5 ways smaller companies can win more tenders
The most conspicuous difference between smaller and larger firms is the amount of resources they have. This can really put smaller companies at a disadvantage when it comes for bidding for tenders.
But this doesn’t necessarily mean that there is not hope for smaller companies and that it is impossible for them to win tenders. In fact, 80% of local government contracts went to SMEs in 2017.
That said, let’s take a look 5 ways smaller companies can increase their chances of winning tenders.
What are the things you should do?
1. Choose strategic partners
Sometimes, the tenders that best match your company’s capabilities really well are too big for you to handle alone.
For example, the construction of an entire MRT track may be too much for a small construction company to handle. Not only will you need to supply the manpower, you would also need to source for materials, plan the timeline, and put in place safety measures.
Finding a bidding partner can help alleviate the workload and even help you secure larger tenders. Of course, you need to be very selective with your choice. Ensure that you and your partner are aligned in terms of goals, work ethic, division of labour and payment.
2. Conduct in-depth research on the project
2.1 Have a clear understanding of expectations
It’s important to be sure that you are 100% sure of what you are going into. You should avoid situations where you end up with a project that is not aligned with your expectations. Perhaps the project requires more manpower than what you can provide. Or maybe you are unable to complete the project within the agreed upon timeline after all. The devil is in the details.
Make sure that you conduct in-depth research and ask as many questions before bidding.
2.2 Keep track of important dates
Timing is everything.
It helps to know when buyers will be releasing deals, so you will have more time to prepare and plan your internal timeline to meet submission deadlines. And as a new company, any additional time is always a good thing.
You can do this easily with past tenders, so finding out when they had released deals in the past – is it at the beginning of the year? Or midyear etc. Or is it yearly? Bi-annually?
This gives you a gauge of when the next deal will be released, and you can start to prepare even months before. Also, this will help you avoid missing submission deadlines. You wouldn’t want to miss the submission of documents for an RFI (request for information), for example. That will tarnish your reputation in the eyes of your potential client, and you would most likely be disqualified from bidding.
3. Provide value instead of just a low-cost service
As a younger company, you may have lower overhead costs and so you may be tempted to always go low on price to try and win the tender.
While this definitely depends on each deal, remember that the customer would always prefer value. If a company offers an extremely low price but fails to deliver, you can be sure the buyer will not go back to the same supplier again the next time.
Always state how your company will offer the best value for the service or products offered. This ties back to proposal writing, and how you should always help the buyer justify your proposal to their management.
It is not just about providing the best (or lowest) price. It’s more about providing the best price for each product.
4. Focus on your strengths
As a younger company, track record and credibility may not be your strong suit. The experience and reputation of older and larger firms often easily trump yours.
That’s why you need to play up your strengths.
Do you have new technology that would work better than what the current players have? Are you an expert in a niche area? Or is your team a group of star players in their respective fields who have the combined expertise of a 100-year-old company?
Find your strength and focus on providing the best offer you can.
5. Avoid leaving your questions unanswered
Once bids have been submitted, procurement officers tend to ask bidders questions to clarify aspects of the tenders.
Take this opportunity to ask as many relevant questions as you can. It can also indicate to the buyer that you are more enthusiastic about the project than the other bidders.
This can not only help you gain a better understanding of the project, but also improve the buyer’s impression of you.
Remember, it’s not the end of the world if you are running a smaller company. With these five steps, smaller companies can increase their odds of winning tenders.
For more useful information about the tendering process, check out our other content on our blog.