Busting the Common Myths
Over the next five weeks, I’m going to attempt to bust a few common myths which often act as barriers which prevent many smaller businesses from announcing to Government that yes, they’re ready to supply them!
And by ‘myth’, I mean a ‘widely held false belief or idea’. A misconception. A fallacy. You get the idea.
So let’s take a look at the biggest myths confronting smaller businesses in relation to bidding for and winning Government business.
Myth 1: “We’re just not big enough”.
Myth 2: “Government will never need our ……….. (Insert your product or service here)”.
Myth 3: “Ahhh, it’s all ‘jobs for the boys’. Government already knows who they want, and they make sure they get them”.
Myth 4: “Government only chooses the cheapest suppliers. Pay peanuts, you get…”
Myth 5: “Government takes months to decide who they want, and then take months more to pay any invoices!”.
So today we’re going to unpack Myth 1: “We’re just not big enough”.
But before we do, I’d like you to take a look at the following table which provides a snapshot of a handful of Government contracts awarded recently. Each myth we break down every week will have a similar table, just with different contracts that’ve been awarded.
Each week I’d ask you to look at the data, and in particular column 4: total number of submissions.
Why?
Because while I’ll attempt to help small businesses realise that these myths are possibly holding them back from a huge Government revenue opportunity, I also want you to realise that for the most part, for many Government contracts only a handful of businesses are actually raising their hands and letting Government know that they’re a viable partner for them.
To illustrate, below we have a sample of five recently awarded Government contracts totalling $2,183,392.
How many businesses chose to make a submission to try and win these 5 contracts?
Just 16. In total!
Take a sec to let that sink in.
Are you starting to see the opportunity, here?
So, you think you’re not big enough to service a Government contract? I see how many smaller businesses arrive at this conclusion. And I’ve talked to enough of them over the years to know that this myth is common.
“Government is a BIG, BIG beast! My little business couldn’t possibly deliver a product or service that they need, right? And what if something went wrong? I might lose everything I’ve worked for!”
In 2020, 59% of Federal Government contracts awarded totalled less than $80,000 (just quietly, small business won just 26% of these!). So, my argument here is that many small businesses have the capability and resources to fulfil a contract worth $80,000 or less. Probably not all, but certainly thousands more than the handful bidding in the table above.
While I wish I did, I don’t have similar stats for State or Local Government. However, based on my experience, I’d bet a decent amount that at least 59% of contracts they awarded in 2020 were less than $80,000 in value.
Now if you want to look at the glass as half-full, I know, as I’m sure you do as well, many smaller businesses who can and have successfully fulfilled contracts well over 100k. Beyond $200k+. But not in the public sector. At least not yet. Hopefully this will change as smaller businesses begin to understand that they can win Government business.
Think you’re too small to supply Government contracts? Think again!