Oct. 6, 2020

Ep 23: Unexpected Revenue Sources for Business Growth

Ep 23: Unexpected Revenue Sources for Business Growth

Finding funding sources to help your potential clients is a fabulous - if unexpected path - to business growth. Amanda Wood of Becker is far more than a typical lobbyist – and trust me, even (maybe especially) if your company isn’t B2G, you are going to want to hear what she has to say about government funding as a potential revenue source for growing your business.

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To learn more about Amanda Wood and Becker, go to https://beckerlawyers.com/professionals/amanda-l-wood/

Looking for more episodes or playlists? Find them on our Right In the Middle Market website, https://www.rightinthemiddlemarket.com. For more information about us, or to inquire whether we could help you and your business, go to the website SLS Capital Advisors and The Gaffin Group, https://slscapitaladvisors.com.


Transcript

Stephanie Chambliss Gaffin:

Have you ever heard about companies building their business using federal funding and wondered how does that happen? You might not expect to find a lobbyist as a guest on an entrepreneurial focused podcast. But Amanda Wood of Becker, is far more than a typical lobbyist. And trust me, even maybe, especially if your company isn't B2G, you are going to want to hear what she has to say about government funding as a potential revenue source for growing your business. Welcome to Right in the Middle Market, a podcast about pragmatic perspectives on running, growing and selling your business. We talk about the challenges decisions, and most importantly, the actions business owners can take to create long term value in their companies. Welcome to Right in the Middle Market, I'm Stephanie Chambliss Gaffin. And today, I am so excited to be here with our guest, Amanda Wood. Amanda is a senior government relations consultant with Becker. And she is one of those people who has a job that I never knew how critical it was- I didn't even know that there were people who did this kind of work until I met Amanda. And the more that I have gotten to know her, I have come to find what she does is such an interesting avenue of growth for middle market companies. So Amanda, welcome.

Amanda Wood:

Thank you, Stephanie. I'm so happy to be here with you today.

Stephanie Chambliss Gaffin:

Yeah, thanks for joining us. So I think that, you know, I could read your bio. But I think actually to really explain what it is that you do. I would love to have you just tell us a little bit about yourself and about what you do.

Amanda Wood:

Sure. So my background is Capitol Hill. I worked for a senator from Florida for eight years. I was his legislative director, which qualified me when I left, to be a lobbyist. But I'm a lot more than a lobbyist. So I think when people think about lobbyists, they think about lots of cocktail parties and fundraisers and getting bills passed. And I certainly do some of that. But a lot of what I do is making sure that the federal government is either supporting or getting out of the way of the companies that I work with. So I identify opportunities for the companies that I work with to leverage federal funding and to leverage federal policy to support their growth.

Stephanie Chambliss Gaffin:

Okay, so the first thing that I have to ask you is, if I'm a middle market business owner, I'm sitting here thinking, "Okay, I should just hang up on this podcast, because I don't do work with the federal government.'

Amanda Wood:

Whether you do work with the federal government or not, the federal government impacts everything that you do, and your customers do. They can, you know, promulgate regulations that make it harder for you to do business, they can create tax policy that impacts your business, but they can also provide funding to customers. And that's a lot of what I do. So many of the companies that I work with sell to public agencies, cities, counties, and law enforcement agencies- I help those agencies get funding to complete their purchase. And then I also work on policy issues. So it could be a tax issue for a certain type of business. It could be regulatory issues that they have, it could be permitting issues. I mean, the EPA has their hand in quite a lot. So I think, you would be surprised by how much the federal government touches your business and your daily life, every day.

Stephanie Chambliss Gaffin:

Okay, so I want to dig into when you say you help find funding, help me understand this. Tell me what you mean, maybe give us an example.

Amanda Wood:

Well, let me give you a fun fact first. Okay. There are currently over 1,000 grant programs, administered by 26 federal agencies, providing more than $400 billion every year to states, local governments, and public agencies. And this is through grants and formula allocations, and all sorts of other payments, transfers of funding from the federal government, to other entities. So there's a lot of money out there.

Stephanie Chambliss Gaffin:

$400 billion, that's, that's a fair chunk of change. And so what you're saying is that these grant programs then can become like a revenue source for potential for your clients.

Amanda Wood:

It is. So I have clients, I'll tell you about the very first client that I started working with 15 years ago, who are still my clients. This is a company that does gunshot detection. So it's a law enforcement technology tool. And they've had customers for years who have said Gosh, I really want to bring this to my community, I just don't have the money to do it. So over the past 15 years, we've literally helped dozens upon dozens of communities bring in millions of dollars to bring this technology solution to their communities. So essentially, that's what I do. When a customer says, gosh, I really want it, but I don't have the money, I step in, and make sure that they can access those funds. There's a lot of federal funding out there. And I think sometimes when I talk to a city or county that has a big purchase they want to make, they're a little discouraged. And they think that, "Ah, no that money is not for me." But it is for them. And if they're not getting it, their neighboring communities probably are. So I'm there to sort of hold these companies, customers hands throughout the whole process, and make sure that they have the funding they need to complete the purchase.

Stephanie Chambliss Gaffin:

Well, so that's a really interesting point. Because I think, you know, when I talk to companies that are not currently doing B2G, right, they don't think of selling into the government, or they don't think of looking for funding sources. Often what I hear is, "Oh my God, it's just too complicated. It's just too hard." So what are your favorite, your top two tips for how people can streamline it to make it easier? And and is it worth it?

Amanda Wood:

Well, I think being able to approach the customer saying, "We're sympathetic, we know you may not have the funding, there's funding out there," having that research, and groundwork done before you approach the customer is really helpful. I also think that maybe not, not everyone is going to sell to governments. But I think what is important is that you assess where the federal government stands on what you're trying to sell. So, for example, if you are a company that is selling police body cameras, let's use an example. It would be wise to know what the current sort of policy temperature on the hill is about the federal government supporting purchasing police body cameras, to have a little bit of a look back and see what DOJ has funded in that area in the past. And this is relatively easy information to access. I think that as you're assessing potential targets, it's good to have done that research and groundwork. There are also formula funding streams. So, let's take for example, there's something called the Community Development Block Grant. And every year, HUD provides allocations to local governments, 2,000 local governments. And this is highly flexible funding. So the CDBG funding can be used by local governments, for, you know, technology, safety technology, it can be used for meals on wheels, it can be used for after school materials, it can be used for programs, can be used for all sorts of things. So let's say that you have an item that is an allowable use of this funding. You should really go check the HUD website and see how much all your customers are getting. So that when you approach them, you know exactly what they have in their budget to support the sort of things you're trying to sell.

Stephanie Chambliss Gaffin:

That's really interesting, so if you think about, again, if you think about selling into your customers, it's always convincing them of the need, convincing them that you're the solution, and then helping them find the money to buy it. So, you know, it's really interesting that it sounds like there's both the policy aspect which may increase the need for a particular product, but then also being able to help find the funding. Now you've talked about a couple of examples that, to me are sort of intuitive for this type of work, right, body cams, you know, law enforcement technology. Tell me the company, you've worked with, maybe an example of something that you would just not think of, for being a likely candidate for this kind of work.

Amanda Wood:

Okay, I've got one that comes to mind immediately. It's a company I'm working with that does off grid electric vehicle charging. So it is solar powered electric vehicle charging. And I'll tell you, the federal government does not fund a lot of off grid electric vehicle charging as sort of a standalone need. But what we were able to discover is that there's another use case for this. So if you've got this off grid, electric vehicle charger that's charging vehicles, maybe fleet vehicles, maybe public vehicles, a public amenity that a city is providing, or even hospitals sometimes have them, or shopping centers. But if you've got that as a day to day asset, it's also there in the event of a major grid field. So there's a lot of attention on emergency preparedness in the federal government. Every year, the federal government provides $1.1 billion in preparedness grants to cities and counties for things like this. So what we've done is we've established this company that came to the market as an off grid solar vehicle charging company, as an extraordinary Emergency Preparedness and Response asset, in order to make it qualify for a number of federal funding streams.

Stephanie Chambliss Gaffin:

That's a great example. And I love that and, you know, I think it will probably feel familiar to a lot of our listeners, because when you think about it, you always think about how do I frame my product, my service, in light of the customer that I serve, and so it's doing exactly the same thing. But it's saying, look, most people may be buying because of your primary purpose. But there's a very viable secondary. And if we just emphasize that, or frame that in a different way, all of a sudden, you or your customers now qualify for this whole new funding stream that you perhaps hadn't even thought of.

Amanda Wood:

Exactly. So we follow the money. And I work with companies to make sure that they qualify for these federal funding streams. We've had a series of COVID relief bills over the past five or six months, the largest of one of them being the Cares Act. And the Cares Act provided several trillion dollars in funding for cities and counties, but also for hospitals and educational institutions, for transit agencies for all sorts of agencies, public and private. And what we've really done a lot of over the past couple of months, is helping companies position their product as a COVID response tool There are a lot of things that you may not have originally sort of, you know, thought of as a COVID response tool, that we can actually provide justification so that these customers can use their funding, that they're receiving on a formula basis from the federal government to complete their purchase. So it's a lot about just sort of being aware of what's out there, so you can match those opportunities to the customer and to the product.

Stephanie Chambliss Gaffin:

So that's really interesting. And if we dive into that just a little bit more. So, the COVID response, is that, you know, I think a lot of companies are obviously, able to take advantage of that, where are you seeing them stumble?

Amanda Wood:

I think that they need to go into the customer with a COVID response justification already written up and in mind. Let me give you another example, part of the Cares Act, with something called the State and Local Stabilization Fund- $150 billion dollars to every state, and to any county with 500,000 or more people. Um, there are some restrictions on this, it cannot be used for anything that was funded in the community or state's budget before March 1. So it had to have been something that was not budgeted for; a new need. It has to be for something that is COVID response. And it has to be fully expended by December 31 of this year, which is pretty darn quick. And we're seeing, communities of a half million people, which is large, but not really large, getting you know, $120 million, $150 million, getting these huge allocations, and stressing out a little bit about how to spend it. So we're helping them spend it. So we are giving them the assurance they need in order to, one company I'm working with sells a whole lot of IT infrastructure. The kind of infrastructure that supports return to work and supports telework, in addition to being a solution for sort of day to day means. So being able to go into a state CIOs office, or a county CIO office and saying, "You know that project we've been talking about for the past year, the big project that you really want to do, but you haven't had the money for, did you know you could use your Cares Act funding for this?" They're like, "Really?" and then we show them and we show them the justification and we show them sort of the the documentation from the Department of Treasury that gives them the confidence to go ahead and complete that purchase for an item that's been on their wish lists for a long time, using this windfall that they've received from the Department of Treasury.

Stephanie Chambliss Gaffin:

So this has been really interesting to think about the government is a potential revenue source in a way that is perhaps unexpected and that a lot of companies may not have thought about. When we come back from this break, I want to talk a little bit more about the regulatory aspect that you mentioned briefly before. Right in the Middle of Market is brought to you by The Gaffin Group, a full service business consulting firm. The Gaffin Group works closely with middle market companies tackling the big challenges of today's environment and capturing the value enhancing growth opportunities of tomorrow. Too often, dogma platitudes or wishlists get confused with strategy, then it's no small wonder that execution can be muddeled. The Gaffin Group principles work closely with company boards, executives and their teams to see pragmatic, tangible results. They provide comprehensive advisory services across strategic, financial, operational and merger and acquisition capabilities, all framed by the fundamental belief that real strategy drives real results. The Gaffin Group is focused on delivering robust practical insights and fact based pragmatic solutions. Their services are designed to support their clients profitable growth, and sustainable long term value creation. Go to gaffingroup.com, to learn more about how The Gaffin Group can help you and your company. Welcome back. We are here with Amanda Wood from Becker, talking about ways to be able to work with the government to fuel growth in your business. So just before the break, we were talking a lot about how to leverage various government programs as a potential revenue source for your business. I now want to shift a little bit, you were talking about understanding the regulatory environment, understanding the maybe, what the current sentiment is towards your sector of the market. So let's talk about that a little bit more, how would one go about, and again, most business owners, they're obviously very tuned in to what's happening in their interest industry. Do you find that they're also tuned in to what's happening from a legislative perspective? Or is that sometimes a black box?

Amanda Wood:

I think that some are, and the smart ones are, and the way a lot of them are doing it, if they don't have their own lobbyists is they're really, really using their trade associations here in DC, I cannot emphasize enough how important those organizations are for giving you situational awareness for giving you talking points, for knowing when to, sort of energize you, when to make the call, when to do a fly in that we're doing a lot of virtual fly ins these days, which also work. But I do think that trade associations are really important voice here in DC and extremely influential. So if you're not going to go out and get your own lobbyists, and not everyone needs one, I would really urge you to get plugged into your trade association. There's a trade association for everything here. So trust me, there's somebody looking out for your interest here in DC, and you should take advantage of them. They trade associations survive, based on showing value to their members. So get in touch with them and see how you can be active They will, I have no doubt they will put you to work.

Stephanie Chambliss Gaffin:

Absolutely. Okay. So that's a great place to start, right? Because a lot of organizations especially maybe if they're just dipping their toe into this world, probably not going to hire a lobbyist as a first step. And so that's a great suggestion. Just start with your trade association, to make sure that you're aware of what are the top issues? And so, how does that work in DC? And I think this is something where, again, if I come back to my blackbox question, I think a lot of times, you know, we all know, lobbyists don't always have the best name, perhaps. I bet you've got a bunch of great jokes and memes collected on that topic. But how does that happen? How do, whether it's trade associations or lobbyists or individual companies? How do they shape what's happening from a legislative perspective, or can they?

Amanda Wood:

They absolutely can shape it, and part of it is just sort of being here, being in the mix. For a lot of my clients, if I'm working on policy issues for them, I'm happy to go up to the hill and meet with folks and make our case for the passage of a bill or the funding of a program. But when it comes down to it, having that sort of personal interaction with your members of Congress and their staff, is really important. Nobody can tell your story, as well as you can. So what I think the really important function of trade associations and lobbyists in DC is to give you sort of a timeline, give you expectations, give you a strategy, give you situational awareness, and arm you with what you need in order to be effective on your own behalf. So, nobody hires me and then disappears and says, "Okay, let me know when this project is done." It's a partnership, whether you're working with your own lobbyists, or whether you're working in a coalition, or with a trade association, I'm just going to say one more plug for trade associations, because I think they're really important. I think that, you know, a major function of trade associations is lobbying and federal advocacy. The other major function is just learning from your peers. They provide so many opportunities to learn best practices from some of the other folks in your industry, attend meetings. I just think that they're a great entry point, if you want to become active, and be safe.

Stephanie Chambliss Gaffin:

yeah, I certainly know that they also are great ones to be able to stay on top of what's happening, and then help you, because it can be really tough, you know, you're busy running your business and with your life, and so to know what's happening, and it may either be something that's getting in the way, or that is about to create either an opportunity or a challenge, but you may not even realize that it's coming. Okay, so that's a little bit on the policy front, the third category that you mentioned, Amanda, that we haven't talked about yet, is the regulatory front. So do you think about that separate and distinct from policy or are they one in the same bucket?

Amanda Wood:

To me, they are one in the same, because Congress greatly influences the regulatory environment in DC. So while we think of the executive branch is doing the regulatory work, there's so much congressional oversight. So we really work everything, sort of in a parallel manner. I think there's often a perception that, you know, the executive branch is just as sort of political and transient as the legislative branch. But one of the things that I've really loved about my experience in DC over the past 25 years, is that there are so many people in federal agencies that have been there for so long. That our career staff that I've worked with, for over a decade or more, to try to help my clients. So I think that having political relationships is very important. And having replaced relationships with staff is very important. But equally important, is those really day to day, hard working subject matter experts at federal agencies, because when you do have a regulatory issue, they're the ones who are going to have the historical knowledge and the context for you to resolve the issue in the right way.

Stephanie Chambliss Gaffin:

Well, that's really interesting, because I know, this is, of course, a time when a lot of people are starting to think about, obviously we have an election coming up, so if there were to be a change in administration to say, "Gosh, how much does that impact what may be available in terms of funding?" So without getting into any particular political prognostication, what is your experience about how do elections and the outcome of elections change? It's interesting, you know, your point about the career politicians that the folks that are there, you know, obviously transcending any particular administration, but how does an election impact that?

Amanda Wood:

Sometimes I feel as though the election season impacts things more than the actual outcome of the election. So the election season causes people to I would say politicize things a great deal. We're experiencing that now, but I think that so much of what the federal government does on a day to day basis, is very stable, more so than you'd think. So many of these federal programs have been around for decades. And most are around for decades, because they're really good and important programs. There are policy changes that happen. I would say, one of the probably the biggest trends in the past four years, in terms of policy changes have been things that I think impact people more than you think but are not what you hear about on the news. And it is, you know, streamlining, there's been a real trend towards streamlining and regulatory relief and relief on permitting, but that's not the big issue you hear about on the news. So I do think that the federal government, sort of despite the political winds, tends to keep marching on at a rather steady pace for you know, 98% of the functions of the federal government is responsible for. So yes, we will be able to leverage the political outcomes no matter what they are, we may leverage them a little differently. But, but the majority of what we do, is not deeply impacted by politics.

Stephanie Chambliss Gaffin:

Which I think is so interesting, because again, I've lived both in the DC area and outside of the DC area, and I think that is one of the things that outside of the DC area, when you think about government, you think about the political aspect, you think about what you hear on the news. And having lived in the area for a long time, I understand what it is that you're saying, which is that there are a number of people who have been there through multiple administrations, regardless of which party happens to be in charge at the time. And that that's actually where a lot of the work is getting done. And that much of the work that's happening, and as you said, a lot of the good work that's happening, are the things you are never going to hear about on the news.

Amanda Wood:

Very true. Very true. So, my day today will not be changed dramatically after November 3. And I don't have deep concerns about being able to accomplish the things that I've told my clients that we're setting out to accomplish the next year. Because, you know, we, we come to the Hill, and we come to agencies with a really strong story, and a use case that aligns with the priorities of this country. So as long as we have that on our side, I don't worry about the politics very much.

Stephanie Chambliss Gaffin:

So Amanda, I know that you are an extremely pragmatic person. And as I think, you know, here on Right in the Middle Market, we are very pragmatic, that is what we try to do, is give very pragmatic tips to business owners, and to those who advise them. So okay, to sum all of this up, if you were to give two pieces of advice to a middle market business owner right now, and let's take the use case of somebody who maybe has not dip their toe into this world of thinking about the government or government programs as a potential funding source, what would be two things that you would suggest?

Amanda Wood:

First, would be do an analysis of what the federal government is spending for what you're doing. And it maybe in ways that you wouldn't sort of expect, it may not be directly the federal government spending it, it may be federal government grantees spending the money. So take a look at you know, potential customers. We saw through the Cares Act, that it doesn't have to be cities or counties, it can be universities, it can be law enforcement agencies, transit agencies, things that you haven't thought about as being federal purchases, like cleaning solutions. My goodness, the Federal transit agency has spent a lot of money on cleaning solutions this year. Just you know, think about that a little get a little creative, because there is federal funding for a lot of it. The other thing I'd say, and this is so so important. Your member of Congress sees you as a constituent, you are a constituent and a constituent business. And they want to help you. And they want to look out for opportunities for you. Make sure you establish a relationship with your member of Congress and their staff. They're back in the district a lot. You don't have to come to DC to do it. You don't have to have an agenda. You can go in and set up a meeting and introduce yourself. Because then when they see an opportunity, or something that will be could be a major hurdle for your business, they can bring it to your attention, you already have that relationship established. So that's, I think that's super important. You don't have to go in with an ask the first time, but you do need to establish a relationship.

Stephanie Chambliss Gaffin:

Those are two great tips. Amanda, thank you for being with us today.

Amanda Wood:

Thank you.

Stephanie Chambliss Gaffin:

I'm Stephanie Chambliss Gaffin, and you've been listening to Right in the Middle Market, a podcast about running, growing and selling your middle market business. We'd love to hear your comments about today's episode or ideas for topics you'd most like to hear in the future. Send me a message on LinkedIn or drop me a line at podcast@gaffingroup.com and don't forget to subscribe to hear more pragmatic tips. Until next time, be well and be creative.