Challenges facing SMEs Part 1

Challenges facing SMEs Part 1 – Bidding work for SME growth

by Michael J Pickthall, managing director, Pinpoint Management Consultants

All young SMEs planing for growth face common challenges, which can be significant.

While research, training & mentoring can assist in providing the groundwork for addressing these, in order to optimize cost and thus mitigate risk to a planned (and perhaps frequently aggressive) programme of growth, these frequently require support via detailed knowledge transfer and, in many cases, delivery by external contractors.

Challenges, especially for directors & stakeholders not versed in work-winning & follow-on processes , may vary from the fundamental, to an interventionist approach which supplements existing systems.

Examples of such potential 'bottlenecks' may include:How do we pre-qualify (commonly known as a PQQ or Pre-Qualification Questionnaire): How do we prepare a bid in response to an ITT package (Invitation to Tender). How do we engage the new Client during any bid clarification process. How do we handle a failure to pre-qualify or have a bid accepted for short listing. How to we turn the 'negative of failure' into a 'positive to proceed'. How do we develop an organization for a first larger project.

The list could be extensive dependent upon the maturity of the business, and particularly, the ability of the executive or board to respond effectively and thus minimise risk.

Common themes which a Client will likely consider critical to the successful delivery of the outsourced package(s), through which the bidder will be measured are Quality(Q) and HSE or SHE (Health, Safety and the Environment or the applicable variation for the latter).

Both of the above themes have prominence in any execution of a work package / project, due to the inherent risks to costs and, ultimately reputation.

The development and implementation of processes which address HSEQ challenges, to an acceptable level of risk (ALARP- compliant, or As Low As Reasonably Practicable) is not a freebie – a successful bidder can anticipate that the Client will require that these processes are both certified as acceptable for use in the respective business sector, and sufficiently robust, in the worst case scenario, to require minimal intervention by the Client's own processes while still enabling project or work package execution & delivery.

Typically, a client will require processes which are appropriately detailed for the size of project to be awarded. The challenge for the SME bidder is to enable development of these processes, without exposing its own business finances to excessive cost.

The processes which in turn address the bottlenecks alluded to above, may initially require preparation 'from the ground up', but in today's business world, unless the project produces a totally bespoke product (perhaps licensed or 'patentable'), this is rare, and synergies with existing documentation via perhaps templates or 'go-bys' may be utilised to optimise effort, within, of course the limits of propriety.

This may also include a development levy on the project profitability, which the SME board may constrain but ensure, in some measure, is included in the business case for project execution.

An SME endeavouring to address the above challenges will require adequate definition via planning, cost control, interface management and resource experience to ensure success. Due to the lack of knowledge and understanding of a new client's needs, it is important that a developing relationship is established at the bid stage with the prospective client, to enable understanding, which will be a key driver going forward. ©Pinpoint Management Consultants Ltd. 2016