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Business is quiet – should we think about tendering?

14 Nov Business is quiet – should we think about tendering?

Posted at 11:30h in Tenders by
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If your trade business is starting to get quiet, you might want to consider the readiness of your business to start tendering for work.

Winning a tender can make a huge difference to a business. It can give you:

  • Regular, consistent work that pays in line with agreed contract conditions
  • Seriously improve your income and the predictability of your cashflow
  • Opportunities to employ new staff with confidence
  • Opportunities to invest in new equipment with confidence
  • Attract other clients and build your reputation.

But should you be tendering? It all depends on what you are tendering for and what kind of business you are. As a rule of thumb, if you are a small player in a concentrated market like Sydney and Melbourne, you might find it difficult to win due to the competition – unless you already have great project reference examples, specialised skills or existing relationships with clients and councils.

If you are a regional business and one of only a handful in your area of expertise, your chances can be high. Local councils want to include you in their supply chain as part of their local sourcing policies instead of contractor from outside of the area. But you need to be able to provide a compliant tender response so they can award it to you.

It also depends on whether the contract is being awarded to a single supplier or a panel – which basically means a number of pre-qualified suppliers who then may quote competitively on work on an ongoing basis.

  1. Information you need to tender

There are a number of things clients generally want to see you have in place – but every tender is different so you need to respond based on what they are asking you for and what they tell you is important to them.

Some of the common information areas, which you can start collecting to prepare for tendering:

  • Company information – collect your full company name, ABN, ACN and any information about parent companies or trusts. You also sometimes need to provide copies of the last three financial accounts.
  • Experience – how many years have you been in business, who are some of the key customers you work for and some short case studies on work you have completed. Are there other ways you stand out in the industry e.g. awards or members of associations.
  • Insurance documents – public liability, professional indemnity, workers’ compensation and sometimes others like motor vehicle insurance.
  • How you will manage the project – the methodology should be customised for each tender based on the risks and requirements on the job, and what the customer requires. As part of this you should also make sure you have a full list of the equipment you have available to do the work.
  • Systems – what IT systems do you use to run your business and how does it help you to deliver your work, is there a customer portal available and what kind of reporting will be available to the customer.
  • Staff qualifications and licenses – most tenders don’t ask for full staff CVs but they might ask for a cut down ‘CV profile’. Make sure as a minimum you have your training register up to date and all copies of licenses readily available.
  • Health and safety information – at a minimum this should include a health and safety policy showing your commitment to following regulations and prioritising safety, but if it is high risk work you should have your SWMS ready and use the SWMS most applicable for the scope of work you are tendering.
  • Environment – make sure you have an environmental commitment statement. Also consider the environmental risks in the work you do: will there be any run off where you should use gutter socks? Do you use any electric equipment to reduce carbon emissions? Do you reduce kilometres travelled through careful fleet planning?

I’ve put together the following free tools to help:

  • Get Ready to Tender guide and a
  • Tender template for TradieWives that will help you get started.

Download them here

You can also join my Get started with tendering challenge, where each week I will send you new sections of your tendering library to complete and guidelines on how to work through it. Within 4 weeks you have built your tendering library.

My website www.tenderadvice.com also has sample answers and draft templates you can use – if you don’t find what you are looking for, let me know and I can create it for you.

  1. Where you can find tender opportunities

Each state has a free directory of government tenders where you can subscribe to find out about opportunities:

You should also register for tender notifications on your local council website or neighbouring councils.

There are a number of subscription services you can pay for that will send you tender notifications based on specified criteria (like Helping your business win big. – Australian Tenders, illion TenderLink | Join Australasia’s largest tender marketplace,  Tender Notification | Tendering | TenderSearch), but before you spend money on these try the free ones – all government opportunities should be registered on the free directories above.

If you want to tender as a subcontractor for the large construction companies, you usually need to be registered as a supplier with them. This involves completing a supplier questionnaire on their portal and keeping the information regularly updated (like licenses and insurance certificates).

These large construction companies are required to demonstrate how they support small businesses on government construction projects.

Some supplier registration sites:

  1. Present your business in the best light

Remember a tender is a sales document so you want to present your business professionally. Some tender responses don’t allow you to add logos or graphics and you need to stick to their template, but you can always make sure your attachments look good and are on brand.

Tips for professional presentation in a tender:

  • If you need to, get a new logo
  • Find out what your brand colours are (RGB/HEX numbers) so you can make sure this is consistently used in headings throughout your documents
  • Take photos of your team in their uniforms standing in front of a common background (iphone headshots are great quality)
  • Take photos of your equipment and branded vehicles
  • Start taking before and after photos on your jobs that you can use in your case studies
  1. How can you win?

Have a think about how you can win the tender before you jump in and start working on it. Ask yourself these questions:

  • Are you able to meet all the requirements?
  • Do you have strong examples and referees you can use where you have delivered a similar project?
  • Do you have an existing relationship with the client?
  • Will you be able to price this work competitively?
  • Can you put forward a stronger offer if you bring in a subcontractor or partner?
  • Can you demonstrate established systems for health and safety, quality and environment?

If you are confident in your responses to at least some of these questions, you should be in a strong position to provide a tender.  

  1. Are there drawbacks to tendering?

Yes there can be.

Firstly, tenders can take a lot of time and effort to complete. Many businesses find themselves working on tenders out of hours and on weekends, so you want to make sure you are tendering for opportunities that are right for your business and you have a chance to win.

Tenders are also usually price competitive and you need to recognise that sometimes you will need to lower your profit in order to gain stability of work. But the repeatability on a contract often means you can find efficiencies along the way.

When it comes to pricing you need to consider the following:

  1. Price is often a deciding factor and it might take a few tenders before you understand what kind of pricing you need to present to win (though sometimes your response can be so good it doesn’t matter as much)
  2. Tendering will often require fixing of prices and you have to make sure the terms and conditions allow you to increase your prices if external factors like cost of materials or fuel rise.

Tender requirements also require regular reporting and have other administrative requirements so make sure this is taken into account when you set your pricing.

 

Happy tendering!

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