Medium to large businesses are not the only ones that can get tenders. In the long list of open tenders, there are some in which a small business can apply. Securing a government tender can result in huge growth for a small business.
A government tender is a formal and structured invitation to suppliers. This invitation allows suppliers to bid for an opportunity to supply products or services for a certain project. In exchange for goods/services supplied, the tender winner is paid for their work.
As a small business owner, with the right tender application and industry experience you can qualify for a government tender. You really just need to find the right tender and send in your application.
In this article, we look at what tenders are available for small businesses and how you can apply for them.
How to Find Tenders for Small Businesses in South Africa
Tenders are open to any business, as long as you can fulfil the project requirements. You must ensure that before taking on the tender, the project must align with your business. You must also understand what the project would involve and produce a realistic bid that works for your business.
If your bid is properly done, your small business can win the tender.
How to Apply for Tenders as a Small Business in South Africa
To apply for government tenders in South Africa, you will need the following:
- A tax clearance certificate.
- Standard bidding document 4 (SBD 4) – Declaration of interest.
- Standard bidding document 6.1 (SBD 6.1) – Preference points.
- B-BBEE certification.
- Standard bidding document 8 (SBD 8) – Past supply chain management practices.
- Standard bidding document 9 (SBD 9) – certificate of independent bid determination.
- Company registration documents.
- Copy of shareholders’ certificates.
- Three years’ worth of audited financial statements.
- Letter of guarantee from a registered financial institution.
- Letter of good standing with the Department of Labour for unemployment insurance fund.
- Letter of Good Standing with the Department of Labour for Compensation for Occupational Injuries and Diseases.
- Proof of compliance with the relevant industry regulator.
- Proof of public indemnity cover.
How to Get your Business Tender Ready
Now that you know what is needed to apply for a tender, you need to know what kind of business is successful in tenders. The first thing you need to focus on is growing your business. By growing your business you will be able to qualify easily for tenders.
Additionally, you need to ensure that your business follows all laws and regulations. One of those is to ensure that you have registered your business with the Companies and Intellectual Property Commission (CIPC).
Remember, government tenders are not the only ones that are available. There are also private sector contracts that you can apply for. These contracts will also need your business to be ready, comply with laws and be past the micro stage.
Additionally, ensure that your pricing is right, ensure that your business and your bid stand out from the competition and that you meet every single requirement that the client is looking for.
Where to Find Funding for Your Tender
If you are looking for funding for your tender, you will need to apply for purchase order funding. Purchase order funding is there to help you fulfil large orders such as tenders. Purchase order funding can also help you with your cash flow as you will not need to use your cash to fulfil the tender.
Platforms for Purchase Order Funding
Kenote Finance
Kenote Finance specialises in purchase order funding for small to medium-sized enterprises (SMEs). The company seeks to help businesses thrive by providing quick turnaround times and affordable rates. Funding from Kenote Finance begins from R 500 000 up to R 5 million.
To qualify for funding through Kenote Finance, you need the following:
- You need to provide a valid purchase order, tender or letter of appointment.
- Your funding requirement must be no more than R 5 million.
Note: These are just the initial documents required for application. Kenote Finance may require more documentation from you.
You can submit your application online or e-mail to admin@kenotefin.co.za. If all is in order, the company will get back to you within 24-48 hours.
The People’s Fund
The People’s Fund is a funding platform which provides purchase order funding using crowdfunding. People can donate through The People’s Stokvel, which is the platform’s stokvel membership. The People’s Fund provides funding of up to R1 million.
To qualify for funding through The People’s Fund, you need the following:
- The tender’s/project’s profit margin must be higher than 20%.
- If it’s your first time applying on The People’s Fund, your buyer must be on the company’s preferred client list.
- Company registration documents from the CIPC.
- All IDs of your company’s directors.
- Proof of address and company’s proof of address.
- A valid purchase order, supplier quotes and proof of previous work.
- 12-months bank statement.
- Tax clearance certificate.
- B-BBEE certification.
Note: There are extra fees that come with purchase order funding from The People’s Fund.
If your application is in order, your purchase order will be financed within two to five days.
Don’t be afraid to apply for tenders just because your business is not big. Small business tenders are available. Apply today, and see your business grows as you get more tenders.
For more information on tenders, read our article about government tenders.Â
