Friday, 26 March 2010

The outlook from SMEs

I have been running a number of workshops for SMEs in the North and Midlands this month, around Tendering, PQQs and the opportunities from London 2010.
As part of that I have asked how many businesses have seen their turnover increase over the past 12 months, during the recession. More than half indicated that it had, and I would guess about a quarter said turnover went down. That is better than I expected, and certainly better than you would expect if you took the media at face value.

Now this group of businesses is hardly a fully representative sample of the sme community - they are ones prepared to invest time and money in attending seminars about business opportunities and how to improve. So maybe I should expect them to be doing well even in difficult conditions. However they were not insolvency practictioners either, so they have got there despite the economy not because of it.
It made me feel more confident about the strength of the UK Small business sector. I hope that I am right.

Sunday, 7 March 2010

SME business, public sector procurement and recession

Last week I ran a couple of sessions for SME businesses on PQQs and Tender writing for public sector contracts. We had over 100 businesses over the 2 sessions (which are running again in Leeds at the end of the month), and they were a lively group with lots of interesting questions and points of views.

Two points stood out for me. The first is the one that I have raised many times before of the need for a standardised PQQ form for all public sector contracts. The OGC template is fine as long as all public sector bodies use it in the same form. Ideally the information would be centrally held, but let's not be too idealistic. But the use of a standard form would be simple and easy.

The second issue is the impact of the recession on company turnovers. It has been a hard year or two for many companies, and turnovers are often down on previous years. There is a concern that this may be a negative for some public sector buyers, who will be worried that the companies are not financially secure. If it is a universal downturn (and it will not be) then everyone will be in the same place, but realistically good companies may also have had a deterioration in their trading position and it may make them look weaker than they really are. The second part of this is that for many contacts there is a requirement that the bidders turnover must be a multiple of the contract value i.e. the contract can make up no more than say 25% of turnover in any one year. If turnover is down, then the value of contracts that a company can bid for will be lower, which will in turn reduce the potential turnover in future. A tricky cycle could be established. It may not be an issue for most companies, but it will surely effect some. A little leighway may be necessary when drafting requirements - when the PQQ and ITT are written it is too late.