Road to Impact: A Small Business Journey with USAID

Today USAID hosts its annual Small Business Conference at the Ronald Reagan Building in Washington. Below are some tips for growing your small business with USAID from Social Impact, recipient of the 2012 USAID Small Business of Year Award.

This week Social Impact (SI) is proud to receive USAID’s inaugural Small Business of the Year Award, based on our growth and service to support USAID in Washington and overseas to accomplish its international development priorities.

It seems like just the other day that SI started as two-person company in 1996 with our same mission and vision—to make international development more effective in improving people’s lives. As the two founders, Pat Hanscom and I started SI with a small virtual team of like-minded individuals—people who cared about development and thought that they could help big international agencies, like USAID and the World Bank, to become more results-oriented and people-centered in their approaches to working with  developing countries. These are really the very same principles central to USAID Forward and USAID’s strategic plan. Yes, earlier versions of this thinking go way back in USAID and the international development community and when we created Social Impact we successfully spotted these needs and saw them as growth areas.

Small business owner Arnoise Clerveaux (in back) sits in her shop in Cap-Haitien, Haiti, on March 24, 2011. Photo credit: Kendra Helmer/USAID

When SI started out there were few opportunities for small businesses to get into the game. We had luck marketing SI and developing smaller contracts directly with USAID missions where we knew people and where we correctly identified opportunities to market SI’s services in project design, strategic planning, organizational capacity building, gender integration, monitoring and evaluation and participatory development. During these earlier years “relational” marketing produced a good result for us though it involved lots of meetings and hoof work. Through some of our earlier work we helped USAID create some of its good practices in participatory approaches to project design and strategy development in the field.

By the late 1990s things really got tough as USAID began to bundle all most all of its work into large Indefinite Quantity Contracts (or “IQCs”). These IQCs were hard barriers for micro and small business to break through and most of the work was reserved for USAID’s big business partners–“the usual suspects.” SI and many other small business saw token participation in USAID projects as small business subcontractors (or “subs”) but few opportunities to gain meaningful work as prime contractors, even with our demonstrated and growing capabilities.

After diverse efforts to work with development banks, UN agencies and other donors, we managed to win our first USAID IQC in 2003 with USAID’s Office of Transition Initiatives. We got to know them and they to know us through some conferences and strategy sessions that we facilitated as a sub. Our work with OTI in fragile states put us on the map with USAID and give us some additional “street cred”, especially with USAID’s emerging focus on fragile states.

About this time we grew bolder and started to advocate with our colleagues at OSDBU for more small business opportunities. When new RFP’s came out that had no opportunities for small business we’d say, “Hey, we’re here and we have capabilities to do this!” “Why doesn’t USAID follow through on its Congressional requirements to do more with small business?” In some cases we even wrote to the House Small Business Committee and said “USAID needs to be more accountable in meeting it small business goals”. Bottom line is that our advocacy—and that of other small businesses- helped to call more attention to our capabilities and those of the small business community to support USAID. USAID’s Office of Small and Disadvantaged Business Utilization (OSDBU) became our trusted ally and advocate during this time.

Things really started really started to change dramatically with the new OSDBU team led by Mauricio Vera, Director and Kimberly Ball, Deputy Director. They had a clear mandate, a strong sense of purpose, a great sense of agency politics and contracting procedures, and top-level support from the Administrator to create additional opportunities for small business at USAID. Through their peaceful and persistent persuasion, Contracts Review Boards were set up, Bureaus and Contracting Officers became more accountable for creating small business opportunities and the pressure was truly on to change things for the better.

Now USAID has an “A-” on the SBA Scorecard and most of the new generation of IQCs contain solid set-aside provisions for small business. And we’re even beginning to see some USAID missions create small business opportunities (in large part due to OSDBU’s “road shows” in the field). What was once a barren landscape for small businesses now looks pretty fertile.  I can’t imagine a better time for small businesses to get started with USAID.

Based on our experiences here are some tips for growing your small business with USAID:

1. Know your core capabilities and advocate for them through OSDBU. Get to know your OSDBU colleagues and keep them informed about your capabilities and growing successes with USAID.
2. Get to know USAID as your customer including its current priorities, strategy documents and quality standards in the areas of your work.
3. Focus on the quality of your work. USAID’s rating of the quality of your work in Customer Performance Reports or “CPRs” is critical to your landing new business.
4. Find a capable medium or large sized business or two who will subcontract with you so you can get into the game and establish your credentials with USAID. Look for business who are willing to give you a well-defined piece of the action rather than just “blowing kisses” in your direction.
5. As resources permit, grow your management team to include people who have successful experience working with (or in) USAID in your areas of expertise. This will give you tremendous insight on how to win work and how to perform at the high level of quality that USAID expects.
6. Don’t grow too quickly. Growing purposefully–while not overextending your capabilities–will  allow you to build your experience  while minimizing the risks for your company and for USAID.
7. Enjoy and appreciate the value of your work! When you step back from this all, there are few industries that enable you to produce a double or triple bottom line of a financially viable company while contributing to global social wellbeing and a more sustainable environment!