So you've seen a tender opportunity that looks like it might be a good fit for your business. 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 for you:
If you win the bid, you will be bound by the conditions of the contract for the term of the contract. This is usually a good thing - but make sure you've read the 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 for your business.
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 travels potentially hundreds of kilometres a day to perform work then maybe this isn't a good fir for you.
Many businesses won't go through the tender process unless the potential contract value is worth pursuing. But sometimes it's worth chasing a contract that has a lower total value than you would normally bid for - for example, if the tender has been issued for a sector that you've been trying to gain experience in so you can use this for future, larger tenders.
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. If you're just stating out, you might want to leave it a year or two before you start 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 experience that they've had on similar projects, and how may years they've been doing what they do.
- Clearly demonstrate your understanding of the tender conditions and what it's going to take to deliver on them. For example, if you're a security service provider, include detailed information showing how services will be delivered. If you're in the food service business, you might want to show how well you understand food safety requirements.
- Establishing financial stability when you're a relatively new business isn't easy but financial projections showing actual versus budget for the period you've been in business are a good place to start. You can also add evidence of your bank accounts, line of credit or bank guarantees if you have them.
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 will be able to cope with the extra workload.
Still not Sure? Give me a Shout
If you have a tender opportunity but your just not sure if it's right for you, or if you have one that you need a hand with, shoot me an email or call me on 0400 514579. An initial discussion costs you nothing so what have you got to lose?
In the meantime, happy tendering!