By becoming a pre-approved vendor to key accounts, smaller professional services providers are more likely to be awarded repeat business.
Owner-managers of business services firms tell me they are on a rollercoaster: too busy delivering client work to go after new business or frantically chasing down the next assignment because there is no work.
Preferred Vendor agreements can lead to annuity types of assignments.
When you are told "It's not in the budget", this usually means not in the annual operating budget. This is the budget which pays for expenses occuring every year. For example: Cost of sales, Advisory services, Cost of Goods Sold appear on every balance sheet.
Annual budgets are recurring expenses and are administered by purchasing departments.
Discretionary budgets are signed off by senior officers, to be spent on special projects outside of normal day-to-day operations.
Discretionary budgets support short-term, critical objectives. Senior executives may make commitments to investors and shareholders about these objectives, so the best place to find out about them in quarterly earnings reports.
If the CEO has made a commitment, for example to "reduce costs by 1%", that is where the executive committee will be focused for the next reporting period and that is what their discretionary budgets are likely to be spent on. Look for goals which may sound like this:
“2% gain in market share this year”
“entry into the China market by 2015”
“move to # 5 position in the industry”
Align your firm's offering with large, strategic initiatives rather than with general benefits like "we help drive sales".
Discretionary budgets increase your company’s odds of securing a first-time contract and thus your chances of becoming a pre-approved vendor.
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