While we are still counting the cost of COVID-19 on the economy and UK businesses, we know that record numbers of new businesses have been created. The government has a target (which it is not currently meeting) of spending £1 in every three with Small and Medium-Sized Enterprises or SMEs, and there are many benefits to smaller businesses for winning public sector contracts.
But, if you’ve ever taken a look at a tender document, you’ll know that there are usually a number of questions designed to assure the buyer that your business is established, experienced, and stable. So does that mean that new businesses can’t apply for tenders? No. Every applicant will be assessed on their own merits, and there are ways to make a case for even a brand-new business; here’s how.
When a company assesses a tender, they want to make sure that your company is in a financial position to deliver the service. As a general rule of thumb, you won’t be able to apply for tenders that are more than 50% of your annual turnover, and you’ll be asked to supply three years of accounts to prove your numbers to the client.
However, many tenders also include options for businesses that aren’t able to provide those accounts. Check the tender documents carefully, as you may be able to provide profit & loss sheets, forecasts, and other evidence that your business will be stable enough to sustain the contract.
It’s usual to have to provide at least three referees for a tender. These are usually specified to be for contracts or frameworks that are as similar to the one you are applying for as possible, and we would certainly recommend that you choose your references with care to emphasise the areas you want to in your tender.
However, if you’re not able to provide three references then you may be able to provide a written statement that explains why you don’t have the ability to do so. This is often capped at 500 words, so around one side of A4, but will allow you to make a case for your experience without providing references.
There’s no getting away from the fact that having the right references and experiences helps, but how do you get that without winning a contract? If you’re looking to grow your business through bids and tenders, it’s worth thinking tactically; take an honest view of where you are now, and where you need to be to win those tenders.
We run a free ‘Get Bid Ready in Five Days’ challenge that helps you do just that. We work through the process of finding tenders, looking at the requirements, and come up with a road map for winning them. If that sounds like it would be useful to you, you can join the waiting list for the next presentation (May 2021 at the time of writing).
One way to start gaining that experience is through consortium bids or being a named contractor on a contract where another, more established company takes the lead. If you’re wondering why bigger companies might do that to help you, it’s because they need to meet the social value requirements of a bid and that includes nurturing their supply chain and helping them to grow and become more sustainable.
Building Your Case
If you are going to be bidding from the slightly disadvantaged position of a new business, then you’ll need to make sure that all the other aspects of your bid are airtight. That means analysing the tender documents carefully and putting together responses that are both compliant and responsive.
It can help to prove your capabilities with industry certifications or standards, even if those aren’t required for the bid. Anything that helps reassure the procurement team that other people consider you to be at the top of your game.
And as ever, if you’re putting together a tender (whether it’s your first or you’ve got a few under your belt) and you think you need some help then give us a call. We’re SME specialists, and that means we understand how to make smaller businesses compete on a level playing field with the corporates. Get in touch today to find out more.Back to Blog