Busting the myths: you CAN grow your small business by selling to the public sector - myth 1

You’re a small business owner who wants to grow your business. To be honest who doesn’t want to grow their business? It’s likely you’ve not given much consideration to selling to the public sector. Why would you? Its complicated, your business is too small, the reasons not to go on.

What if I told you these were myths? That the public sector wants to buy from you! Join me over the next few weeks while I bust these myths

One reason that you may not have thought about selling to the public sector is that you think your company is too small to sell to the public sector (MYTH 1). In fact, you may think that organisations like Housing Associations, local councils, and even large central government departments wont buy from you because you’re a small business.

What if I told you that this is a myth? That’s right, your belief that your business is too small to sell to the public sector is incorrect.

Ok, its fine me telling you that but you want proof.  Let me tell you the official line.

The government made changes to help SMEs bid for public sector contracts. These changes are outlined below. 

Suppliers must be paid within 30 calendar days

The government requiring the entire public sector supply chain to pay suppliers within 30 calendar days. In reality, central Government departments will pay valid invoices within 5 working days. In Scotland the public sector pays 99% of valid invoices within 10 working days.

Payment terms for SMEs were accelerated further last year as a result of the COVID-19 pandemic.

This is because the government recognise the importance of cash flow for smaller businesses.

Even as a sub-contractor on a government contract you must still be paid within 30 calendar days. In some tenders you will be asked to complete a prompt payment certificate. This means you are committing to pay your suppliers within 30 calendar days.

Making buying simpler

The government is committed to making buying simpler for low value public sector contracts. This was achieved by removing the requirement for a pre-qualification questionnaire for low value contracts.

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Requiring contracts to be advertised in one place

Well, that headline above may be slightly misleading. Each nation of the UK has a dedicated portal.

  • In England all Central Government Department and its agencies are required to advertise contracts over £10,000. The portal Contracts Finder is used for this.

    In addition, the wider public sector in England must advertise all opportunities valued over £25,000 on Contracts Finder.

  • In Scotland the Public Contracts Scotland Portal must be used to advertise all opportunities.

    For contracts under £50,000 (for goods and services) the Quick Quote facility can be used to invite suppliers to bid.

  • In Wales the portal Sell2Wales is used to publish notices.  It also has the Quick Quote facility.

Public Sector spend with SMEs

The UK Government has previously committed to 1/3 of its spend going to SMEs by 2020. This was then extended to 2022. We’ve been unable to verify how much of their spend is currently with SMEs.

In Scotland:

  • Last year 76% of opportunities were awarded to SMEs

  • £542 million was spent with micro companies. These are companies with less than 10 employees.

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What are you waiting for?

As you can see the public sector wants you as a supplier. There are opportunities to help you grow your business.

You can download our free guide which takes you through the first steps to take in preparing to sell to the public sector. Or book a virtual coffee. We’ll talk to you about your business and the opportunities available to you and your business.    

Shiona Campbell