Central government spent over £12billion with SMEs in the last year. But how do you make the most of this opportunity?
Public procurement has undergone remarkable change in recent years. Gone are the days when government contracts were closed to practically all SMEs. With new regulations driven by increasing SME engagement and a commitment from ministers that by 2022 a third of spend on goods and services will be with SMEs, all of the UK stands to benefit from a more vibrant, innovative and aspirational economy.
But getting a share of this procurement spend needs SMEs to invest in getting to know the public sector market and understanding that government buyers are unlike any other buyers.
A key difference is that government operates within tight political, legislative and policy constraints. So expect to come up against a certain amount of bureaucracy and prepare to manage it.
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 diverse and sizeable opportunities.
This may appear daunting and at times it can feel like you’re trying to find your way through a maze. The best way for SMEs to plot a course for success is to start by targeting government buyers that most closely resemble your current customers.
Then you have to 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?
Nowadays engaging with government is a lot easier then when I set out to try and work with government 20-years ago. There are plenty of really helpful initiatives being developed that build on the excellent work of the Crown Commercial Service SME Policy team and Emma Jones, the Cabinet Office’s Crown Representative for Small Business.
When asked to comment for this article, Emma explained how the Government’s ministerial commitment to spend £1 in every £3 with SMEs is driving a much more supportive environment.
“Ministers are demonstrating their commitment through Meet the Buyer events, regular webinars, personally supporting the work of the SME Advisory Panel and, more recently, showcasing the Top 100 SME Suppliers to government,” she said. “It’s a good time for small businesses to sell to government as, with the right product and approach, you’re knocking on an open door.”
But what’s key is how you fine tune your product and approach to your best advantage. Be thorough so you 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.
When you’ve got a strong grasp of what your government buyer wants and how they will procure it, closely align your proposal to the buyer’s specific needs and preferences.
If you can properly define relevant areas where you can add further value within your proposal, this will be more attractive to your buyer. Emphasise your key differentiators and product/service features as they relate to delivering superior benefits, solving the buyer’s problem, meeting their needs and more easily accommodating their 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.
Echo the language of the buyer over your own, to demonstrate an understanding of their needs and empathy with buyer preferences.
If you’ve done all the above to a high standard, you should expect to get a fair hearing from government buyers. But there’s one vital detail that should never be overlooked.
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 issues 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.
If you do this, you’ll not only be well positioned to win work, but it’ll help you access other opportunities across government. Having worked with government for some 20-years, I know that government buyers move jobs regularly, talk to each other and strong testimonials will help you leverage future opportunities.
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.
And, wherever you can, always look to 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.
This is a great time to be an SME despite what the doom-mongers say. There are now almost 5.6million SMEs in the UK and within our sector there is enormous capability that can benefit government, UK business and employment, as well as our wider economy. We know from last year’s National Audit Office report on government spending with SMEs that they offer more flexibility, more innovation and better value for money.
The government’s target of spending more with SMEs is an opportunity that we should all seize with both hands.