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How to Complete a Tender Process Effectively in 7 Basic Steps
In today’s competitive environment it is essential that when you are tendering for a project that you optimise your chances of success.
Not only do you need to demonstrate your ability to comply with the requirements of the scope of works, which is generally the area where the benefit of your experience and accumulated skills is brought into focus, there is increasingly an additional deeper focus by the party putting the project out to tender for you to comply to a number of financial levels.
These requirements have increased in the past few years as the tendering process has become increasingly competitive, with some businesses tendering at levels that are unsustainably low and in some cases resulting in the ultimate failure of that businesses as a result of businesses undertaking projects that may provide turnover but no profit or worse still provide substantial losses or financial obligations under the contract.
There is a general expectation across a number of industries that each and every business tendering will have solid financial systems, up to date financial reporting and financial forecasts to hand. For many mid-sized businesses this appears to be overkill but can be achieved cost effectively by ensuring that the following 7 basic areas are attended to :-
- Planning ahead and considering the bigger picture of the whole business and preparing forecasts to ascertain how you can grow the business and take on projects in a progressive manner whilst minimising cash flow concerns
- Ensuring that you have a solid process with which to price a project and prepare a tender incorporating the appropriate level of costs and ensuring all costs are captured
- Considering the impact of variation orders
- Knowing at what level a tender is not viable for the business
- Understanding that in today’s environment that there is a need to be tendering across an increased level of projects
- Having a reliable method of capturing and allocating costs to projects once the project is underway
- Ensuring that financial reports are prepared on a consistent and regular basis and acted upon where needed
We have observed that where businesses have a good understanding of the industry, the project and a good financial discipline incorporating the above, that they have a higher than average chance of progressing through to the final stages of the tender process.
MP+ have assisted a number of their clients capitalise on their existing skills and develop their financial systems in order to maximise opportunities and avoid exposure to unnecessary risk.
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