How to find new SMEs to work with

How to find new SMEs to work with

Posted by James Piggott Picture of James Piggott on Sep 7, 2022 1:29:38 PM

Awarding more work to SMEs is a key way to bolster social value, boost local economies, and build a more diverse, resilient supply chain.

The nature of these smaller businesses, however, means they can often be harder to find and engage with, nor might they have the knowledge or resources to start getting involved in your procurement process.

In this how-to guide, we run through how you can find new, innovative SMEs to procure goods and services from, both through standard practice and through Tussell's procurement intelligence platform.

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How to find SMEs to work with

The most routine method of finding new suppliers - of all sizes - for involvement in your procurement process is to launch a pre-tender market engagement process, or 'preliminary market consultation'.

If done effectively, this process can make new suppliers - like SMEs - aware of your authority's need, encourage them to begin a dialogue with you, and give them sufficient time to prepare for your procurement process.

The Public Contract Regulations (2015) do not specify exactly what this market sounding process must look like, but it might include:

 

Releasing a Prior Information Notices (PINs)

PINs are formal public notices used to signal to the market that you have a specific upcoming commercial need and would like suppliers to flag their interest.

By opening a formal avenue for suppliers to learn about and discuss your procurement needs before a tender, PINs help to both generate market interest and provide an opportunity for suppliers to provide input on the tender's eventual specification. This is especially important for complex projects, or those your commercial team have little experience procuring before.

Publishing a timely PIN is especially important if you want to encourage SMEs to bid on your tender. For SMEs, releasing a PIN provides them with much-needed time, information and channels for dialogue that wouldn't exist if you were to go straight to tender. If you want to encourage new SMEs into your procurement process, providing them with enough run-up and assistance is key.

For more information on PINs, read our explainer blog.

 

Market sounding papers

Market sounding papers are documents that lay out in detail the nature of the product or service you'll soon be tendering for.

Like PINs, these papers can serve to raise awareness of an upcoming commercial need, and encourage suppliers to signal an interest early on.

The key difference lies in the tendency for such papers to include - or consisting entirely of - a questionnaire. See, for example, this recent market sounding paper by Transport for London to "better understand market/supplier appetite, capacity and capability, as well as perceived risks and opportunities" relating to an upcoming 'Bespoke Rubber and Plastic Components' tender, which contains a lengthy questionnaire.

Again, a well-detailed, timely sounding paper can provide SMEs the prequisite knowledge they need to prepare and get involved in your procurement process; if your paper contains a questionnaire, it's also a good opportunity to get feedback specifically from SMEs.

 

Events & webinars

Running an in-person event or webinar is another way of raising publicity for your upcoming procurement process.

Events and webinars offer you the opportunity to meet prospective suppliers face-to-face, and provide a more interactive, live forum for questions and discussions surrounding your procurement process.

A number of authorities, for instance, run and take part in 'Meet the Buyer' events, that - as their name suggests - gives an explicit opportunity for you to meet suppliers.

 

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Outreaching to SMEs specifically

Launching a market engagement process is critical to ensuring suppliers of all sizes have sufficient notice of your needs before a tender's even published.

Publicising this process only through conventional avenues, like Contracts Finder, however, means you risk not getting as much airtime in front of SMEs. Many SMEs, after all, don't proactively or regularly use public procurement portals.

You should consider publicising your engagement process in spaces that you're more likely to encounter SMEs, and to harness resources that'll more directly yield relevant SMEs for you to engage with.

 

Trade associations

Getting in contact with the trade associations most closely aligned with your target SMEs' sectors is an excellent way of getting in front of more SMEs.

These associations often have an intimate knowledge of SMEs operating in their sector, and will be able to provide a list of suitable organisations for you to get in front of.

If you were going out to tender for, say, an internet service provision contract, you could reach out to the Internet Service Providers Association UK, to ask whether they knew of any SMEs in their membership who'd be interested.

 

Social media

While many SMEs may not regularly use public procurement portals, many more are using social media on a daily basis.

Promoting your upcoming opportunities via your authority's social media channels, therefore, can be an excellent means of getting directly in front of SMEs.

You could also leverage the social following of procurement-related accounts to get the word out. Bid writers Executive Compass, for example, regularly post about new PINs and procurement news on their social channels - making sure these kind of organisations know about your upcoming procurement process could give it a much needed boost.

 

Leverage your internal channels

When drawing up a list of SMEs to reach out to, don't forget to leverage your internal knowledge.

Ask category managers from other authorities whether they know of any SMEs who align with your upcoming procurement process. There's no harm in asking the same of category managers in other sectors. If you know of - or are part of - any category working groups, leverage their experience too. 

You could also reach out to your incumbent suppliers to ask whether there are any SMEs in their supply chains who might be interested.

 

Invest in supplier intelligence tools

Finally, there are a number of paid platforms that allow you to pin-point start-ups and SMEs.

Beauhurst, for example, "lets you discover, track and understand high-growth companies". As we'll soon show you, Tussell's procurement intelligence platform can be used to find SMEs operating in your category in just a few clicks.

If you're serious about locating and integrating SMEs into your supply chain, investing in these kinds of platforms is well worth the cost.

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There are lots of ways to publicise your upcoming process to SMEs - both directly and indirectly - before a notice goes live.

During this pre-tender stage, it's also to important to consider how you'll design the notice itself to be more SME-friendly. We'll cover how you can do this in a future how-to guide - subscribe to our newsletter to not miss out.

While pre-tender engagement with suppliers is perfectly legal, do ensure you're complying with Regulation 40 of The Public Contracts Regulations 2015 when doing so: namely, ensuring that any advice or information you receive from suppliers during preliminary market consultations "does not have the effect of distorting competition and does not result in a violation of the principles of non-discrimination and transparency".

For more information on early market engagement, see the Crown Commercial Service's 'Procurement Essentials' blog on the topic.

 

How to find SMEs to work with: the Tussell way

In conjunction with a market engagement process, you can harness Tussell's procurement intelligence platform to quickly identify relevant SMEs, with hard date.

By aggregating trillions of pounds worth of public spending and contract award data, Tussell can generate a ready-made list of SMEs operating in your category, working with neighbouring authorities, or who are on certain framework agreements.

Let's say we wanted to find a group of SME cloud services suppliers to reach out to ahead of an upcoming cloud-related tender your authority is releasing. Tussell lets us quickly find all cloud services contracts awarded to SMEs by authorities in your region, and their corresponding SME suppliers for you to reach out to.

Here's how you'd do it:

 

#1 Define your sector search

First, we need to specify that we only want to search for cloud-related contract awards.

Using our ready-made saved searches, we just click on the search for cloud services contract awards. 

Graphs for blogs (3)This'll generate a list of all cloud services-related contract awards ever awarded by a public contracting authority (or: over 5,300 individual contracts, awarded to nearly 2,000 different suppliers!)

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To hone in on the contracts we're interested in, let's refine a little more ...

 

#2 Refine your sector search

Using Tussell's many filters, we can hone in on only the contracts awarded to the kind of suppliers we're interested in. Let's select:

  1. Only contracts awarded within the past 24 months, to ensure we're only capturing SMEs who are recently active in the public sector.

  2. To only show contracts awarded to suppliers identified as SMEs.

  3. If we wanted to only find SMEs who have been working in our local area, we can filter to only show contracts awarded by authorities in our local vicinity: in this example, East Anglia.

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#3 See the supplier ranking

With these filters applied, we've narrowed our search down to 9 contract awards.

By clicking on the 'Supplier Ranking' tab for these results, we can see the 7 different suppliers these contracts were awarded to.

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... and there you have it! With just a few clicks, we've generated a list of targetted SME cloud-service providers to reach out to ahead of our tender's release.

This kind of analysis - and much, more - is possible with the Tussell procurement intelligence platform.

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If you want to encourage more SMEs into your procurement processes, you can't sit back and hope they take notice: it means actively publicising your process well ahead of time, in the right places, with the right organisations.

Tussell's procurment intelligence platform can help streamline your search for SMEs through the use of hard data. To see this in action, book a tour around the platform, or reach out to contact@tussell.com.