The Advantages of Tendering – should your business be bidding for work (right now)?

Published 10/07/2020
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The advantages of tendering are obvious to those who have been there before. If you haven’t, and you’re just starting now, we know that the tendering process can seem daunting. This is especially the case for SMEs, as it can sometimes feel as though buyers want ‘big business’ suppliers. However, it is important to remember the advantages you have over larger businesses with bigger overheads.
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At the time of writing this blog, it would seem that the UK is beginning to find its feet again as we emerge from the Covid-19 pandemic. Businesses are re-opening and companies are inviting their employees back into the office. This is great news for most small businesses who have struggled through the weeks of lockdown. It is now, arguably, more vital than ever to secure a pipeline of work.

Securing a pipeline

It might surprise you to hear that over the course of lockdown, we have continued to support a steady stream of businesses with their tendering efforts. In many sectors, buyers continued to publish calls for work and invite potential suppliers to tender. However, this wasn’t the case for all industries. As we’re all aware, the events industry and the hospitality and tourism sectors struggled through this difficult time.

There is good news, however. As part of the Hudson Group, we support businesses in both of the aforementioned industries (as well as 11 other sectors). Throughout this challenging time, our team has continued to rigorously search for new contract opportunities to help these industries thrive when they return to work. On both our Creative Tenders and Hospitality Tenders portals, we have continued to source work for:

Catering;
Events management;
Videography;
Venue hire;
Catering equipment;
School meals, and many more.

“The procurement industry hasn’t come to a standstill” – Head of Bid Management, Daniel Hall.

On a daily basis, buyers are still looking for suppliers to support their businesses and vice versa. With this in mind, we can’t stress enough the importance of assessing your pipeline of work.

If your business operates in a sector which has struggled to find immediate work over the past few months, build your pipeline. As the UK gets back on track, it is vital that you have work lined up that keeps your business growing and your employees in a secure job.

If you’re fortunate enough to work in an industry with in-demand services due to the current climate, there are plenty of reactive contracts for you. For example, we have seen businesses thrive in industries such as;

Healthcare;
Medical supplies;
PPE;
Software;
Internet services, and many more.

We source new opportunities for these services daily via our Healthcare Tenders and Technology Tenders portals.

So, what are the advantages of tendering for work?

Now that we have established where to find contract opportunities, let’s look at a few advantages of tendering for work.

Understandably, many SMEs don’t know how to tender for work. If we’re honest, the process can seem complex on the surface. We know that tendering for contracts is a full-time job because it’s what we do.

With that being said, thousands of businesses tender for work. It’s part of their business development strategy. There must be a reason for this – let’s explore it.

Guaranteed pay (public sector)

In the public sector, suppliers benefit from guaranteed pay upon winning a contract. This is obviously a sizeable advantage to tendering for work. Unlike private buyers, public organisations are bound by their contractual agreements to pay the awarded supplier.

Going one step further, the Crown Commercial Service (CCS) must pay contractors within 60-days of invoicing to comply with the Prompt Payment Code (2008). This gives suppliers peace of mind, especially for first-time winners.

If you’re an SME under the assumption that only ‘big businesses’ stand a chance of winning a contract, consider the government’s target.

The UK government has a target to see at least £1 in £3 being spent with SMEs. This means that public sector businesses have a goal to actively award contracts to smaller businesses.

Gain experience

In order to progress and win larger contracts, you must present relevant case studies and demonstrable experience. Tendering for contracts as part of framework agreements or dynamic purchasing systems (DPS) is an effective way of building this experience. We often advise first-time tenderers to begin with these types of contracts.

For example, in the care sector, spot provider frameworks can be a great stepping stone for new businesses.

You can find spot provider frameworks on our dedicated Healthcare Tenders portal.

Make contacts

Continuing from the previous point, in order to gain experience and provide case studies, you need to make contacts. Building relationships will help you to work with more buyers and, in turn, gain valuable experience.

When tendering in the future, you will be able to demonstrate works that you have previously completed and impress buyers with your previous contract examples.

As every business owner knows, without contacts you are in danger of your business plateauing. To grow and expand your horizons, you will more than likely need to build a base of contacts who can provide opportunities for inter-trading and collaborations.

Sustainability

Winning a place on a long-term contract or framework agreement can have a significant impact on the sustainability of your business. This is one of the other main advantages of tendering. We have helped clients to secure upwards of four years of income, from one win. To any business owner, this is an attractive prospect.

Find more information and results shared by our previous clients on our testimonials page.

Take control of your delivery

Winning the contracts you want to deliver is a huge advantage to tendering for work. We’re not suggesting that you will simply have your pick and win all the contracts you tender for. However, by choosing the contracts you wish to bid for, you are effectively filtering your opportunities from the beginning.

With this in mind, it is important to note that there are a few things you should consider before choosing the contracts to bid for. We advise that you complete the following checklist before commencing any work on your tender responses.

Can you deliver the contract if you win?

This might sound obvious, but you’d be surprised at the number of businesses who don’t consider their own resources prior to bidding. Of course, in most cases, the buyer will be able to assess your capabilities based on the company information you provide. Therefore, it is unlikely that you would be awarded a contract that you can’t deliver. However, you don’t want to waste time, resources and money crafting an intricate tender response only to be eliminated from the process based on capability.

Have you checked the financial thresholds?

In order to ensure that the awarded supplier can deliver the work, buyers will often set a minimum financial threshold. This is often reported in the earlier stages of the tendering process to ensure that the potential suppliers meet the requirements before they proceed any further.

If the financial threshold isn’t outlined, there is another way of determining whether you will meet the requirements.

As a general rule of thumb, you should not bid for projects with a budget that is greater than half of your annual turnover. For example, if the buyer states that the contract budget is £150k, your business should turn over more than £300k.

Do you have experience and evidence you can provide?

In the majority of cases, buyers will ask to see at least three relevant case studies as part of your tender response. It is crucial that you have these case studies developed, branded and ready to go. This will not only save time during the process, but it will also allow you to assess whether or not the contract is right for you.

It is also worth noting, that in the public sector, it is common for buyers to ask to see three years of accounts. The accounts will likely need to display the company name that you are currently trading under.

Is the contract profitable?

It can be easy to get enthusiastic when you see a contract that you are eligible for. However, before laying the groundwork of your bid, it is crucial that you consider your profit. While the contract budget might sound appealing, assess the cost of your delivery and the resources the contract will require before moving forward.

Further support

In this blog, we have addressed a few of the main advantages to tendering for work. However, if you require further support with bidding for contracts or responding to a specific tender, please feel free to get in touch. Our team of expert consultants will be happy to provide a free consultation. During the consultation, our team will assess the needs of your business and connect you with the best service to help your business.
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About The Author

Hudson is a global provider of tendering and business development solutions. The Hudson Group is split into eight strands, allowing us to help businesses at every level. No matter the size or industry, we help companies, both nationally and internationally, to reach their full potential. Our team has decades of experience, helping companies to find and win the contracts they want to deliver. Last year alone, we secured over £300 million in direct contract wins for our clients.

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