Growth hacking is a new term to describe what SMEs have been doing since time began and that is looking for ways to grow their business quickly.
However, most SMEs ignore the biggest growth hack that exists and that is tenders.
Let’s take a look at a few facts:
- Tenders are worth €9 billion in Ireland
- Globally, tenders count for $3.1 trillion
- Across the world, one in five dollars that is spent is for a government contract
- Governments want to procure goods and services from SMEs and laws are in place that govern public procurement contracts being awarded to small to medium sized enterprises (e.g. in North America, 23% of government tenders have to be awarded to SMEs)
It’s not an exaggeration then to say that tenders are the most lucrative sales pipeline in the world.
So why are SMEs not taking advantage of this huge opportunity? In Ireland, only 10% of SMEs compete for tenders and SMEs across the world act in much the same fashion as their Irish counterparts.
SMEs don’t compete for tenders because they believe them to be bureaucratic, rigged, and too difficult to understand.
We’re not going to argue that public procurement is a perfect process, but we will say that, for the most part, government tendering works.
How can we make such a bold statement?
Firstly, believing that tenders are rigged because the same incumbents win time and time again is faulty causality. The same incumbents win all the time because they’re the only ones competing for the tender. More than 25% of tenders attract only one proposal - 10% receive none at all!
Secondly, tenders follow a standard procedure. SMEs that engage with tenders will quickly adapt to the process and find that public procurement is simpler than thought.
Thirdly, governments pay. Any entrepreneur will know that finding business is only one half of building and running a successful company. The other half is getting the customer to pay. Doing business with governments reduces many payment headaches as structures are in place to pay suppliers on time.
How then do SMEs use tenders as a sales pipeline for their business?
As mentioned, tenders follow a standard procedure and SMEs that compete successfully for public contracts set up a system too.
This process starts before tender opportunities are published and ends a step after the tender is awarded. In other words, it entails more than submitting a proposal. We hope to encourage all of you here today when we tell you that TenderScout’s clients who implement these actions increase their win rates by 70% and more.
As a first step, engage with a tender platform that you like. TenderScout invests heavily in the user experience of our site and shares a lot of additional information about tenders to equip SMEs with as much data as possible, but there are numerous tender platforms out there that list country-specific and global opportunities.
Investigate the tenders currently open, but also look at tenders that have already been awarded. The smart money makes a note of the organisations that have already procured goods and services similar to the ones their business provides and makes contact with them.
This way, SMEs have a two-pronged approach:
- They are building relationships with organisations that have shown they work with SMEs for the next time these entities need to tender
- They are competing for tenders that are currently seeking goods and services
Part of this process involves qualifying the tender opportunity to ensure that it is a worthwhile one for your SME to pursue. We share more information on TenderScout’s blog about setting up a tender qualifying process. Doing this reduces the cost of competing for tenders and immediately enhances your win rate.
Next, begin to compile a tender library. Growth hacking is also about implementing scalable processes in a business, and having a tender library on hand is something you’ll use time and time again.
A robust tender library is made up of your industry certifications, CVs, testimonials and case studies. And when we say CVs, we don’t mean cut and pasted from LinkedIn. Craft CVs of your team members that highlight how your SME’s expertise will achieve what the buyer is looking for.
Compiling a tender library will take a bit of time, but if done properly, it needs doing only once. This leaves you with time to create value propositions for each new tender you compete for.
Once the tender is awarded, ask for feedback if you haven’t won. So few SMEs do this, even though they are allowed to. The buyer will be able to share information with you of the what sets the winner apart. This information is gold dust, since you’ll be able to incorporate it into your next proposal. We don’t need to say that this isn’t information you can lay your hands on easily in the private sector.
Quite simply, and we use the word “simply” deliberately here, since tenders are less complex than people think, this is how your company can take a slice of a €9 billion opportunity pie in this country. And an even bigger slice from a worldwide tender pot that equates to 18% of global GDP.
Winning tenders means that SMEs can strengthen their sustainability, protect jobs and create new ones.
Just before we conclude, we’re going to bust three tender myths for you. My team and I are on a mission to help SMEs win more government contracts and demystifying tenders is how we do this.
I’m too small to win a tender.
We’ve had consultancies of one win tenders. Half of the tenders in Ireland are spent in tranches of €25,000 or less; these are ideal opportunities for small agencies or consultants to pursue.
The tender requirements are too high for me to meet.
We have one word - collaboration! Yes, some tenders stipulate how much turnover a company needs to compete for the opportunity. This is an easy one to get around by collaborating with other SMEs. TenderScout has recently helped a Canadian company and an Irish company compete for a tender together put out by a Welsh university.
There aren’t tenders for my company’s goods and services.
You couldn’t be more wrong. We have seen tenders for turquoise jewellery, silk ties, chandeliers, recruitment services, cleaning services, video production, digital marketing skills… the list is endless. Opportunities exist for every type of business.
Finally, few Irish SMEs would know this, but Irish companies have the highest win-rate of all countries’ SMEs for winning tenders in the EU. Our enterprises are looked on as professional, able to deliver and cost-effective.
TenderScout is on track to help SMEs win €200 million worth of government contracts in 2017.
Now that’s a #growthhack!