strategy should be a priority for everyone.
The Public Sector vertical can be used as the foundation of your business, or it can be an additional revenue stream to help take you to the next level. A strong, intelligent game plan that plays to your company’s individual strengths can help any size company compete with the giants when it comes to Public Sector. It supports local and small businesses by offering set aside contracts and grants. It remains consistent vs the highs and lows of commercial business. Public Sector provides a level of visibility that you just won’t find commercially, you know who your target clients are and their budgets. Put plainly, if you have looked at Public Sector and said “not for us” or “we aren’t ready”, look again. And this time, I feel confident with more knowledge in your back pocket, you will see the possibilities.
ABOUT MICHELLE WARREN
Founder, President - Catalyst Consulting Group
Michelle Warren is President of Catalyst Consulting Group, a firm specializing in providing strategic solutions to the commercial furniture industry to enhance their sales, positioning, and distribution. With 25 years of industry experience on the dealer and manufacturer side of the industry, Michelle has been recognized as an innovator in selling to the Federal Government, State/ Local Government, Higher Education and Cooperative Purchasing. Her expertise includes: sales strategies, strategic planning, 3-5 year road mapping, targeted marketing plans, distribution development, hiring reps, and training for reps and/or dealers. Michelle is known as a “serial networker” in the furniture industry and enjoys meeting people and making connections happen.
If you’re interested in connecting - reach out at: [email protected], connect on LinkedIn or visit www.strategic-catalyst.com to learn more about her work.
As seen in Delve | March 2024 V.47