Have you ever wondered why some trades businesses get the big contracts with local authorities, schools, house builders, retail or hotel chains etc?
Whether it’s planned and preventative maintenance of electrics or plumbing, painting and decorating or landscaping, these big contracts can make a huge difference to your cash flow and bank balance. When it comes to bringing in more profit and having a steady stream of work, they can go a long way to helping stabilise your income.
So, why isn’t every trades business chasing these bigger jobs? The truth is, they rarely land in your lap without a bit of work on your part.
When we asked our network of plumbers, electricians and builders what’s stopping them going for the meaty contracts, these same six reasons kept raising their head. To be honest, none of them need stop you if you want to go for it and transform your business!
Your services are in demand – you just need to work at winning the right kind of business.
This is why we’ve put together our guide to overcoming the six common hurdles to winning big contracts.
1. You’ve never been through a tender process before and don’t know where to start
The number one reason for not going for potentially lucrative contracts is – the tender process. What most of these contracts have in common is, you have to fill in a bit of paperwork and jump through a few hoops to win them. For bigger companies with admin or sales staff who are a dab hand at putting the required information together, that’s no problem. For someone who’s never entered into a tendering process before, however, it can be pretty daunting.
But, you’ll never get anywhere unless you dip your toe in the water and have a go!
Have a gander!
Download a few tender application forms and familiarise yourself with the common questions they ask, the criteria they set and the information they ask for. Many follow a similar pattern so, once you’ve gathered the information for one, it’s then not a massive stretch to apply for more.
What are you lacking?
Once you’ve read through a few, make a note of any issues you think you’ll face. Do you have the skills, tools and manpower you need to fulfil the contract? Are they asking for accounts information you don’t have readily available? Are there any certificates or accreditations they require that you haven’t got? We’ll look at overcoming all of these in a minute! But it pays to know what you think you’re lacking so you have an idea of what you need to improve.
Take a course
Like your trades skills, you have to train to achieve a standard. There are lots of online courses that don’t cost the earth that will take you through the tendering process step by step. Putting in a bit of time and effort to find out what the procurement team will be looking for, and how to make yourself stand out, will give you greater confidence in completing a tender and the best chance of success.
Here’s a couple of tendering training course providers you could look at:
There are plenty of others out there – we suggest you do your own research and find one that suit you.
2. You don’t know where to look for opportunities
Before you can apply, you need to find these potential jobs. If you google ‘Find Tender Opportunities’ you’ll probably get a list of sponsored ads for paid-for services, offering to send you daily tender opportunities straight to your inbox.
Yes, it might save you time, but you can find tender opportunities for free. When you’re just starting out, this is the route we suggest you take.
Public sector tenders have to be advertised in a way that allows any company to find them.
This is a fairly easy and free way to check for high-value public sector tenders (OJEU tenders) advertised in the Official Journal of the European Union and online at Tenders Electronic Daily (TED):
For lower value public sector tenders, this UK government portal was set up to help small and medium sized businesses win public sector contacts. It now also has some high-value tender opportunities.
Contracts Finder: www.gov.uk/contracts-finder
If you did want to invest in a service that finds relevant opportunities for you, these are some of the service providers you can take a look at:
There is a collaborative solution to paying for such services. If you have a network of contacts within your industry, it might be worth considering signing up to a service you can all benefit from and sharing the cost between you.
3. You’re just a small company – how can you compete with the big boys?
This is something that stops many smaller concerns even filling in the tender application. But that could work in your favour.
The government is committed to supporting the growth of SMEs, particularly in the construction sector. In fact, it pledged to award 33% of public sector contracts by value to SMEs by 2020.
They recognise they can receive better value for money by awarding contracts to smaller businesses and by doing so are also supporting local economies. This means those smaller businesses who do step up and have a go are more likely to be in the running.
This should give you confidence that your tender will be considered on its merits, on how well you can fulfil the job brief, rather than on how big or small your company is.
4. You haven’t got the required credentials
It’s true that there are certain requirements you will need to meet to be considered. These generally mean you have to demonstrate you meet industry standards by holding certificates and accreditations. This is the most reliable way for employing organisations to know that you, as a company:
- can work safely on a project
- have trained and competent staff
- have a quality management system in place
- work in an environmentally friendly way
It will be an issue if you don’t yet possess the required credentials.
The only way to address this is to research which accreditations you need and commit to achieving them. It will be time well invested, however, as this will generally open you up to a wider pool of opportunities.
This needn’t stop you beginning the tendering process, however. If you can show you are working towards achieving an accreditation and have an estimated date to become certified, this may well be enough to secure a project. It’s all in how you phrase it.
Convert areas of weaknesses into areas of strength.
For example, ‘We will deliver to the standard’s criteria and achieve accreditation within 6 months’ will be looked upon favourably, whereas ‘we don’t currently hold the standard’ will probably see you heading to the discard pile.
Some useful links to find certificates, accreditations and memberships you might need, depending on your area of expertise and the projects applied for, are:
- Safe Contractor
- British Safety Council
- Gas Safe Register
- Cyber Essentials
5. You don’t have the manpower to fulfil bigger contracts
If you are a small team, this doesn’t mean you can’t consider creating a bigger project team to fulfil a lucrative contract.
There are a number of ways you could do this.
- Build a bigger team of employees on a full time or project-based basis
- Bring in contract workers as and when needed
- Join forces with another small company and create a partnership for the purposes of fulfilling bigger contracts.
You will need to work out which avenue works best for you and your business. We’ve put together a short video on how to decide between employing staff or bringing in contract workers here.
Your accountant can go into this in more depth with you, taking into consideration your current and projected finances.
6. You need cash to invest in making this all possible
There has never been a better time to access investment cash for your business. Although COVID-19 has caused major disruption in our working lives, it has also opened up borrowing and other opportunities. Loans, tax relief and cash grants are available for small businesses and can offer that investment cash you need to reach for bigger and better contracts in your business. It suddenly makes all of the above possible.
If you’re unsure what you are entitled to, how to access the help available, or what you can invest in that will be most effective, your accountant should be on-hand to help with all of this.
Building your business and becoming ‘tender-ready’ to enable you to go for bigger and better contracts is something your accountant should be helping you with.
At Get Smart Accountants we work with our clients to drive growth and help them achieve their dreams.
If you’d like some advice or support to get your business moving in the right direction, then we’d love to hear from you.
Call Emma or Paul on 01902 212937