If you’re an SME wanting to learn how to sell to the UK government, there are few better people to ask than John Fernau. John was the head of procurement for the London Olympics before running procurement for the Home Office. He has now moved to the private sector where his company, Fernau Solutions, offers assistance and support to sell to government.
On Thursday 8th of September, John spoke at a breakfast event organised by Open Opps on Winning Government Business. John provided excellent practical advice on how to trade with government. Here are 10 things that every business should do when selling into the public sector:
Look into which branches of government you think would be most likely to buy your product. This extends beyond central government to local government, NHS, museums, educational institutions devolved government and arm’s length bodies. Different government bodies purchase a vast range of products, from ICT to bird training, so exploring these different departments could expose an unexpected opportunity for your business.
Spend Network is an excellent resource for investigating public sector buyers. It can help you find high spenders in your sector, which organisations are spending with your rivals and how much they are paying, and where costs are rising in your category.
Open Opps research can also help you find buyers with contracts coming to an end and opportunities for subcontracting. Narrow your focus to a few potential buyers, so that you can adopt a strong strategic focus which is much more likely to be effective than a scattergun approach.
2. Research your targets
Once you’ve honed down your targets, conduct a second phase of research so that you can understand their precise needs. Read policy papers from your potential buyer to make sure you have a good handle on their needs and how they operate before getting in touch. Public sector buyers publish lots of information on business priorities, so make sure you are familiar with this. Buyers can become impatient when potential suppliers are ignorant of information that they could have discovered with a little dedicated research, so make sure you make a good impression by doing your homework.
3. Market to your targets
Find a way to make contact with your target buyer before bidding for a tender. Meet the buyer events and other opportunities for networking are great opportunities to get in front of a potential client and present your offering to them. Never ‘bid blind’, it is your job to make sure the buyer knows you and why you can help them before you submit a bid.
Be relevant to each specific buyer, it’s not good saying “I can save you 20%”, any pitch you make has to be conditioned to the buyer’s needs for it to register, for example:
“You spent £1.4m on home to school transport last year, a 12% increase on the year before, our ride management tools can help you reduce those costs by over 20% and give you better management information. We’re already working with 4 other councils in the area, can I book a time to call or meet you to go through our services with you?”
Spend Network is a great place to identify spending on key categories and to find details about your incumbents.
4. Be bid ready
After all the hard work you’ve put in identifying targets and forging links with potential buyers, the last thing you want is to be caught off-guard when the perfect tender is advertised. You need to be ready to bid for it before the tender is released, which means you must satisfy the requirements for government suppliers, for example you should have policies on risk, equality, health and safety ready before you tender. You’ll also need to make sure that you are up to date on your accounts to reassure government buyers that you are a safe pair of hands, even if you are smaller or less well known than some of your rivals.
There are lots of things to consider in order to be bid ready, so we’ll cover this in more detail in a future blog post.
5. Make friends (thresholds are not a deal breaker)
Government tenders may include threshold requirements that are difficult for a small company to meet, for example a new startup company might not be able to produce five years of accounts. If your company cannot meet threshold requirements to bid for certain contracts, consider collaborating with other suppliers to meet these thresholds, benefiting for each other’s strengths. If you believe that the thresholds in a tender are unfair, you could consider challenging them through the government’s Mystery Shopper service (https://www.gov.uk/government/publications/mystery-shopper-scope-and-remit).
6. Play to your strengths
Being an SME or a local business can be a great strength when bidding for a government contract, provided you make the most of the advantages the nature of your business provides to buyers. The Social Value Act means that buyers will consider the impact to their area when awarding contracts. As a small business providing jobs to your local economy, you have a distinct advantage over other companies based further afield who cannot demonstrate the same value to the local area. Central government has a target to spend 33% with SMEs by 2020. This means your status as a small supplier can make you appealing to a government supplier, particularly in frameworks like G-Cloud (https://www.digitalmarketplace.service.gov.uk/g-cloud).
7. Be disciplined
When writing your bid, be careful to answer all questions as comprehensively as necessary. Judge the amount of effort needed for each question, for example by looking at scoring matrices, and devote most time to the most important points. There will be a deadline in the tender schedule for you ask the buyer questions, so make sure you have thoroughly reviewed the tender by this point and submit all your questions before this point.
Sometimes different parts of a bid will be scored by different people with no reference to the whole document so avoid cross-referencing your answers as this can mean that you are not providing the necessary information to gain marks.
8. Bid to win, deliver to margin
You should always bid to win, so make sure you put your lowest effective price into a bid. If you add additional services and raise your prices then you may find yourself being beaten at the tender stage. Once the contract is signed, a buyer can adjust the requirements to increase the value of the contract by up to 10% before having to re-tender. This means that there is some post-contract flexibility in the scope of the work, so you must first win the contract and then you can work with your customer to sell in additional services.
9. If you win, behave well
Deliver, deliver, deliver - this will cement your reputation as a supplier, help you to win more government business and, crucially, ensure the public gets the best possible services. Don’t fall into the trap of tightening timescales at your client’s behest and then not delivering. Be open and upfront about what you are going to deliver by making it clear what would constitute a change in deliverables or contract terms as soon as you take on the project. This ensures you meet client expectations and prevents the project getting out of control, with constant changes.
10. If you lose, behave well
It’s frustrating and demoralising when, after all the work you’ve put in cultivating targets, finding the perfect opportunity and creating the best possible bid doesn’t pay off. Despite this, the best thing to do is to remain polite and ask for feedback, reinforcing the good impression you have been making up to this point. Debriefs are golden, they allow you to understand where you need to improve and how to win in future.