What is a tender?
A business tender is an offer to do work or supply goods at a fixed price. The tender or bid process is designed to ensure that the work to be done is given out in a fair way. There are a number of policies (known as ‘procurement policies’) which are used as guides on how to make decisions on which tender to accept. Although price is very important in the decision on which tender or bid to accept, it is not the only factor taken into account.
Once the client entity accepts a tender, it is binding on both parties. This means that the person or company that won this business opportunity has to provide the goods or services in the manner agreed to and at the price offered, and the client entity must pay the agreed price at the agreed time. In other words, once accepted, a tender is a binding business contract.
Even if you don’t win the work this time, writing a tender can clarify your aims, strengths and weaknesses and you can learn for next time by asking for feedback on your bid. It raises your profile with the client and helps you learn about the clients needs.
Tenders in South Africa are a lucrative source of income for small business, but can be challenging to negotiate, particularly since legislation has changed, and requirements differ between organisations and government sectors. Getting the process right not only saves time and effort but has the potential to set up lucrative income streams.
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