We often receive calls from enthusiastic start-ups who are eager to make a quick buck through bidding. More often than not however, we turn them away.
Put simply, the chances of a start-up or ‘new’ company (<5 years old) being successful in a tender are quite often very slim. This is in spite of continued Government and Local Authority attempts to make public contracts more accessible to SMEs.
But why is this the case? What can I do instead? How do I know when I’m ready to bid? Read on to find out.
The first and most important reason you shouldn’t yet be bidding is experience. Tenders are often very heavily weighted towards experience and without enough evidence in this regard, you are unlikely to be successful.
The levels of experience and associated evidence you’ll most probably need to provide include:
- At least 2 (commonly 3) previous contract examples. These must be similar to the prospective contract in value, service provision, location and buying authority (eg. other councils / schools / universities / hospitals etc.). They should also be relatively recent contracts. Something you did 10 years ago, won’t hold as much weight as something you did last year.
- Explanations throughout your responses on how you plan to provide your service in reference to the ways you have done it in the past. Questions on everything from Quality Assurance to Business Continuity will benefit from the insights you can provide of past performance and how you’ve learned from experience as you look ahead to the new contract.
You should consider what you’ll be able to present on your experience. If you cannot provide much, consider that your competition will most likely beat you in this regard and you’ll be much less likely to succeed.
As well as experience there will be several compliance points that you may need to meet. Simply put, if you cannot meet these requirements you will fail. Even if the following are not explicitly required, failure on any may still hinder your chances.
There are dozens of policies you may be required to produce in your bids. Some will obviously be more relevant and necessary than others depending on the service you provide.
In healthcare for example, policies such as safeguarding and safer recruitment will be most important. In construction, health and safety, quality assurance and performance monitoring may be more relevant.
Regardless of your industry or service however, being able to evidence that you have the requisite policies in place will be very important as you look to succeed in tenders. If you do not yet hold a full suite of policies, you shouldn’t consider bidding.
Struggling to source affordable, bid-compliant policies? Click here for info on our Policy Writing Service.
In a similar vein to policies, accreditations are one of the best ways to display to a prospective client that you are proven in a particular area of your business. Our Big List of Accreditations covers almost every certificate and membership you could consider.
Being able to evidence that a third-party has audited your company for quality, health and safety, information security etc. will go a long way in the eyes of evaluators as they look to delineate the wheat from the chaff.
Again, if you don’t have the required accreditations, don’t bid (yet).
Before being considered for a contract, buyers will often require all bidders to evidence a certain level of economic and financial standing.
This is perhaps the most black-and-white way to decide whether or not to bid. If you don’t meet the turnover, you shouldn’t be bidding.
Beyond this however, and particularly for tenders without minimum financial requirements, we advise never bidding for a contract worth more than a third of your annual turnover (eg. if it’s worth £1m, you should be turning over £3m). While not a steadfast rule, this recommendation should assist you in determining with which tenders (if any) you have a reasonable chance of success.
Why Do You Think You’ll Win?
A slightly more abstract, but no less important aspect to consider before bidding, is why and how you believe you’ll win. Put simply, if you can’t explain to yourself why you’re the best company for the job, you won’t be able to convince the buyer.
Are you better than your competition?
This question links closely to experience. You must evaluate your own position in your market and whether you think you can reasonably compete.
As a start-up or a smaller company, we’d advise that you most probably cannot. While there are many benefits to being a small company (more responsive/flexible, more personal service etc.), the resources, experience and tried and tested processes of a larger firm will be hard to contest.
Can you offer anything your competition can’t?
It is by no means a steadfast rule that smaller companies will always lose, in fact we have seen many David vs Goliath style successes in our own line of work.
Companies in niche, emerging or highly technical industries such as software development or cutting edge technologies like AI or robotics may benefit especially in this regard. The lower overheads of smaller companies, teamed with a highly specific set of technical skills and a more personal and flexible service will help in standing out against larger, less agile competitors.
Not all industries lend themselves to this exception however. In industries such as Care, FM, Construction and so on, size and experience will still most probably win out.
It’s really a case of applying a level of common sense. If you can offer a level of service that no one else can, regardless of your size, you’ll stand a good chance.
What to Do Instead
So you’ve called us and we’ve told you point blank that you shouldn’t (yet) be bidding. What do you do instead? How do you get yourself bid-ready? How can you gain the experience you need to win, without winning in the first place?
Well, other than ensuring that you follow the steps we’ve outlined above, the simple answer is to start small. Instead of trying to jump into business with a £300k contract, you should build your business gradually on smaller, privately secured contracts.
As you build a portfolio of success stories, you also build upon your experience, capacity and necessary compliance points. These factors will form an essential part of your success in tenders as you move forward.
Once you feel ready to successfully tender, we would recommend focusing first on securing places on framework or DPS (Dynamic Purchasing System) agreements. These contract types are usually built upon long lists of approved suppliers rather than a single successful tenderer. More places are therefore available per tender which means more opportunities for success.
As you become increasingly successful on frameworks, you should only then consider looking at bigger, single-supplier contracts.
At Bespoke Bids, we offer a number of services designed around helping organisations to become bid-ready.
Our Bid Readiness Audit Service can be tailored for companies of all sizes, ensuring that everything from your policies to your staff are as ready as possible to succeed in bidding.
For more information on this, or any of our other services, please feel free to get in touch and we’ll be happy to help.
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