What SMEs need to know about bidding for business
SMEs often find winning government contracts and private sector projects to be an extremely lucrative way to take their business to the next level. Bidding can be a crucial opportunity to win new business, grow reputation and expand market share.
But bidding is highly competitive by nature, and SMEs often lack the resources available to larger companies. There’s also a strong element of risk – potentially, even a good bid can fail, meaning you've allocated scarce resources in vain. Because of this, many SMEs avoid bidding entirely, and lose out on growth in the process; but that can means a powerful competitive edge for you if you're an SME that's winning bids, while your similarly-sized competitors aren't putting their hat in the ring.
Bidding is never risk-free, but the returns can be game-changing when done right. Here’s what you need to know to drive business success through effective bidding.
Understand the Procurement Process
SMEs need to understand how procurement works in the first place: the process of finding and acquiring goods, services or works from an external source. Government contracts generally follow a formal procurement process designed to ensure fairness, transparency, and value for money. SMEs should become familiar with procurement rules and regulations for the market in which they operate. It also helps to look at closed tenders specific to your industry, to see what background information was provided in the Request for Tender document.
Identify Suitable Opportunities
This involves focusing only on opportunities that align with your SME’s core competencies and capabilities – you can’t be all things to all buyers, but you can be the best fit for the right buyer. Review procurement notices and make sure your SME and its offerings meet at least minimum requirements for the opportunity.
It also helps to have a plan of attack in advance, so you can ‘hit the ground running’ – keep an eye on Early Tender Advice notifications, and previous tender or bid opportunities published by the buyer. You can learn about what they’ve required from previous providers, and what they might look for in the future. Make sure you’re aware of major trends in your market – what major projects are coming up in the future? Who might be a potential buyer in the future?
Understanding buyer needs and project requirements will enable your SME to tailor bids to opportunities, giving your bid a competitive advantage and increasing chances of winning work.
Develop a Strong Bid Strategy
Your bid strategy should outline how you will approach the project: your methodology, pricing strategy, and project management plan. The strategy needs to include a detailed understanding of the buyer and their needs, what differentiates your SME and its offering – unique advantages you can utilise so that the buyer will select your bid. You must understand not only your SME’s strengths and weaknesses, but also the gist of other potential bidders’ strengths and weaknesses so you can position yourself as a better choice – a for example, a smaller boutique company may better address niche requirements compared to a large generalist, have transferable knowledge and experience, competitive pricing, or find other ways to demonstrate value.
Where you identify gaps that may hold your SME back, consider partnering with other companies for mutual benefit. This can provide access to complementary capabilities, resources, and experience to unlock access to new opportunities. Choose partners that you trust, and who are aligned with your SME’s values and objectives.
It’s also much better to do the groundwork by developing partnerships long before the opportunity opens, rather than scrambling at the last minute. An honest appraisal of your SME’s strengths and weaknesses can position you to find the right partners for when the right opportunity arises.
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Create a Compelling Bid Proposal
Your bid proposal should be a well-written, concise, and easy to understand document designed to clearly communicate your solution to buyer needs, and how this solution not only differs from, but is better than, the competition. It should also be appealing to the reader’s attention, as decisionmakers are often required to read many lengthy bid proposals. Do them a favour – keep it succinct and memorable. Use graphics, charts, and images to guide the eye and illustrate key points.
Consider your pricing strategy when developing your proposal; it should be competitive, but not a race-to-the-bottom. Take into account your costs and profit margins and know your worth – better to miss the wrong opportunity now, rather than allocate resources that stretch you to capacity and lead you to miss better opportunities later. Your pricing strategy should be sustainable and enable your SME to deliver the project to a high standard, bolstering your reputation and potentially leading to new work in the future.
Submit the Bid
Submit your bid to the buyer before the deadline. It’s important to have an internal deadline for the finished proposal that gives you some time for any final tweaking before on-time submission – it’s easy to realise at the last minute that something has gone wrong. A bit of leeway means you will be better positioned to ensure the bid is complete, compliant and competitive.
Learn Lessons
Every bid you develop is an opportunity not only to win work, but to learn and improve your bidding processes. Once a decision has been made by the buyer, reach out to ask for feedback on the proposal – this means you can learn more about the buyer and their needs for next time, as well as addressing any shortcomings. It’s also important to store your work on this bid in a way that you can build up ‘boilerplate’ responses to re-tailor for future opportunities, rather than starting again from scratch.
Getting SME Bidding Right
Winning contracts through bidding can be an incredible growth opportunity for SMEs – when done right. By following these steps, you can increase your chances of winning contracts and growing your business.
Of course, SMEs often lack experience in best-practice bid management which can form a catch-22 when bidding for work; but this doesn’t mean your SME has to miss out on bid expertise.?Talk to ProposalPro today?about how our APMP-accredited team of bid professionals can help you to tender for the right opportunities, maximise your success rate and make the most of your SME’s growth potential.