Non-profit organizations can represent a viable market for IT specialists, although more financially lucrative sectors often exist. Let’s explore the advantages and disadvantages of pursuing non-profit clients.
One advantage is accessibility. Non-profits frequently belong to trade groups, and their directories are often publicly available, making them easier to reach.
Another benefit is the potential for emotional satisfaction. Knowing that you’re contributing to a worthy cause can be deeply gratifying.
However, non-profits also present significant challenges, primarily thin profit margins and intense bidding wars.
Bidding scenarios can commoditize IT services. When bidding against competitors adhering to pre-defined specifications, the focus shifts to price, potentially encouraging shortcuts and preventing you from proposing optimal solutions.
For many IT specialists, serving private sector small businesses proves simpler than navigating the complexities of non-profit and government bids. Unfortunately, non-profits and government agencies are often legally obligated to accept the lowest qualified bid.
Bidding wars diminish the importance of trust, personality, and established credibility. Success often hinges on factors like bonding capacity, strict adherence to rules, and timely submission of bids.
Furthermore, bidding demands considerable non-billable upfront work, including research and configuration development. Securing the contract is never guaranteed, making this investment risky.
If pursuing competitive bids, limit the time dedicated to this activity to no more than 20% of your business development efforts, unless your company specializes in serving non-profits or government agencies. Generally, focusing on traditional private sector small businesses is more profitable.
A well-defined Request for Proposal (RFP) from a government agency seeking outsourced support services can be an appealing opportunity. However, merely providing hardware and one-off installation services often leads to profitability challenges.
In conclusion, while non-profits and government entities represent better options for IT specialists than retail, they are not as attractive as the core market of small business computer consulting.