Prime
Gain a competitive edge in procurement
Some Small and Medium enterprises exhibits at the 27th Uganda International Trade Fair held earlier this month in Lugogo. Photo by Morgan Mbabazi
Starting a new business does not have to be a tedious process. But you must be aware of the legal requirements and process that will make it easy to manage a successful business in a convenient manner. What do you need to do at each step of the way?
When you think of starting a new).
Trade licence
The complex and competitive business landscape in Uganda poses an ever-present challenge for Small and Medium Enterprises (SMEs) when it comes to active participation in the public and private sector procurement processes. Although SMEs constitute a large proportion of enterprises in Uganda, only a few of these are fully integrated suppliers in procurement processes.
This is caused by a myriad of barriers including; scale of operation as well as relatedly low administrative, financial and technical capacity. These constraints are compounded by other difficulties that SMEs face in the market, including their relatively limited access to finance.
However, SMEs ought to not throw in the towel. There are ways to enhance your company’s competitiveness, some of which are highlighted below;
Formal registration
The Uganda Registration Services Bureau (URSB) has made significant strides towards easing the registration process for entities of all types in Uganda. SMEs should leverage this to formally register their legal businesses because this is the first step towards establishing an SME to compete in both government and private sector procurement tenders.
Focus on specific niche & grow it
SMEs should focus on excelling in specific business areas to create an identity in the marketplace rather than being a jack-of-all-trades. If you have a small client-base and are hungry for the next big deal, turning away potential revenue might seem irrational.
But if a client makes unreasonable demands, or has a history of non-payment, devoting more time to procuring and retaining more valuable clients might be a better option. It is also okay to say NO to a business deal where the SME lacks capacity to satisfactorily fulfil a client’s needs.
This also safeguards your company’s SME’s reputation in the market.
Use Social Media
The emergence of the social-media wave presents a huge opportunity for SMEs to market, promote and develop their customer value propositions. The increased adoption and utilisation of the internet affords SMEs the opportunity to showcase their services and make themselves visible for sub-contracting opportunities by bigger players in related industries.
Opportunities
Seek & exploit sub-contracting opportunities. In the face of stiff competition with established firms, SMEs have an opportunity to establish strategic partnerships with such big players in the respective sectors to secure opportunities for sub-contracts.
Develop bidding skills
The structure of a typical RFx will require the Supplier to evidence/demonstrate responsiveness to some key aspects in their submissions. These conventionally include; eligibility, administrative and technical responsiveness and Financial competitiveness of bids. As opposed to taking a ‘try and error’ approach, SMEs should clarify the requirements with the client to ensure their bids are aligned to the needs of these clients.
Finance options
Commercial banks have developed short to medium terms financing products suitable for SMEs. These include LPO financing, invoice discounting etc. SMEs ought to approach their bankers to identify more suitable financing/credit solutions to improve their liquidity and working capital position.
Executing these should amplify your efforts and bring both immediate and long-term success to your organisation.
Stanslus Kabuyaga, MCIPS – is the head of procurement at dfcu bank.
