So you've seen a tender opportunity that looks like it might be a good fit for your business. The question of whether to bid or not to bid arises.
But writing a good tender response takes a lot of time and effort - so it's important to have a solid strategy to help you determine whether or not this particular tender is worth putting in a response to.
Here's a few simple tips to help you decide whether or not this is a good opportunity
The Contract
If you win the bid, you will be bound by the conditions of the contract for the term of the contract. It is usually a good thing! But make sure you've read the tender submission contract thoroughly to ensure there aren't any deal breakers in there for you. Pay particular attention to the payment terms to ensure they suit the cash flow requirements of your business.
The Location
Is location important? If the contract is located in your city and you're happy to travel from one end to the other to get the job done, then that's great! But if it doesn't make good financial sense for you to travel potentially hundreds of kilometres a day to perform work, then maybe this isn't a good fit for you.
Anticipated Return
Many businesses will only go through the tender response process if the potential contract value is worth pursuing. But sometimes, it's worth chasing a contract with a lower total value than you usually bid for.
For example, if the tender has been issued for a sector you've been trying to gain experience in, you can use this for future larger tenders.
In general, it's a good idea to know what the lower and upper limits of the contract value are that will make sense for your business.
In general though, it's a good idea to know what the contract value lower and upper limits are that will make sense for your business.
Experience and Stability
Like it or not, your demonstrated experience and financial stability will have a BIG impact on your likely success rate for tender submissions. If you're just starting, you might want to leave it a year or two before responding to tender opportunities.
But if you spot an opportunity that seems to have your business written all over it, then there are strategies you can use to give it your best shot. For starters:
Highlight the experience of your key people — particularly the experience they've had on similar projects and how many years they've been doing what they do.
Clearly demonstrate your understanding of the conditions of the tender response and what it will take to deliver on them. For example, if you're a security service provider, include detailed information showing how you will deliver the services. If you're in the food service business, show how well you understand food safety requirements.
Establishing financial stability when you're a relatively new business is challenging. Still, financial projections showing actual versus budget for the period you've been in business are a good place to start. If you have them, you can also add evidence of your bank accounts, line of credit, or bank guarantees in your tender submission.
What's it Going to Take?
If you put the time and effort in to bid, make sure you are very clear about what it's going to take to deliver if your bid is successful. Can you handle the contract with your existing staff? If not, what is the labour pool like in your area, and are you confident you can hire enough skilled people to meet the contract requirements?
Also consider if you need to spend capital buying new equipment, if you'll need to expand your premises or if our internal systems can cope with the extra workload for the tender response.
Still not Sure? Give me a Shout
If you have a tender opportunity but you're just not sure if it's right for you, or if you have one that you need a hand with, shoot me an email, call me at 0400 514579, or fill out this form An initial discussion costs you nothing, so what have you got to lose?
In the meantime, happy tendering!