Securing a government contract can be an amazing opportunity for emerging businesses that provides dependable income and a solid platform for growth.
Government contracts are stable and reliable, less vulnerable to the cycles of the economy and provide a great reference. On top of that, you’ll almost always get paid on time.
But there are of course some hoops to jump through before you get there.
At first glance, a government contract might seem out of reach for a small startup – but it’s not as unachievable as you might think.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
In the last financial year, about 60% of government contracts awarded by the Australian government were awarded to small and medium-sized enterprises. That’s an impressive figure, and it goes to show that these contracts are within reach.
Overall, there’s a strong feeling in government right now that innovative ideas should be given room to flourish, and those ideas most often come from the startup sector.
I’ve been working in technology for about 20 years, in both Australia and the UK, and landed my first government contract to help transfer paper systems to online about 15 years ago.
Since then I’ve developed a love of all things public sector, and now head up the Government Services Division at technology agency Gruden, which makes government products including AusTender.
Here are my tips on how to best approach the challenge of securing government work:
1. Bid for tenders that actually exist
Your startup company might have a great idea to fix a problem that a government hasn’t actually noticed yet – but that doesn’t mean you’ll be successful.
Approaching a government with solutions to a problem they haven’t acknowledged yet is called an “unsolicited proposal”, and they are notoriously difficult to pull off.
For small companies with limited resources, you’re much better off spending your time applying for tender opportunities that already exist.
2. Come up with an application template
When writing your bid, don’t think you have to reinvent the wheel. There are heaps of industry standard tools you can use to build a submission that will stand out and get results.
Tools like SWOT analysis, for example, can help you figure out the strategy you need when writing your submission. They’ll focus your work and provide a convenient template for what you want to say.
Once you’ve made one submission, take what you wrote, refine it, and use it as a template for the next bid. You’ll be surprised how much is transferable, regardless of how different a submission might seem at the outset.
3. Offer value for money, not the lowest price
In government contracts, the key factor is value for money – not necessarily the lowest cost proposal, but the one which meets their objectives in the most financially efficient way.
When writing a submission, it’s important to focus on the project objectives with that knowledge in mind.
Part of the ‘value for money’ proposition includes factors like reliability of service delivery, scale of service offering or proving yourself the lowest-risk option.
Find your point of difference as an organisation, the message that will make your organisation better value than the competition, then structure your whole submission around it.
4. Consider forming a group with other startups
Even if you are able to submit an extremely compelling proposal, the reality is not all startups have the experience needed to satisfy a government tender process.
The good news is, you don’t have to go it alone. A group of smaller enterprises can succeed where a single organisation would fail, by providing the security of a larger enterprise with the flexibility and innovation of the smaller ones which make up the group.
Startup incubators provide natural breeding grounds for consortiums, but if that isn’t for you, consider approaching a larger organisation to offer your niche expertise to their financial clout – together, you’ll have what it takes to win that tender.
This article was first published by StartupSmart.