What tendering for government projects can do for your business

Government tenders can be large, complex and intimidating. Why would you put yourself and your business through the trials and tribulations of getting prepared and then investing all that time and energy into developing and lodging tenders, especially when there is no guarantee of success? The obvious answer is the extra revenue on offer, but there are other factors to consider. Here are just a few:

Stability:

Government contracts are typically of three years duration, with the possibility of another two years via extensions. This translates into a five-year revenue stream if you are successful in your tender. What could you do in terms of building your business if you were confident that your revenue streams, or part of your revenue stream, would be relatively stable over the next three to five years? No doubt, you could plan more confidently and effectively for equipment purchases, hiring new staff, skills development or investing in new buildings or computer systems.

Enhanced saleability:

Secure contracts can add substantial value to your business if you want to sell at some future time. Any savvy purchaser knows they are really paying for established systems and potential revenue streams. Holding a number of government contracts for the next three to five years clearly demonstrates these revenues streams are in place. As a result, potential buyers will have more confidence in your business and the likelihood that they will recoup their investment within a reasonable timeframe.

 Business improvement:

Tendering can also improve your business processes. By their exacting nature, government tenders will encourage you to think very deeply and clearly about your business and take action in areas such as policies and procedures, your service delivery methodologies, risk management strategies and project management systems, to name a few. This final benefit is not always foremost in the minds of companies when they embark on their tendering journey, but a number of clients have said that even if they do not win any tenders their business improved simply by their having to think about and document their business processes.

Here are just a few of the unexpected improvements clients have reported:

  • Using the new tendering resources to bid for work with private sector clients; o Identifying opportunities for improving their products, services or processes;
  • They gained a greater appreciation of what they had already accomplished;
  • They realised where they had got complacent or had glossed over important aspects of their business;

They developed a deeper insight into the complex government market. Nobody can deny that bidding for government tenders is demanding, especially when you are establishing your systems. However, if you are able to persevere, the results will come, sometimes in unexpected ways.