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The upside of tendering during a downturn

April 18, 2023

In today’s uncertain economic climate, many businesses are concerned about their ability to weather the storm of a recession. With predictions of a global financial crisis 2.0 looming, it’s more important than ever to look for ways to safeguard your business against economic downturns. One way to do this is by focusing on successful tendering and good corporate governance.

With every downturn comes an upswing in compliance requirements and government spending.  As history has shown, spending on public works, social support programs and more recently, knowledge-based services has been found to be an effective stimulus in reversing adverse impacts on the economy, and restoring long-term growth.


Public social spending trend 1800 – 2016 – Our World in Data

This trend creates a valuable opportunity for businesses to invest in themselves to win tenders and generate revenue even in difficult times. In many cases, contract terms will still come up for renewal and those businesses that are best prepared to seize the opportunity will be ahead of the game by creating a barrier to entry for the next bid cycle.

Finding opportunities

To succeed in tendering, it’s important to monitor the market for opportunities and get your systems and processes in place. There is a plethora of portals that publish daily tenders (including Bidhive’s open contracting portal that includes daily tenders for NSW and UK Governments), allowing you to respond to new opportunities as they arise. But a more proactive approach is to monitor advance procurement notices and procurement plans. These are forward looking procurement opportunities that are valuable to businesses looking to win government contracts. By publishing what they’re planning to procure, prospective bidders gain a longer runway to plan their capture activities.

With this longer lead time, businesses can conduct more in-depth research and analysis, collaborate with partners and suppliers, and fine-tune a potential solution aligned to a customer’s requirements to increase their chances of success. Ultimately, advance procurement notices and procurement plans will enable you to better understand the government’s needs and priorities, and position your business as strong candidates for government contracts.

Reduced competition increases odds of success

As many companies struggle to generate new business and cut back on marketing and sales efforts, the tender process can provide a less crowded marketplace, making it a good strategy to win new business.

In fact, an opportunity that is advertised could potentailly be an opportunity that is missed by your competition if they’re not actively scanning the market.  While tenders are often publicly advertised to increase competition, the unfortunate reality is that unless a business is monitoring published tenders, the chances of missing them can be quite high.  The exception of course is when suppliers are invited to selectively tender. For this reason, registering on tender portals is a good way to gain visibility with potential buyers so that you can receive notifications and/or be invited to bid on opportunities that are matched to your business profile.

Steady revenue

Winning tenders can provide a steady revenue stream during a recession, with longer-term contracts often helping to offset any downturn in other areas of the business. This helps to diversify your customer base and reduce reliance on a single source of income. Where contract values are a fixed price, this allows the business to plan resources and allocate budget accordingly. This can be particularly beneficial for small businesses or startups that may struggle to secure long-term contracts otherwise. By winning tenders and securing contracts, you can also build a track record of successful projects, which can help to attract new customers and further establish your reputation in the market.

Maturing governance processes 

Responding to tenders can also help to mature your processes and governance mechanisms. Tenders often require businesses to demonstrate their compliance with various regulations and standards, which can help you to develop and improve your internal processes and governance structures. The process of responding to tenders itself can also help businesses identify areas for improvement and develop strategies for continuous improvement. By developing these processes and governance structures, you can not only increase your chances of winning tenders but also improve your overall operations, which can lead to long-term success.

Pursuing and winning tenders can lead to new business opportunities and relationships, which can help businesses grow and thrive even during a recession. Tenders can also improve competitiveness, as it requires businesses to sharpen their competitive edge by developing innovative solutions, improving efficiencies, and reducing costs. Many of today’s leading firms such as Microsoft and Nokia were born or transformed in the ”creative destruction” of economic downturns – and several of today’s leading firms are strongly increasing their R&D expenditures in preparation for their next phase of aggressive growth.

Economic crises are historically times of industrial renewal. Less efficient firms fail while more dynamic ones emerge and expand. Learning from the past and present trends can be valuable in helping businesses navigate a recession and better manage risks to position themselves for long-term success.


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