It’s a known fact that it’s quite difficult for SMEs to sell their goods and services to larger companies. The process in theory can take too much time and resources, with lots of red tape and cumbersome procurement processes. It’s no wonder that many small businesses focus on selling to other SMEs
But what is the situation really like? As a company with a mission to connect SMEs to larger Procurement departments, we’ve got some ideas about what constitutes best practice, on both sides.
For an SME, positioning yourself as a thought leader or trusted voice will play into the thinking of procurement decision makers. If they don’t know you, how can they trust you? By raising the profile of your business to these buying departments, you remain at the forefront of their mind when they are looking for solutions.
There’s no doubt that Procurement (both in industry and Governmental) departments are working hard to improve engagement with SMEs, but, in our experience, the results to date have been mixed.
For an SME, responding to a tender is a time-consuming process, which requires input from senior staff. Due to your limited resources, the SME owners have to decide carefully which contracts they’re going to bid for, so the more information they get up front, the better.
That’s why we’re big fans of pre-contract engagement. Done well, it allows suppliers and procurers to find out whether they’re a good fit, in terms of their product or services and also their culture and working style.
Building excellent client relationships is crucial for a business, which provides a product and an on-going support service and being able to meet either face to face, on the phone, or via live chat with a potential customer is a vital first step in that process.
A briefing from the Procurement department, setting out exactly what they’re looking for, followed by an opportunity to meet/chat on a one-to-one basis to ask questions and share knowledge is, in our view, best practice for pre-contract engagement.
For the Procurement department, any information suppliers provide beforehand gives an opportunity to find out what’s out there in the marketplace. They might also pick up information which will help to extend or refine their requirements. If this information is available all one platform, then this can save a lot of time and money further down the line.
If after the initial pre-contract, a business realises that particular opportunity is not for them, then they’ve only lost a few hours or a day’s work in preparing for and speaking to the buyer, as opposed to weeks of input for a full traditional tender. If, however, they feel it’s a great fit, then it provides knowledge and confidence to put in a great tender.
Here’s another area we feel very strongly about – the importance of SMEs demonstrating that they’re ready to work with Larger Industries.
SMEs need to realise what these departments need and be prepared to show that they meet the required standards and have the expertise required.
E.G. if the supplier is working in IT, it could mean being ISO certified to demonstrate that their systems and processes are secure and also to show that they adopt high quality management principles and practices.
Obtaining these certifications can be a time-consuming process, but it’s a crucial one if an SME wants to differentiate from their competitors.
By having a portfolio of other Customer Successes and sharing these with potential buyers can also give a third-party confirmation of the capabilities of and the benefits of working with the supplier. This also allows a more informed choice when making the purchasing decision.
For SMEs, it is important that they can show large companies that they can “walk the walk” and deliver on time, on target, on price and satisfy the needs of the buyer. This may take some work on the SMEs behalf, but in the long run it is massively beneficial.
If you are unsuccessful in obtaining a large contract, we encourage unsuccessful firms to request feedback from the buyer on the strength of the pitch and areas for improvement. This is another excellent method of profile raising and proving to procurement managers that your organisation is serious about winning a contract.