Tens of billions of dollars’ worth of contracts are published by the private and public sectors every year. This provides a massive income potential for businesses, even if you operate in a small or medium-sized company.
Five reasons why your business should be bidding for work.
Tenders offer a huge opportunity to secure a steady stream of income. One large contract could potentially supply most of your business’s revenue and mitigate the need to further advertise for a particular part of your product or service. Also, if you win a tender from a public sector client, the risk of them defaulting on payment is very low.
With tendering, you really can grow big by starting small. Many contracts are long-term, up to a number of years. You can use the experience you gain in the course of responding to a tender to demonstrate your expertise and reliability when you move on to bid for a larger contract.
Build your reputation
In the process of fulfilling a contract, you will establish and start building relationships with key buyers and contacts in the industry. One successfully completed contract can lead to many more. Even if you don’t win a bid, your tender submission will show a potential buyer exactly what your business can offer.
Gather insights on buyer demands
When tendering for contracts, you get an insight into what buyers require and how they are spending their budgets. This will allow you to evaluate and align your business offerings to meet the demands of the market and the customers you are supplying to.
The government wants your business
In December 2020, the Australian government updated its Commonwealth Procurement Rules to make it easier for small and medium businesses to participate in the government procurement market. The government said the changes would “cut red tape, reduce costs and provide quicker payment times”.
For its 2021-22 budget, the Australian government announced it will be spending $2.6 million over four years to help small and medium-sized businesses access Commonwealth procurement.
Moreover, large businesses that are awarded Commonwealth contracts over $4 million must now pay their supplier contracts (of up to $1 million) within 20 calendar days, or face interest penalties.
The federal Minister for Employment Stuart Robert said that the government recognised how vital cash flow is for small businesses and knew that late payments can be damaging.
“We know when small businesses have confidence they’ll be paid on time there are wider economic benefits helping businesses to grow, invest and employ more Australians,” he said.