Common Issues and Challenges When Growing Your Business

HOST: JOHN CARPENTER: Welcome to Cherry Bekaert's GovCon Podcast, where we discuss current government contracting trends, compliance matters, and best practices that guide our federal contractors.

HOST: JOHN CARPENTER: I'm John Carpenter, a principal with Cherry Bekaert, and with me is Susan Moser, leader of Cherry Bekaert's Government Contract Group and one of my partners.

HOST: JOHN CARPENTER: Today we're going to talk about some of the financial and operational challenges our government contractor clients have encountered as they move into growth mode.

HOST: JOHN CARPENTER: Nearly every client we have wants to be in growth mode, but as they get there, they face many challenges. Susan, what are some of the things you're hearing from clients?


SUSAN MOSER: These are not in any particular order, but they are common issues that come to mind from conversations with clients.

SUSAN MOSER: One of the first is cybersecurity threats. They continue to increase, and companies continue to spend more on cybersecurity.

SUSAN MOSER: Cybersecurity is one of the biggest concerns for many CFOs, whether that involves meeting government requirements such as NIST SP 800-171, worrying about employee insider threats, or preventing loss of security, privacy, and data.

SUSAN MOSER: It's a continuing area where companies must invest more resources.

SUSAN MOSER: Another common challenge for small, growing government contractors is resistance to change. What got a company where it is is not the same thing it needs as it evolves.

SUSAN MOSER: A small-company culture can be averse to change, and as the company grows, it's important to scale and implement changes in processes and people to remain competitive.

SUSAN MOSER: Planning for competition outside of the small business program is also a frequent topic. While set-aside opportunities can be valuable, successfully executing outside of the small business program presents substantial challenges for many small businesses.

SUSAN MOSER: Digitization, cloud computing, and artificial intelligence are three big trends driving change. Many companies have already adopted cloud computing, and over the next several years, artificial intelligence will continue to increase efficiency, particularly in the finance function, and improve internal controls.

SUSAN MOSER: Most CFOs still spend too much time collecting data and not enough time analyzing and planning.

SUSAN MOSER: Technology should help improve this, but it will also require changes in skill sets across the organization, not just in finance. Employers will need to evaluate their employee base and prepare for industry disruption that creates both efficiencies and challenges.


HOST: JOHN CARPENTER: I've heard clients say that adaptation to change must permeate the whole organization because it's not just the CEO.

HOST: JOHN CARPENTER: Field personnel who manage billing and reporting to government customers must also embrace digital change, and their adoption can be just as critical.


SUSAN MOSER: Probably the number one issue clients raise is increased competition for talent. This is particularly difficult in the D.C. metro area but affects firms across the United States and throughout the government contracting industry.

SUSAN MOSER: Many clients find growth is hindered by challenges in recruiting and retaining employees. Employees will move for higher pay, and technical expertise is extremely competitive.

SUSAN MOSER: The security clearance process also poses challenges, and while it may improve in the future, it remains a significant constraint.

SUSAN MOSER: Government contractors and CFOs need to look for creative approaches in hiring, recruitment, and retention.

SUSAN MOSER: We do not see an end in sight for these talent challenges, and I would say this is the largest concern for most of our clients.


HOST: JOHN CARPENTER: There are lots of factors that can hinder growth, and those are a few issues I hear frequently in client conversations. Thank you, Susan.

HOST: JOHN CARPENTER: Thanks for listening today, and we encourage you to tune in to other podcast topics as they appear. Have a great day.