It is hard for any business to really be planning the next 12 or 24 months, but that is exactly what the businesses who will survive this pandemic will be doing right now, says Apricity Finance’s Linden Toll.
While most business owners will be worrying about what the future holds, we think this presents a real opportunity for finance brokers to talk with their SME clients about how they can be ready to bounce back. And with all the stimulus measures in play, helping your clients understand how they can get involved in projects underwritten by government, may be a great place to start.
According to Infrastructure Australia’s 2020 Infrastructure Priority List*, there is a record 147 nationally significant proposals with a project pipeline of almost $60 billion, designed to guide the next 15 years of Australian infrastructure investment
Although the main contracts for large-scale infrastructure projects are typically awarded to the large construction firms (CIMIC, Transurban and the like), these firms will subcontract out much of the work to smaller firms, who in turn will subcontract out their own projects. Much of this subcontracting is done via a tender process.
While taking on these projects is not without risk (we recently ran a webinar that looked at how SMEs can ensure working on these contracts works for their business, with insight from ASBFEO Deputy Ombudsman Dr. Craig Latham, and author Maurice Downing (Winning Government Tenders**), these are the top five things that brokers should know to help get their clients ready for the tender process:
Finding Upcoming Tenders
By law, governments must publish tender opportunities publicly, so it’s not hard to track them down. There are a number of government websites and private services services that offer subscription notifications as new projects arrive.
The 2020 Infrastructure Priority List, complete with summaries for each project and initiative, is very helpful and available on the Infrastructure Australia website. It also has an interactive map which sets out a detailed view of infrastructure issues and opportunities identified around the country.
Preparation Pays Off
Getting ready to apply for tender ahead of time will reduce stress, make for a better application and win an SME more business. Ahead of time, it’s a great idea to work together with their finance advisers/accountants and collate a series of tender documents that represent types of opportunities that would be of interest for the client.
From here, partnering to create a document library will mean that they will have all the background materials already prepared. This can drastically reduce application time and ensure you and your client can continue to focus on the current business.
When evaluating tenders, government and other project managers will examine the financial viability of their suppliers.
Ask your clients: Do they have enough capital on-hand to ensure they be around to complete the work? Can they sustain their services between their invoice payments? The answers to these questions can greatly affect the assessment panel’s decision.
Anything that the supplier can show that they are financially is looked upon very favourably. As their broker, this is a great time to talk with your clients about equipment finance, invoice finance and any other solutions that can help ensure they have the financial capacity to complete the job.
Get to the Point
Always ensure the client is keeping their application concise – always remind them to keep in mind the primary audience, which is the tender evaluation panel. Making their job easy is key, the tenders that take the least time to evaluate are the best tenders.
Are they answering the question? While this might seem obvious, it’s important they identify the key information needed, answer the question without unnecessary detail, back up information with evidence, and where possible use graphics to support the narrative. They should also avoid hyperbole and meaningless motherhood statements.
Get some help
There are a number of formal training courses and workshops for companies that teach skills on how to develop strong tender responses. Maurice Downing, as well as authoring his book, also runs Corfocus, which helps businesses prepare for the tender process.
Additionally, liaising with state and Commonwealth departments about how best to respond a tender can be of a great help.
Linden Toll is the founder and chief executive officer of invoice finance facility Apricity Finance, which was established in 2013.
Linden has more than 25 years working across the finance industry in Australia and Asia. His extensive career covers time working in distribution, capital raising, product development and investment reviews, responsible manager and board level roles.
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