3 Challenges to Starting a Business to Tender
We, as tender consultants are confronted on a daily basis with all the different challenges that the average business owner faces in the tender process. There are several challenges that keep on repeating over and over again especially if you are a start-up business or you erected a company with the specific intention to respond to tenders. These challenges are:
Tender responses are evaluated according to Functionality. One condition under Functionality is always the amount of experience you or your company have in a specific industry. The experience element usually counts a number of points and these points all add up to your total score that you need to achieve in order to move on to the next phase of evaluation. If you are going to lack experience you are going to struggle to earn points. To resolve this we suggest that you respond to tenders that you as person have relevant experience in. A good example is where an IT sector person responds to tenders in the IT sector - this way you can use your own experience on your CV to earn points on Functionality.
2. Site visits
Currently the trend from Government Entities is to do site visits to ensure that the bidders are real companies. The problem with erecting a company with the sole intention to respond to tenders is that the company is not really in business and therefor there is no site that it operates from. Depending on the kind of tender that you are responding to the minimum that you need to do is to set up an office of some sort, even if it is at your house. You need to show them that you have capacity in order to earn points on Functionality and to move forward to the next phase.
3. Compulsory Governing Body registration
In South Africa there are numerous Governing Bodies that businesses and its employees and/or owners have to belong to. Three examples of such Governing Bodies are:
- National Home Builders Registration Council (NHBRC),
- The Financial Services Board (FSB) and
- The National Contract Cleaners Association.
There are many more but we will stick to these three. Many Government tenders require registration certificates showing your affiliation to a Governing Body. Failure to produce such a certificate can lead to your tender response as being judged as non-compliant and this can lead to you being disqualified.
There are two major challenges that the business owner face when registering with the appropriate Governing Body:
- Firstly the rules and regulations that the business must adhere to in order to register and
- Secondly the cost involved.
The answer would be to try and register even if it is costly. Remember that you will have to comply in any case with the rules and regulations of the Governing Body should you be so lucky to win the tender. Find out what the rules and regulations are and start to comply now and register.
Starting a business is a very hard process - starting a business specifically for the purpose to respond to tenders is even more difficult. Rather start a small business, get it up and running, get some experience under the belt, earn a bit of income and then start responding to tenders.
If you want to learn more about the tender process please visit our website for more details on our upcoming How-to-Tender workshops (www.how2tender.com) or email firstname.lastname@example.org should you need any assistance in this regard.