SMEs are not good at chasing tenders but help is at hand
Under 10pc of SMEs have managed to win a lucrative government contract and many don't even bother to apply - but a new company is now there to lend a helping hand
Every morning when I check my phone, I am certain that there will be an email in my inbox from the e-tenders website. I subscribed years ago for the areas that my company is interested in which include consulting and training. I read the body of each mail and then typically delete it.
If one tender looks more appealing, I return to it eventually and click through to the e-tenders website to explore it further. And then, more often than not, I delete it anyway.
If that sounds familiar to you, then you've probably been as sceptical as me. But after meeting Tony Corrigan the founder of Tenderscout, pictured, I have changed my thinking.
SMEs and Tender Opportunities
"Here are four amazing statistics about government tenders. Less than 10pc of all Irish SMEs are recorded as having won a government contract. Only 10pc of Irish SMEs bother to enter in the first place. 25pc of all EU contracts only have one applicant. And 10pc of all tenders don't even get one response," said Tony.
This seems quite incredible to me, given that sales (with guaranteed payment) are a lifeline for any SME. In my conversations with SMEs over the years, I know there is a high level of cynicism and scepticism about the likelihood of actually winning a tender.
Many of us think that the entity has already made their mind up and is simply going through the motions.
Or we also think that they'll go for the cheapest bid. "That's simply not true," Tony assures me.
The Pitfalls for SMEs Responding to Tenders
Here are the typical pitfalls SMEs fall into when responding:
Finding opportunities on a web portal. If the first you know about a tender is because you saw it on a website, then you're on the back foot.
- Assuming that you know how to compete. Most businesses think they can tender just because they can write a proposal. The evidence is that they lose 75pc to 90pc of the time.
- Assuming that they know what they're doing. It is not likely that a company whose core expertise is digital marketing is also an expert at government contracting.
- Failing to qualify the opportunity. Most businesses compete in hope rather than expectation because they have no idea who the competitors are, what the buyer is looking for, what the budget is or whether in many cases they actually know what is required.
- Spending too much in competing. Businesses continually spend too little competing for individual opportunities and as a result, end up spending too much overall. They continually reinvent a sub-standard wheel rather than focusing on getting it right the first time.
- Assuming that the buyers knows what they want. Tenders exist because the buyer needs something, but they may not know exactly what that is. Buyers will often educate themselves through the process, so you always have a chance to influence the outcome.
- Failing to learn from your experiences. All tenders are scored and tell you where you need to improve. Most businesses ignore this advice and keep repeating the same mistakes.
Change Tips for Responding to Tenders
1 Read the tender requirements: Make sure you qualify (turnover, etc). If you don't, find a collaborator.
2 Qualify the opportunity: Who is the competition, what's the budget, can we actually deliver? Can we make a profit?
3 Estimate the cost of competing: Decide how much effort it's going to take to compile a response and who's going to do it? There's no point in half-doing it. Ensure you can still break even when counting the cost of competing.
4 Decide whether you need professional help: It may be cheaper than doing it yourself and will certainly give you a higher probability of success.
5 Give yourself enough time to do justice to your proposal: Finish it a week before it's due in to give you a chance to read, edit, refine and improve it.
6 Submit the tender on time: The number one reason why tenders fail is because they are submitted late. Even a second late is too late and it will not be evaluated.
7 Regardless of the outcome, seek a face-to-face debrief: This is the start of your next sales cycle.
Tony founded Tenderscout and has developed a software solution to support organisations in improving their chances of success. What the team don't know about tenders is not worth knowing.
Imagine if you were doing an exam and someone let you see the answer before you sat for it? This is exactly what Tenderscout offers. Rather than having to start with a blank sheet of paper with each tender, Tenderscout can help in a number of ways. Either with a repository of prepared answers that you can 'copy and paste' or with consulting support.
Given all of the pitfalls outlined above, Tenderscout removes the stress and enable SMEs to compete and has a win rate of 70pc for its clients. My company will be signing up as a new customer.
I will endeavour to return to this topic in a few months to tell you how we got on
- Alan O’Neill is managing director of Kara Change Management, specialists in strategy, culture and people development. Go to www.kara.ie if you’d like help with your business. Business advice questions for Alan can be sent to email@example.com
Sunday Indo Business