It’s really quite funny but when I speak to people about “tenders” it can conjure up mixed messages! So people think it’s a way of being kind and gentle (wrong in this context!), others simply shrug and say “isn’t that what you have to do to work for the council?” or even the fact that you drown in paperwork before thinking about tenders, but let’s try and clear up a few myths and see if we can make any sense of tendering.
Tendering is, put simply, a way of securing work from a customer over a set period of time for a set of charges or costs. It usually has a detailed specification or activity which is explained in good levels of details. It can be for goods or services and often people refer to it as “bidding”, “procurement” “purchasing” or “contracting”.
Now, there are Pro’s and Con’s to tendering, so let’s firstly look at the pro’s;
- It enables you to plan for the future (with cashflow, staff, stock etc) as you are supplying a certain amount or value to the customer in a set period (usually over a period of 2 years minimum).
- For public sector they tend to pay their bills quickly (they are targeted to pay SME’s within 21 days) so as long as your invoice is correct and you have a valid Purchase Order (PO) this should all be processed quite quickly and you’ll receive BACS payment shortly after sending the invoice.
- It can act as a spring board for winning other work. As you can demonstrate that your company is capable of managing and handling contracts of a certain size and length of time, it proves that you are a good supplier and this can act as a catalyst as a sales tool for other contracts and clients.
- It can raise your profile significantly. By winning a contract it may make your competition view you more seriously or even become wary of you, but it also means that your company branding will be known by more people, be seen by more people and this in itself is great publicity.
The Con’s are quite damning and shouldn’t be dismissed as these can often be viewed as being “onerous” but I would add to this the fact that a lot of tenders require the hard work up front. So if you are prepared to do the hard work in an organised and methodical manner this may not prove too bad!
- You need to be organised and efficient to respond to the tenders. It requires a lot of information, and it’s worth gathering this together into one computer file so that you have the information at your finger tips ready. This information will include financials, staffing, previous customers and contracts, insurances and policies and procedures.
- Every tender is different. In style, in the questions posed, in the way you need to respond. Some are hard copy sent in multiple copies to an address. Others are uploaded through systems which are known as “portals” or for the really nerdy “Purchase to Pay systems”. You need to be ready to change your approach for each one.
- Tenders are time consuming. Beware if you are putting your first tender together it could take you several days to compile it by yourself.
- Tenders are in stages. Firstly there is the PQQ (Pre Qualification Questionnaire) which is factual information about you and your company – to establish if you are a suitable would be supplier for the contract. Then you go to the ITT (Invitation to Tender) stage and this usually relates to the “how” of the contract so for example questions such as “How will you manage it?” “How will you ensure quality?” “How will you staff it?”
So before you consider tendering, or even before you dismiss it, consider the facts above and remember that it takes time, it’s not a quick win, but once it’s done and you win a contract then you will rewarded as you no longer need to sell again in the contract duration. However you do need to ensure that your service / goods supplied remains good in quality and that your end customer stays happy!