I am regularly asked by startups and small business owners what makes a good tender response and how a start up company should approach the tendering process. After you register with eTenders Public Procurement you can select to receive email notifications of tenders in Ireland relevant to your business. There will be plenty of tenders that you could respond to as part of your Sales & Marketing plan. I am not sure if tender submissions are an Art of a Science but they can certainly be a monumental waste of time unless you:
- Carefully select the jobs that you tender for:
In a previous blogpost I wrote about how to listen to your customers to get them to buy. Tendering is straightforward in that the potential customer tells you exactly what they want. They even tell you how they will evaluate your proposal. The key is to mark yourself against the criteria listed and if you don’t score highly, don’t submit.
- Structure your tender submission to follow their criteria:
After carefully reading the Invitation to Tender documents the criteria to be used in evaluating the tender should be clear. I would have information that I use in every tender but I always cut and paste into a layout or template tailored to meet the criteria. The person reading the tender will have to read lots of tender submissions. The volume of paper to read is huge. You need to make it as easy as possible for them to give you the marks that your tender submission deserves (here is a document that Tender Managers have to follow – it is your responsibility to make their life as easy as possible). You can not assume that they will interpret information in a particular section as being relevant to specific criteria. For this reason I think that a certain amount of repetition is acceptable. In particularly long tender documents with multiple sections a small table outlining where particular criteria are addressed can be useful for the reader.
- Focus on quality, expertise and track record:
I have mentioned ‘tender criteria’ several times. The criteria are selected to ensure that the best supplier is selected. Your submission must demonstrate a strong understanding of what is required. It must focus on your special expertise and outline your track record in delivering similar type contracts. References and testimonials are critical.
- Build a team:
One route to developing a strong team with an unbeatable track record, expertise and all round ability to deliver what is required is to work with partners that you trust. This is particularly relevant for larger contracts. Collaborating as part of a consortium on a large project can allow Irish startups to get involved in tenders for the first time particularly in international projects.
- Have correct pricing structure:
Most tender invitations include a generic clause which means that the lowest price tender may not necessarily win. This allows for selection of the best tender balancing both cost and quality. However, tender submissions may not even be considered if the tender price is not in the correct ballpark. Pricing is very much trial and error. When you are not successful in a tender, you should be able to find out what price was offered by the supplier who was awarded the tender. This will build a picture of the market. The second key point on Pricing for Tenders is to present your pricing in the format suggested in the tender invite. You must also include any and all the financial information on your company as stipulated (and other documentation to include Tax Clearance certs).
- Present a professional document:
Tendering is a competitive process. Tender invitations are becoming more complicated and tender submissions more comprehensive. It is worth spending time and effort to ensure that your document looks professional as first impressions count. The use colour and diagrams is suggested while it is very important to number the sections, spell check and proofread and make sure page numbers are correct. And don’t forget to submit on time.
In a previous job, I was centrally involved in several tender processes and developed a few tender documents. There is significant effort taken to finalise a tender invitation document. The finance units of public sector organisations have strict policies and procedures that must be followed in terms of issuing, receiving, opening, reading and evaluating tenders. With my own business, I follow the rule to only submit for tenders that I can win while for larger tenders I collaborate with other providers – as I mentioned above being part of credible consortia is a valid tendering strategy for small business.
Check out – Enterprise Ireland Guide to Public Sector Contracts in Ireland and UK (very comprehensive document) and Supports for Tendering page on Enterprise Ireland website referred to as Selling to the Public Sector in Ireland and the UK.
As always, I hope you enjoyed this post. All comments and shares welcome…
Donncha Hughes (@donnchadhh)
p.s in 2021, I published a FREE online training programme called ‘Introduction to Tendering for Small Business
Introduction to Tendering for Small Business
I would confirm, make sure you know what you are going to tender on, that you know the client as every bid costs you 2-5% of the value to bid on. that is a lot if you don’t win many. if you do not know the client you are probably comparison material to check on who they already want.
That is a very interesting figure that a tender could cost you 2-5% of the bid value. I would not disagree with it. It is a good investment of resources if the tender is successful so you really need to prioritise what you submit for, and knowing the client is a critical component of that decision.
I find that a new tender or proposal takes the most time and incurs the greatest cost. But these are also the most fun – for service businesses you have to invest in new product development. And then i try to reissue the proposal, tailored of course, to other clients. The key in that instance is limiting the time exposure while still getting to the next stage of the Sales cycle.