Meet the Influencers: Shiv Krishnan, SECAF

As the Small and Emerging Contractor Advisory Forum (SECAF) enters into its fifth year of providing a resource to the government contracting community, I took a few minutes to speak to Shiv Krishnan, the new SECAF Chairman, who also serves as founder and CEO of INDUS Corporation. He shares his perspective on the contracting community, the upcoming administration, and advice for growing businesses.

- Elizabeth Shea

Q. You are the incoming Chairman of SECAF. What exactly is SECAF and how long has it been around?

SECAF was started five years ago, by a small group of very passionate people who all cared about building a community that catered directly to the needs of small and emerging businesses in the government contracting industry. They identified the existing need for an association that spoke directly to the small and emerging contractor, in a way that other organizations do not do.

SECAF was founded to address critical questions such as: “Where are the opportunities for small businesses? How do I grow and become a large business in the future? What regulations or restrictions will limit my growth?”

Now, SECAF caters to 250 members; the bulk of our members are companies in the range of $1M to $25M in annual revenue. The Founders, CEOs, and CXOs from these small and emerging Government contractors actively participate in SECAF’s events. Larger companies interested in partnering and teaming with small businesses, and professional services firms (law firms, accountants, bankers), supporting the needs of the small business community make up the balance.

Q. You run a very successful, $100M government technology services firm yourself. What do you and INDUS see as a benefit to being involved in SECAF?

Well, there are many things, both personally and professionally. Personally, I grew INDUS from being a small business and saw first hand the benefit of being involved with many organizations that helped me along the way. I personally enjoy the part of this role that enables me to give back to the small business community, and help them grow.

Professionally, the opportunity for me and other INDUS representatives to get to know the small business community is invaluable. More than 20% of government contracts go to small business, and there is legislation on the table that could increase the number to 30%. INDUS needs the small business community, and the small business community needs us. Similarly, I can help the larger integrators in the same way, by being a subcontractor to them. In this business, it is all about partnering and relationships. We are about creating a win-win for everyone, and SECAF helps nurture those relationships in both directions.

Q. What do you see in the upcoming years for the government contracting community?

I see many changes, some positive, some not-so-positive.

On the positive side, the push to increase contracting dollars going to small businesses is good for our community. More integrators will have incentives to partner with small business, which in turn could help stimulate a critical part of our economy.

On the not-so-positive side, there will be challenges, including:

1) We have to wait and see what will happen with budgets in 2009; so much money has been spent on the war effort, that other national priorities and domestic program budgets have suffered for the past two years. The declining budget trend combined with the changes from a new administration with new initiatives, could delay new program allocations for 6-12 months. Most of us are looking to the Government’s FY2010 budget and are optimistic that our businesses will be able to fulfill the Government’s new program initiatives.

2) The M&A landscape will be affected in the government contracting industry, as company valuations are being lowered due to SBA’s new regulatory changes related to re-certification. If a small business wants to sell to a larger contractor, that business has the risk of losing valuable small business contracts, which made the valuation higher in the first place. Small businesses may not see their true valuation in the eyes of the buyers. The current global economic crisis also adds fuel to that fire.

Q. What advice can you give a small- or medium-sized government contractor in this market?

Given the challenges we all face because of the economic turmoil, but particularly with all the changes we can expect in the next 6-12 months, it is critical that the small and emerging contractors work hard to get through the next year. Several small businesses are really struggling right now because of the credit crisis.

I have three pieces of advice, all equally important: 1) Continue to do an excellent job of taking care of your customers. Help them understand what other services you can provide which they may need. Your customer may be inclined to give you that work under your existing contract if they aren’t able to issue a new contract. 2) Continue to focus on cash flow and receivables. It is as important as anything else you do. The government is the best payer in the world, assuming you have your paperwork in order. If you get it wrong, the clock starts over if they have to send it back to you. Having access to cash in the next 6-12 months is critical, and even more so when credit is so hard to get. You can’t expect your bank to always come through—they are in a crunch themselves—no matter how great a relationship you have. 3) Focus on positioning yourself for new opportunities in the next 6-12 months. When they arise, you want to be ready.

Q. You applaud and mentor entrepreneurs. What advice would you give someone just starting out?

Focus, Focus, Focus! I would tell entrepreneurs just starting out in this industry that they should look inside to see what they do really, really well, and be laser-focused on their strength. The government customer is not taking chances right now, so one had better be the best at what he or she does and deliver flawless, high quality service. Once entrepreneurs gain experience by doing what they do best, then go out to expand to other agencies, rather than trying to add on services where you aren’t the best.

Q. What SECAF programs are you most looking forward to this next year?

We’re making a couple of changes this year that I’m very excited about: 1) we are expanding the ever-popular Procurement Forum, being run by Tiffany Gates, Board member and Chair of our Programs Committee. This year it will be especially interesting given all the changes in priorities from the incoming Obama Administration; 2) we are also excited about the first-ever SECAF Awards Gala, the only one of its kind focused on the small and emerging Government contractors, to be held on April 16, 2009. Most of the awards banquets around town recognize large businesses, and we want to showcase some of the best businesses in the $0-$6M; $6M-$12M and $12M-$25M categories. We look forward to celebrating their success!

Q. How can contractors get involved in SECAF?

Becoming a member is easy; $200 a year enables your entire company to become involved! To be a member company, you must sell directly to the government community, and then anyone from your company can attend events at member prices. If you provide services to the government contracting community (professional services firms), the price is $400 and we ask that you bring in at least two government contractor companies to keep the ratios in favor of contractors.

Once you are a member, however, you can do more than just attend events. I encourage everyone to get involved. There are four committees interested in your support; it’s a great way to get to know the SECAF Board and other companies in this region. The four committees are:

1) Membership: help reach out to other potential members and grow our organization to be even stronger.
2) Programs: help make suggestions on speakers. The program content is what keeps people coming back.
3) Legislative affairs: be involved in the process of examining and communicating what legislative issues are affecting our community
4) Communications: help spread the word about SECAF and make it the Voice of Small Business!