For many small businesses, winning a tender from a company, a school, a county government or an agency is the step that changes the size of the business. But tenders are competitive, strict about paperwork and unforgiving about deadlines. Treat each one as a project, with a plan and a checklist, and your chances improve a great deal.
Where tenders come from
Opportunities are published in newspapers, on the buyer's own notice board and website, and through the national and county public procurement portals. Large private companies run their own supplier lists. Register on the portals that matter for your sector, and set a routine to check for new notices each week. Many tenders are open only to registered suppliers, so complete registration before you need it.
Decide whether to bid
Read the tender document fully before you decide. Check the scope, the delivery period, the evaluation criteria, the required experience and the payment terms. Ask yourself whether you can really deliver at the volume and quality asked for, and whether the buyer's payment record fits your cash flow. A tender you cannot deliver damages your reputation more than not bidding at all.
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Get your compliance documents ready
Most tenders ask for the same set of documents:
- certificate of registration or incorporation;
- a valid tax compliance certificate; see getting a tax compliance certificate;
- a KRA PIN and, if registered, a VAT certificate; the VAT registration checker shows whether you need to register;
- business permits; see business licences and permits in Kenya;
- audited or management accounts, bank statements and references from past clients;
- a bid security or bank guarantee, where required.
Keep these in one folder, updated, so you are never scrambling on the last day. An expired certificate can disqualify an otherwise strong bid.
Price the bid properly
Work out your real cost before you add margin: materials, labour, transport, insurance, overheads and the cost of any bid security. Then add VAT if you are registered, using the VAT calculator. A price that is too low wins the contract and loses money; one that is too high loses the bid. How to price your products and services in Kenya and the break-even and pricing calculator help find the floor. Remember that public buyers often pay late, so allow for the finance cost in your cash flow forecast.
Write a clear, compliant response
Answer exactly what is asked, in the order requested, and number your documents to match the checklist. Evaluators often use a scoring sheet, so make it easy for them to find each item. Use plain language, include evidence of similar work and keep the technical and financial parts separate if the instructions say so. Proofread, and have someone else read it.
Submit on time
Know the closing date, the time and the method of submission. Aim to submit a day early. Late submissions are normally rejected without being opened, and a bid delivered to the wrong place is treated the same. Keep the receipt or acknowledgement.
Track your bids
Use a single list for every tender: reference, client, closing date, value, status and outcome. The tender and bid tracker shows the days left to each deadline, the value of bids submitted and won and your win rate. A weekly look at the list keeps deadlines in view.
Learn from results
Ask for feedback on bids you lose and record what you learn. Over time you will see which kinds of tender you win and which you should skip. A win rate of one in four is normal in many sectors, so judge yourself on whether the pattern improves.
Plan for winning
If you win, you need cash and capacity to deliver. Review borrowing for your business if you need to finance stock or equipment, and check how the contract will be taxed. Withholding tax may be deducted from your payments, so read withholding tax in Kenya explained and keep the certificates. Careful preparation and good records turn tenders from a gamble into a reliable source of work.
A checklist for the last week
Seven days before closing, confirm that every certificate is valid and every form is signed. Five days before, finish the pricing and have it checked by a second person. Three days before, assemble and number the documents and make the copies required. One day before, deliver or upload the bid and confirm receipt. This simple countdown removes most of the errors that get bids rejected on technicalities.
Related tools and reading
- Free calculator: VAT Calculator
- Free calculator: VAT Registration Threshold Checker
- Free calculator: Turnover Tax Calculator
- Excel template: Product price list with VAT
- Excel template: Credit note with VAT
- Excel template: Freelancer turnover tax versus annual tax comparison
- Guide: How to write a business plan that banks and investors take seriously
- Guide: Starting a business in Kenya: registration and tax steps
- Guide: How to collect late payments from customers without losing them