Starting a successful small business is challenging, often hinging on the business’s ability to win and fulfil contracts and purchase orders, unlocking consistent growth. Winning a tender from a private corporation or government entity can help an SME generate a cash flow into the business, scale their operations, generate a profit and expand their base of clients.
Tenders can help small businesses, especially ones that have recently started, to establish themselves and help to promote growth and revenue generation.
However, when it comes to procuring a tender, it’s easier said than done. Bidding for a tender is a complicated process that requires you to have the right documentation, registration and capabilities and, on top of this, is highly competitive as multiple SMEs bid for it at the same time.
Here’s everything you need to know about tenders to help you identify and land tender opportunities for your business.
What is a Tender?
A tender is essentially an invitation to bid for a project offered usually by the government or larger private entities to small and medium-sized businesses. If a government body or private entity requires work to be done or needs stock supplied, they will release a tender detailing what they require and different SMEs can apply to meet the tender and “bid” for the right to supply it.
Different businesses bidding will need to ensure that they can meet the tender requirements before submitting their application and meet certain business criteria in order to be considered. Their application will need to include their cost for the service, their business plan, their strategy to meet the tender and additional motivations for why they should be selected (such as proven prior experience handling the tender requirements).
The government or business will review the tender applications and award the tender to one SME. If the company accepts the tender it becomes a legally binding contract for both parties.
How to Find Tenders For Your Business
Tenders are open to any SME or businesses that qualify and meet the requirements. You can find available tenders on a variety of platforms in South Africa, including:
Websites
The majority of available tenders are posted online on websites. The South African Government’s official website has a tender bulletin that’s updated weekly. There is also a dedicated eTender portal that posts government tenders.
Newspapers
The majority of tenders are posted online but you can still find available tenders in newspapers and printed bulletins. You’ll more likely find them in smaller, provincial and communal newspapers.
Tender notifications services and sites
Aside from government websites, there are free sites that share available tender opportunities for free, including websites like SA Tenders, Online Tenders and Leads 2 Business (primarily for construction tenders).
How to Apply for a Tender
If you’ve found a tender that aligns with your business’s services and industry experience, this is what you’ll need as part of your tender application:
– Your tax clearance certificate.
– Your B-BBEE Certificate.
– Your Central Supplier Database(CSD) Registration (if the tender is a government tender).
-A Standard Bidding Document 4 (SBD 4) which is your Declaration of Interest.
-A Standard Bidding Document 6.1 (SBD 6.1) which lists your Preference Points.
-A Standard Bidding Document 8 (SBD 8) which details Past Supply Chain Management Practices.
-A Standard Bidding Document 9 (SBD 9) which is the Certificate of Independent Bid Determination.
The above documents make up the essential documentation you will need as part of your application, but you may be asked to supply additional forms like:
– Company registration documents.
– A Letter of Guarantee from an authorised financial institution.
– A Letter of Good Standing with the Department of Labour for Unemployment Insurance Fund.
– A Letter of Good Standing with the Department of Labour for Compensation for Occupational Injuries and Diseases.
It’s a good idea to have them on standby, as the sooner you can send them off, the sooner your application will be considered by the government body or private entity.
Conclusion
Receiving a tender is an exciting next step in your business’s growth and scaling potential, but you may require external funding in order to successfully meet the tender requirements.
At Sourcefin, we have extensive experience in helping SMEs fulfil their tender contracts through purchase order financing and business process advising and enablement. Find out how Sourcefin can partner with you to scale your incoming tenders and purchase orders and contact us today.