Opinion Column: How To Do Business With Government

The three most prominent business models are: Business to Consumer (B2C), Business to Business (B2B) and Government to Consumer (G2C). These three models are helpful when one is positioning him/herself in the market. There is however a fourth business model that is often not sustainable for reasons that I will highlight in the next paragraph, which is the Business to Government (B2G) model. In a B2G model, an entrepreneur targets government as a major consumer of his goods and services.

Kenya has forty eight governments in total, 47 seven of which as are devolved at county level. This implies that 48 entities plus other government agencies, departments and parastatals that procure supply opportunities every fiscal year. These tenders are awarded on merit, as it should be, and there are certain requirements in terms of regulatory compliance, experience, skills and capability to supply goods and/or services to these governments and their agencies. Therefore, a sales department in B2G model is supposed to be keen about tender openings by governments. This can often be done by checking tender notice websites, daily newspapers, alerts from networks with civil servants and email enquiries. Another important step to winning government tenders is by applying to be pre-qualified as a supplier or contractor or a professional service provider in as many government departments as possible. This increases your chances of winning tenders for recurrent yet short government projects.

Government tenders may however be unstainable due to fluctuations in the government’s demand curve, bureaucratic payment procedures which may lead a business into debts, political influence in winning and executing government tenders, unfair competition in winning the tenders and difficulty in pricing goods and services supplied to government as prices are not set by forces of demand and supply as it should be in a free market. If you want to do business with the government, aim at taking tenders that you are capable to handle in terms of magnitude and working capital requirement. It is advisable not to take a pure B2G model as a way to mitigate the risks that come with doing business with and for the government.

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