In the past few years, tendering has become very popular. Basically, customers are state and commercial enterprises, so at such tenders, supplying their products to institutions, you can make good money. This is a good opportunity to promote small businesses. Various enterprises are looking for suppliers of goods and contractors, and the winner receives a stable consumer, financial support, work and good income. Tenders are held very often, but not everyone knows how to make money on tenders, and is this possible in principle.
How the system works
The essence of the game is one: all participants offer their services and goods, while respecting the conditions of the customer, in order to win. The tender organizer has the opportunity to choose the most profitable contractor, and the participant who won the bidding is the regular consumer, the amount of work and marketing of goods, thereby receiving economic benefits.
How to participate
The customer may be private individuals and organizations, commercial structures and state enterprises. The state is one of the largest consumers, so most entrepreneurs and small businesses are trying to take part in such tenders. By law, individual entrepreneurs and legal entities can participate in the tender.
To start bidding, you need to open an IP or LLC, be a bona fide taxpayer and comply with the requirements of the commission. If the application is submitted in electronic form, you will have to pre-issue an electronic signature, or collect the entire package of required documents and take them to the appropriate office.
For trading on the Internet, you will need to select a suitable platform, register on it and get accreditation, that is, provide all the information about the company and about paying taxes.
Kind of auctions
There are several types of bidding:
- Open bidding - when the tender information is publicly available, and anyone who is eligible for the tender can take part. All competitors submit applications and the necessary package of documents. When all applications have been submitted, the bidding committee selects the most profitable contractor.
- Closed bidding. As a rule, only those enterprises that are approved by the customer themselves or are engaged in narrow specialization participate in such an auction.
- Electronic bidding. In this type of bidding , contractors from other regions can participate, since the filing of applications and the drawing takes place electronically.
It is more likely to win state lots, since there are more stringent regulations and, according to the law, the customer should not be interested in who will become the winner. This principle helps many start-up entrepreneurs to win and earn money on tenders without investment at the initial stage. So, is it possible to bid without initial capital?
Advantages and disadvantages
Tenders are not earnings for beginners, because customers give preference to enterprises with experience in the service market. In addition, you need:
- To have a digital signature, depending on the selected trading sites.
- Have or open your own company, register a legal entity.
- Spend some time tracking the process and choosing the best deals.
- Register at the sites. Sometimes you need to pay for registration.
- It is necessary to have financial security in the form of 15 percent of the amount proposed by the customer. This amount of money of the contractor is reserved before the start of the competition.
For beginners, the above rules are not always enforceable. But if you look on the other hand, there are pluses in this, thanks to which anyone will know how to make money on tenders without investments or at minimal cost:
- You can choose tenders that do not require an electronic signature, and submit documents in paper format.
- It is not necessary to register at public procurement sites.
- Not all tenders require a guarantee before the auction. Money is paid after its completion or fulfillment of the contract.
- Individuals can also participate in tenders, but only if the organizers are local authorities or enterprises. For a wider selection of applications, you need to open an IP.
- Registration of a legal entity does not require much time.
Even as the owner of the enterprise, you can have both physical and legal registration, increasing your chances of winning.
The nuances of earnings on the tender
Representatives of small businesses and private entrepreneurs cautiously look at the idea of participating in tenders, explaining that everything is seized there, bought and it is known in advance who will be the winner. Inexperienced and shortsighted managers may not risk spending their time participating in tenders. But how to make money on tenders and not lose out if you are involved in the supply of goods or services?
To become a bidder, you need to familiarize yourself with what the customer wants, what types of services he needs. Government orders are published on special sites, and if you browse them, you can quickly find exactly the order you are interested in. Even if the cost of work does not match the market, you can contact the organizers for information on this issue. Many potential applicants, seeing an inappropriate cost, will refuse the competition themselves, and you may have a chance to become a participant and, possibly, a winner.
Or vice versa, bidding is too tempting. Perhaps such prices for services are set up specifically for a particular company. To participate in the struggle for such a tender also makes sense, especially if you are able to bargain, and your goods and services meet the requirements of the customer. It will not be superfluous to check the reputation of the customer company to identify fake winners. If in the previous tenders the same legal entities became winners, then the probability of earning tenders is minimized, and you should not waste your time on such a tender.
The practice of bidding over the past few years has proved that the commission gives preference to those participants who carry out their work and deliver goods at an affordable price. However, it’s not necessary to intentionally lower the cost of services. Then how to make money on tenders? The answer is simple - prove your performance.
Competent approach
A shadow of doubt that auctions are not always honest is always present. But if you think only about this, then you will not be able to earn money at the auction and expand your activity. If you are already wondering whether it is realistic to make money on tenders, then it's time to start acting. To eliminate risks and possible errors in the bidding, it is recommended to obtain as much information as possible about how the contract system for providing organizations with services and various goods works. Next, consider how to make money on tenders in principle.
Some tricks
Patience: careful and patient tracking of customer requests can contribute to winning. Anything can happen. A technical error, a change in the cost and type of services required by the organizer, as well as other points can play into your hands, while others have already refused to compete for this lot.
Frequent bidding: the more often you take part in different competitions, the more likely you are to win and find out if you can make money on tenders this way. This is a real valuable experience.
Adequate assessment of opportunities: there were cases when the contractor deliberately underestimated the cost of services in order to win the lot, and then could not fulfill the conditions even at the price that he himself offered.
A good application: a well-written application for participation is your business card. It is necessary to clearly formulate your proposal, and most importantly - to write it without errors. In most cases, customers disregard sloppy applications. Show your serious approach to business and the fact that you are really ready for cooperation.
Specialist help
Most likely, if you have never participated in tenders before, you should consult with your accountant, who will assess the economic situation of the enterprise and say whether it is realistic to make money on tenders in one case or another.
Participation and victory in the competition can improve the financial condition of the company. Providing the customer with information and documents confirming the quality of the services provided and the profitability of further cooperation increases the chances of winning. And there are many small things and documentation that an experienced economist is well versed in.
In addition, in order to withdraw your candidacy for full bidders, it is not out of place to be up to date on the market and to have information about how much you earn on tenders, how much your product is in demand. A specialist in this matter will help to correctly prepare documents, issue guarantees and even accompany your participation in the auction.
Financial guarantor
One of the requirements of tendering is a financial guarantee. The customer requires that 10 to 15 percent of the tender amount be included in the application to be sure of the solvency of the future contractor. In the future, this money will go as a penalty or financial losses in case of failure to fulfill the terms of the contract. There are three types of guarantees:
- Tender Guarantor - 5 percent of the lot value. It guarantees the organizers that the winner will fulfill his obligations after the bidding. The amount is paid at the time of signing the contract.
- The guarantee under the contract is about 10 percent to cover fines, penalties and other unforeseen situations.
- Bank guarantee - up to 30 percent of the amount invested by the customer. It is used to pay advances to the contractor and paid by the bank.
In almost all tenders, a certain amount of money is required to guarantee the organizers the solvency of the candidate. If the winner refuses to fulfill the contract unilaterally, the amount of the contribution is not refundable.
Bank guarantee
One of the answers to the question of how to make money on tenders and public procurements without having a lot of money at their disposal will help to find the answer with a bank guarantee. This method helps to find financial wealth “from scratch”. Banks provide various conditions for issuing such guarantees to firms, but more often it is issued as a loan. And for the organizers of tender auctions, this is more than a reliable guarantee. Even with a minimum guarantee amount, you can deposit it and then do your job (in case of victory) at the expense of the advance paid by the customer.
How else to make money on tenders
There are companies that participate in the struggle for the lot, but do not have the slightest experience in the service sector for which they are competing. They just lower the cost and wait. If their application wins, the companies either provide services on their own or sell the won lot to those who can actually fulfill the stated requirements of the contract. You may ask: is it possible to make money on tenders in this way? Yes, if you have good experience in such transactions.
On the forums you can find announcements of assistance in tendering. To win, you can use the services of such comrades who know their job. For a fee, they can win any deal for you. Even blacklisting and tender penalties do not scare anyone, because a successful deal completely covers any costs.
There are special business support centers that can advise on this issue, evaluate the capabilities of the company and even advance on government orders on favorable terms.
Goal to win
To participate in tenders and start making money on them, you need to work hard, set goals and achieve them. It is necessary to improve skills and develop. You can attend thematic conferences or chat with those who specialize in tenders.
Such an activity requires vital energy, since a large amount of information is processed in the head. Combining excitement and tranquility, you can enjoy success and victories.
To participate or not
So, now that you have learned how to make money on tenders, the decision about whether to bid or not is up to you. Such auctions are able to significantly increase your profits, give an additional front to work, a stable consumer.
Doubts that the winner has already been selected in advance and that the bid has been paid, can be hidden in a dark chest. New legislative rules for tendering made the selection process among all participants transparent.