Despite central Government spending over £12billion with SMEs last year, many companies still find public procurement confusing and frequently too complicated. Elizabeth Vega, pictured above, explains what SMEs need to do to make the most of the opportunity to do business with government in 2018.
A Brexit-shaped cloud of uncertainty may hang over our economy, but Britain remains an extremely attractive place to do business. Indeed, it recently topped Forbes’ annual survey of the Best Countries for Business.
Government is working hard to embrace change and maximise the many benefits they get from doing business with SMEs. Ministers, policy makers and progressive procurement leaders are working together to simplify buying processes and contracts to make a more dynamic marketplace, where government and the public sector can do better business with SMEs.
Naturally then, you’d expect SMEs to be queuing up to compete for this new business! But sadly, this is not the case. A 2017 report by the Federation of Small Businesses found that the number of SMEs that had expressed an interest in competing for public sector contracts in the last year has fallen by 10 per cent.
There are many reasons for this. Some of these reasons are historic. For example, many SMEs feel the procurement process is not a positive experience, is too complicated and the cost of bidding is disproportionate to the value of the business being awarded. As a member of Cabinet Office’s SME Advisory Panel, another reason that I frequently hear from SMEs is lost confidence based on earlier experiences of government and public sector procurement practices. SMEs don’t believe it’s a level playing field and refer to government’s own often quoted ‘risk aversion’, which prevents SMEs from competing fairly for government business against the large incumbents.
As Chair of the Meet the Buyer group for the SME Advisory Panel, I can assure you that government has been hearing SME feedback loud and clear and that Crown Commercial Services has taken this very seriously. Government is working closely with the SME Advisory Panel and has appointed SME champions in every major government department and agency. They are working hard to join up, streamline and improve procurement practices so they are fairer and more accessible to SMEs.
As the founder of an SME that has been doing business successfully with UK government for more than 20 years, we are now exporting and winning awards for the intellectual assets that we’ve created through government contracts. I want to encourage other SMEs to be bolder and more aspirational. A rising tide can lift all ships though Brexit.
Here are my top ten tips to ensure SMEs re-calibrate their expectations about doing business with government and ready themselves to get a fair share of public sector business.
- Expect to come up against a certain amount of bureaucracy and prepare to manage it
Government is accountable for how it spends public monies, so it operates within a strict policy, political and legislative compliance framework. This can be frustrating, but I would suggest you prioritise careful listening instead of jumping headlong into an eager sales pitch or defensiveness. Embrace learning because the government market is not only vast, it’s also very diverse and segmented. On the other side of those learnings are big opportunities.
- Target government buyers that most closely resemble your current customers
Put in the work to get to know your buyer really well. That means attending ‘meet the buyer’ events, industry conferences where your buyers may be presenting and sign up to any relevant webinars. Ask questions and do your homework. Research spend levels, categories of spend and find out who the biggest buyers are in your spend category. What government buyers have a reputation for being good to work with? What government departments and agencies have a reputation for constructive supplier engagement and provide helpful, thoughtful feedback that enables you to learn and improve?
- Know exactly what the government buyer wants
Develop a clear and specific understanding of what your government buyer wants. Get yourself properly connected into the government’s supplier ecosystem. Sign up to government and public sector procurement channels such as ContractsFinder. Join industry associations and leverage their knowledge, contacts and networks. Don’t assume you know what a government buyer wants from seeing just the functional or technical need, which is only a small part of the procurement picture.
- Make sure your proposal is closely aligned to the buyer’s specific needs and preferences
Leave your generic marketing literature and sales pitch on the shelf because government buyers are supported by professional and experienced procurement teams that have seen and heard it all before. Make sure you properly define relevant areas where you can add further value within your proposal, as this will be more attractive to your buyer. Echo the language of the buyer over your own, to demonstrate an understanding of their needs and empathy with buyer preferences.
- Be easy to work with
Ensure your staff have good interpersonal and relationship management skills, not just technical/product specialisms. You may need to tailor your business process or delivery approach to better serve government buyers but never make these your buyer’s problem. Always deliver on your promises and don’t make excuses because whilst government manages a huge number of suppliers, they particularly notice the great ones that stand out. This may sound obvious, but it’s frightening how many people overlook this essential ingredient for success.
- Use feedback to improve, whether you win or lose
Developing these processes into a sophisticated bid-winning formula will take time and you should always use feedback to improve; whether you win or lose.
- Emphasise your individuality
Emphasise your key differentiators and product/service features as they relate to delivering superior benefits, solving the buyer’s problem and meeting their needs. Play to your strengths and make sure you stand out.
- Invest in building your business skills and capacity
This is especially important if you want to win government business that isn’t purely commodity based, or if you wish to scale-up your business or export.
That means going on business management courses run by universities, the Institute of Directors, leading industry associations, your local Business Growth Hub or Chamber of Commerce. It also means learning to constructively engage with buyers commercially and contractually; building up professional bid management and bid writing capabilities; securing the appropriate industry accreditations; and investing in digital and IT systems (front line and back office) that are secure, reliable and can adapt with minimal disruption as you grow and develop the business.
- Make your own way and ignore the old myths and prejudices about SMEs
It is a fact that the most cost effective, successful and proven route to innovation for large businesses is to partner with high performing SMEs. A national UK Audit Office report on government spending with SMEs has shown that they offer greater flexibility, more innovation and better value for money. Don’t subscribe to the old prejudices that keep SMEs from challenging the marketplace.
- Take advantage of the support and resources out there
There is a lot of great support in the UK to help SMEs sell to Government. ContractsFinder, local Supplier Development Programmes and the “Selling to Government” guide from Emma Jones (Crown Representative for Small Business) are all fantastic resources.
Elizabeth Vega is the Global CEO of Informed Solutions and has 25 years’ experience working at board level advising on and leading successful transformation and enterprise IT programmes.
