The government spends well over £300 million per year on public sector contracts, at least a third of which is designated for SMEs. However, not enough small businesses are taking advantage of the lucrative contract opportunities presented by the public sector.
The government is trying hard to change that and convince small businesses that the public sector is actually a friendly bidding space. The focus on value rather than price and publishing lower-value contracts are intended to draw SMEs and encourage them to at least give public procurement a fair shot.
It’s a bit of an uphill battle because many old myths about SMEs being ill-suited to public procurement still prevail. We’re going to look at why this isn’t the case and why SMEs are perfectly positioned to provide more efficient and valuable services than many larger businesses. We’ll also look at how the public sector contributes to the development of small businesses through Business to Government (B2G) procurement.
The government is pulling out all the stops to get different types of organisations (SMEs) into public sector procurement. For instance, it’s pledged one in three pounds of public sector spend to SMEs. It’s also dispelling the myth that bidding in public procurement is complicated by reworking and simplifying the process and publishing low-value tenders that don’t have complex requirements.
Multiple external platforms pull together all the government contracts making it easy to filter opportunities by area, contract type, and CPV code. SMEs will benefit from Supply2Gov’s contracts finder. However, Tracker Intelligence might be the best tool for you, if you’re looking for a more extensive platform.
SMEs will benefit from Supply2Gov’s contracts finder. However, Tracker Intelligence might be the best tool for you, if you’re looking for a more extensive platform.
Leading the horse to water
As it turns out, the government has led SMEs to water, but they’re waiting for the businesses to take their first sip. Given that 75% of SMEs avoid public procurement, it might be a long wait.
The good news is that more and more SMEs are taking a good, long drink and busting the myths surrounding public sector contacts themselves.
For instance …
SMEs that bid in the public sector set themselves up to fail
The first foray into something new is always going to be challenging because you don’t have any experience and don’t know what to expect. However, some research into what is required, especially compliance-wise, and paying careful attention to the buyer’s instructions will stand you in good stead no matter what the project.
Each bid, regardless of the result, is a lesson that will teach you more efficient and effective ways to prepare a contract. And each lesson brings you closer to the ultimate prize.
The public sector isn’t as lucrative as the private sector
This couldn’t be more wrong. Government tenders are competitively priced, but the most important thing is that buyers must pay within 30 days. The law says so. That means no long waits, delays, partial payments, and assorted excuses.
Prompt payment ensures you always have ready cash for essential expenses. It also enables you to invest in research and development, so you can enhance your operations and offer even more value to public buyers.
This helps you win more tenders and the whole (profitable) cycle begins again.
Only the lowest price wins
That may have been true in the past but now contracting authorities are more interested in overall value. Rather than MAT, buyers are interested in MEAT.
It just means that instead of the Most Advantageous Tender is being sidelined in favour of the Most Economically Advantageous Tender. So, it’s the whole picture: cost-effectiveness, time-saving, energy-consumption, quality products, ethical supply chain, and the new biggie, social value.
If your small business is more MEAT than MAT, you could trump some larger enterprises competing for the same bid.
SMEs don’t have anything of value to offer
The exact opposite is true.
For a start, SMEs drive the UK’s economy. According to the Federation of Small Businesses, nearly 100% of all businesses in the UK are SMEs. They generate a turnover of £1.8 trillion! And, they lead the way in job creation with 16.8 million employees.
There are other benefits over larger businesses. For example, SMEs bidding for public sector construction contracts have the flexibility to adapt to changing circumstances, after all, a bicycle responds far more quickly than a tractor.
Furthermore, SMEs tend to operate in or around their local communities, which means there are virtually no travel costs nor carbon emissions generated by long commutes, especially large lorries delivering material and earth-moving equipment.
The result: Smaller carbon footprints and a few steps closer to net zero.
Some aspects of social value are also inherent in small businesses. For example, they employ locals. They might also provide job shadowing opportunities and apprenticeships, and support some local charities by regular donations of goods and staff volunteers.
All in all, that’s an awful lot of value.
The cart before the horse
So, SMEs have a lot to offer public sector buyers. They just must be proactive and want to win contracts to get in the game, right?
It’s still up to small business enterprises to draw attention and that requires a spot of marketing. However, there’s a bit of a difference between SME and public sector marketing. We’re going to give you some tips to get it right.
Early engagement is like a meet-and-greet with various buyers in your area of expertise. It takes many forms, for example, introduction emails and attending industry events, like seminars and expos. You don’t want to be overly salesy, but you still need to punt your business’s USPs. A public procurement marketing agency can help you strike the proper balance so you leave buyers wanting more rather than wanting to escape.
LinkedIn is probably the best social media site for B2G marketing. You can use paid ads, follow key stakeholders and decision-makers, comment on their posts, and publish posts of your own.
Some heads of departments and public sector procurement managers also have Twitter accounts, but LinkedIn is still your best bet social media-wise.
Website and content marketing
Any business, in any sector, is at a serious disadvantage if they don’t have a website. That’s where people go to find out about your services, your mission, and your success stories. If you don’t give them that information, they will go away and they won’t come back. You have one shot to pique their interest, so you need a website that is eye-catching, user-friendly and has content that is a combination of images, videos, and text to tell your story and generate leads.
Content is incredibly important, but creating attention-worthy content is not easy to do. You need to strike the right tone, use a voice that truly represents your brand (formal, infotainment, etc.), incorporate SEO, and be appropriate for your targeted audience.
Myth Busting For Tender Success
We set out to explore the myths that prevent SMEs from bidding on public sector contracts. Not only did we explore them, but we also busted them and demonstrated that no matter what size your business, public procurement is accessible – and profitable.
We had a look at some marketing tips to support and promote your business and stand out in the crowd. By now it should be clear that nothing is holding SMEs back from public sector tenders. Regardless of how many people contract to the public sector, all it takes is a little effort, focus, and research, for SMEs to compete successfully with larger business enterprises.
However, it’s easy to talk about a little focus when you don’t have to spread yourself thin, preparing proposals and attending to your website and social media. You can relieve a lot of that pressure by engaging a digital marketing agency that specialises in B2G procurement.
Cadence Marketing provides several essential marketing services, including market research and end-to-end webinar planning, production, and post-analysis. Book a free consultation with one of our experts and see how our support can help you win lucrative tenders.