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  • Writer's pictureGovSales University

What is Your GMO?

When we start new business ventures, we have to calculate all kinds of numbers, our investments, RISK assessments, etc. Selling to the government is no exception to determine if you are a good fit to sell your product or service.

The good news? The government buys EVERYTHING. The next step to see how successful you can currently be based on your resources is something easily calculated with our simple formula, your Government Marketing Opportunity (GMO).

The GMO framework uses the amount the government is currently purchasing of the products and services you sell, and compares that to your company's overall sales of those same products and services. The resulting multiple helps you assess how aggressive you should be.

The math is simple. Aggregate all the government sales in the last 12 months of the products and services you sell and divide that by your company’s total sales of those products or services over 12 months -- that gives us the multiplier.

For example, if the government purchased $50 million of widgets in the last year and your company's sales of widgets were $2.5 million -- we divide $50 million by $5 million, and the resulting multiplier is 20x.

We then take this multiplier, and we see where it falls on the GMO framework chart. The framework has three levels (or tiers) to it:

Top-Tier (10x+): If the multiple for your company falls within the 10x level, you should stop what you're doing and pursue government sales immediately. It's an enormous opportunity. The government is buying more than 10x of your total company sales. You must begin selling to the government.

Middle-Tier (3x to 9.9x): If the multiple for your company falls within this middle level, selling to the government is a major opportunity and it has to be part of your future sales strategy. Government sales represents one of the most significant market segments you can pursue.

Bottom-Tier (less than 3x): If the multiple for your company is less than 3x, you should consider pursuing government sales, but it should be done with consideration of other initiatives your company is working-on. You want to make sure you have the proper time and resources to be successful at the government sales process.

To summarize, if your multiplier is:

10x or higher - Government sales is something you should pursue immediately.

3x to 9.9x - Government sales should definitely be a part of your sales strategy.

Less than 3x - Government sales should play a role in your overall sales initiatives.

Want to know what current opportunities are in your area so you can calculate your GMO?? Schedule a consultation call with our team!


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