If getting a business up and running is no easy feat, expanding it can be just as (or even more) challenging. However, it’s certainly a much better option than falling into complacency. Once a business is set and starts bringing in a profit, many business owners tend to relax and get stuck in a comfort zone. But when a company stops evolving and improving, it risks missing important opportunities, losing its competitive edge, and falling behind other players in the market, which will ultimately affect its bottom line.
Therefore, continuous growth and expansion are a necessity in the business world. Obviously, there are different strategies that companies can employ to ensure ongoing development and increase their revenue. More often than not, the phrase business expansion will have one think about opening new branches, forming strategic partnerships with other enterprises, or establishing operations in other geographic regions.
However, it’s also possible for a company, big or small, to expand by stepping into the public sector and securing government contracts. So, if you’re interested in following this path to business expansion, this article is for you.
How securing government contracts can support business expansion
Government contracts can prove extremely effective in unlocking unique growth opportunities that will allow you to take your company to the next level. For starters, securing contracts in the public sector can facilitate market expansion. Many businesses these days struggle to acquire new customers and retain existing ones, and find it difficult to connect to a wider audience. Pursuing public sector contracts gives you the opportunity to find new buyers, penetrate new markets, and bring your products/services in front of diverse audiences that would otherwise be out of reach.
The UK Government allocates approximately £300 billion every year to public procurement. Even in a dwindling economy, there is still a lot of money circulating into the public sector and therefore a lot of money to be made for companies that manage to win government contracts and forge solid relationships in this market. With most public contracts extending for long periods of time, your company will benefit from a steady source of revenue from the most reliable purchaser. The fact that public bodies are required by law to settle all invoices within 30 days of receiving them provides further reassurance of timely payments, so you can rely on this stable source of long-term income to fund your business expansion.
Securing public contracts can also help you improve your credibility and create a positive image for your company. Firms that do business with the public sector are seen as reliable and trustworthy due to the strict requirements and rigorous vetting process they undergo to win these contracts. Building a reputation as a trusted government contractor will bring in more customers and open the door to new business opportunities. This can make a huge difference if you’re operating in a crowded market where you need to battle numerous other companies to win customers’ attention.
Lastly, the public sector can provide you with a networking venue where you can interact with businesses and people from all industries and domains of activity. You can develop positive relationships that could come in handy as you work to expand your company.
Differences between public and private sector procurement
As expected, things are done differently in the public and private sectors, which means securing contracts also presents noticeable differences. So, before you start looking for contract opportunities in the public sector, you need to know what the process implies.
Just like privately-owned companies, the organisations, institutions, and agencies owned and operated by the UK Government, such as state departments, local authorities, and public service providers also need to purchase goods and services from various suppliers, but they take a different course to procurement.
For public entities, the first step is to make contracts public by putting forward an invitation to tender (ITT), a request for proposal (RFP), a request for information (RFI), or a request for quotation (RFQ). This gives all interested parties the opportunity to submit an offer and compete in a transparent and fair bidding process. Private companies, on the other hand, are under no obligation to disclose their contracts publicly and usually grant them via private negotiations.
Another aspect that sets the two sectors apart is the use of technology for procurement purposes which is widespread in the public sector. Government organisations make use of tech solutions to manage the entire tendering process, while companies looking to secure contracts often resort to automated software tools to streamline their search for public sector tenders and get timely notifications about new contract opportunities.
It’s also important to point out the regulatory differences, as they play a key role in procurement procedures. Unlike the private sector where there are fewer rules and regulations relating to the award of contracts, giving companies greater freedom and flexibility in managing their processes, tendering in the public sector is highly regulated and participants have to comply with a strict set of rules and legal requirements in order to ensure the contracts are awarded fairly and funds are spent in an equitable manner. In the UK, all entities involved in public procurement have to comply with the requirements specified in the Public Contracts Regulations 2015.
Tips for navigating the world of public tenders
The public sector in the UK puts out over 50,000 contracts every year, which means there is a wealth of options and opportunities available for companies of all sizes and in all industries to take advantage of. Obviously, not all of them will be a right fit for you, so you will have to sort through the options in search of tenders that align with your requirements. Here are some tips that can prove helpful in this respect:
- Do your due diligence and familiarize yourself with the tendering process
- Take advantage of tender services to save time and effort and find contracts that are relevant to your company
- Make sure you understand the rules and regulations that govern public sector tendering
- Examine the terms and conditions outlined in the contracts before submitting an offer
- Write a compelling bid
- Follow tender requirements as instructed
Reading a more detailed guide to public sector contracts can provide further insights into public procurement and help you gain a more solid understanding of what the tendering process involves.
Your business expansion awaits
Tapping into public procurement offers firms ample opportunities that can fuel their expansion and ensure their long-term success. Given the advantages it provides, the time and effort required to learn the ropes and become familiarized with the ins and outs of public sector tendering are definitely worth it if you aim to expand your company.
Interesting Related Article: “Futures and Perpetual Swaps Contracts“