5 models of making money on public procurement during the crisis
Today in Russia, one of the most popular types of commercial activity is a business based on public procurement. Government purchases are orders from the state for the supply of certain goods and services at a certain place and time. The placement of such an order takes place on special sites, and the choice of its future performer is on a competitive basis.
How to start a public procurement business and how to choose a niche?
In order to choose your niche in the public procurement business, you need to familiarize yourself with a large number of different documentation. Usually specialized organizations help in solving this issue. But if there is no additional money for this, you need to allocate time for this and tackle this issue yourself. The most effective platform for starting in this area of activity is electronic auctions. They often do not have much competition. After the entrepreneur chooses the tender he is interested in, he needs to apply for participation in it. In addition, you need to collect a package of certain documents.
Every commercial organization can submit its offer at such an auction. In order to get admission to participate in such a competition, you need to know all the stages of its holding.
In order to open a public procurement business from scratch and earn up to 100,000 rubles. per month, you need to familiarize yourself with the basic principles of work in such a field of activity.
The state is like a large organization that needs to be supplied with certain services and resources. Since it is involved in all spheres of human activity, there are a lot of options for choosing a niche. An aspiring entrepreneur can safely consider areas such as:
- industry ;
- medicine and others.
To participate in the tender, a commercial organization must comply with all the rules and requirements set by the state. The opening and the more transparent the activities of the enterprise are, the greater the chances of creating a business on public procurement.
In this case, any tricks and tricks, even if they are legal, will badly affect the image of the organization in the eyes of the members of the tender commission.
What is open and closed competition?
The main ways to get money from the state for public procurement:
- Sell your goods, works, services, real estate.
- Organize the contract execution process. Buy from manufacturer and resell to customer.
- Provide brokerage services for the customer or supplier.
- Become a subcontractor under a government contract.
Crisis is an opportunity
Unlike B2B and retail, tender sales are not closed during crises. State needs are met in any conditions. Now, despite the crisis and quarantine, applications can be submitted for more than 160,000 tenders (currently at 20. 4. 020).
Here are the main benefits of participating in public procurement:
- Huge market - more than 9 trillion rubles.
- The state orders a variety of goods, works and services.
- Start costs are small.
- Free search, information, analytics.
- Minimal risks. State guarantees.
- Simple rules of participation.
Another reason to participate in public procurement during the crisis is that the state reduces the financial burden on suppliers. This makes participation even more beneficial. Due to coronavirus:
- reduced the amount of contract enforcement;
- increased the volume of small purchases;
- increased the price of one direct contract;
- gave more opportunities for advance payments.
They plan to increase the amount of advance payment on state and municipal contracts up to 50%. This means that most of the money for the execution of the state contract will be given by the customer. You will not have to invest your own funds or take out loans and pay interest to the bank.
How to make money in public procurement during a crisis
Is it possible to build a public procurement business from scratch? Yes, absolutely. Is it difficult to do it? Not if you know how. Public procurement for small businesses and mid-sized entrepreneurs can be invaluable. And within the framework of this article, various aspects of this case will be considered.
Entrepreneurship lives on the production of goods, trade and the provision of services. All this is needed by the state, which can become a regular customer. For business, this situation is an excellent way to expand its sales market and increase turnover. You can often come across the opinion that it makes no sense to contact the state, because there are kickbacks and other manifestations of corruption all around. But the real situation is quite strikingly different from the mythical image. Yes, from time to time you will have to meet with significant competition. But if you offer favorable terms, consider that the contract is already in your pocket. And electronic auctions, where all the conditions and needs are indicated, are of great help in this. In this case, the competition depends on the amount of the proposed contract and the field of activity. And a small inspiring fact: about 40% of all electronic auctions are declared invalid. And the reason is ridiculous - there are no participants willing to participate in them. Suspicions (not groundless) may arise about some specific points, and they really do take place, but not on such a scale. As a rule, such a situation arises precisely because there really was no one who would be interested.
Choosing your niche
Initially, you need to familiarize yourself with a large number of different documentation. Specialists can help with this for a fee. If there are no free funds, then you will have to figure it out on your own. And this article will help here. In addition to it, you can pay attention to various special manuals and training courses that are conducted by public organizations (for the most part) and state business support services. To begin with, you can pay attention to not very large, but still the most real electronic auctions, where there will be a small number of competitors. After that, you must send an application for participation in it and attach all the necessary documents. The tender commission will choose the most advantageous offer (the one that meets all the requirements and has the lowest price). With a reasonable approach, government procurement for small businesses turns into a lucrative source of income.
How does it work?
Within the framework of the article, much attention will be paid to electronic trading platforms. Why? The fact is that thanks to them it is very convenient to search for interesting offers. In addition, it does not take much time to submit an application in this case. And the open form of work on the basis of the auction allows you to monitor the honesty of the commissions and complain to the appropriate authorities. But still, one point should be considered. Any commercial organization can take part in tenders, but for admission it is necessary to know the rules and work algorithm. Therefore, the following will be carefully considered:
How it works
If you are interested in, say, a public procurement business from zero to 100 thousand rubles or a million (to begin with), then you will not be able to do without this moment. What should be discussed initially? About interaction. The state can be viewed as a specific commercial structure. And she needs certain services. Since the scale of the work and influence of the state is truly enormous and affects almost all spheres of life, then the list of necessary services is practically unlimited. Moreover, any state institution periodically needs outside organizations - agriculture, mechanical engineering, space, education and others.
But there are strict requirements for tenders. And first, the process of choosing a contractor for the production of goods and the provision of services should be transparent to the maximum. Once the organization meets the requirements, it can offer its own conditions and its own price. In the case when it is the most profitable, the order is received. It should be noted here that, despite the apparent simplicity, there are often cases when organizations resort to legal tricks that influence the choice of a contractor. To avoid becoming a victim of such circumstances and to build a successful public procurement business, it is necessary to carefully study how this system works. In the Russian Federation, legislation has approved several types of trading.
Open and closed contests
The first option is the most common way to organize government orders on the territory of the Russian Federation. Its essence lies in the fact that all interested parties are informed about the order through the media: print newspapers, on thematic sites. In general, everything is being done to find the optimal contractor. For an open tender, a large amount of material is being prepared, and all conditions are documented. Applications are received throughout the month. After that, an autopsy procedure is carried out, and the founding commission decides who will carry out the order. This approach, however, requires regular monitoring of the relevant sources, which is not very convenient. A feature of the closed tender is that the customer independently establishes a circle of performers that can cope with the order. This approach is practiced in cases where you have to work with confidential information or the work performed is very specific. Although it can also be used when it is unprofitable to familiarize multiple performers with it.
Every sales manager, entrepreneur or freelancer dreams of increasing the sales of their products, works or services. But, not everyone uses for this such a method as participation in public procurement. And in vain, after all, according to the Unified Information System in the field of procurement, by November 2021, 2.9 million notices of procurement were registered for a total amount of 7,299,596.5 million rubles. And this figure is growing every year.
Public procurement is a complex process, but it has clear logic and clear rules. If you delve into it, understand these rules, study the main nuances - you can provide yourself with both good additional income and the main source of income. An extremely attractive feature is that you can try your hand at this business without prejudice to your current activities - in your free time from work or study.
I warn you: those who are looking for a way to get rich quickly in public procurement without making any efforts will be very disappointed. Start with theory, get at least a basic understanding of the principles of the functioning of this area.
It is not at all necessary to have your own company or multi-million dollar start-up capital. You can start making money on government purchases with minimal, practically zero investments. For the first time, a computer connected to the Internet and basic knowledge that can be obtained on my channel will be enough for you.
Where does the money come from?
Government agencies are constantly buying something. What goods, works or services would not be discussed - paper clips, soccer balls, construction contracts, cauliflower, computer equipment, rocket engines - all of them are ordered only through various kinds of tenders. If the purchase is not related to a state secret, anyone who has the status of a legal entity, or is registered as an individual entrepreneur (IE) and even an individual can participate in it.
With the advent of the accessible Internet and the emergence of electronic trading platforms, it has become even easier to participate in public procurement. Almost all opportunities for doing business with the largest customer of goods, works and services - our state are available online.
This customer, which is represented by hundreds of thousands of budgetary organizations, buys almost everything you can imagine - wholesale and retail. Offer the best value for money and the contract is yours. No matter how the economic situation develops, there has always been, is and will be money in the budget to pay such bills. You will not be left behind! It remains only to carefully study the "rules of the game" and find your niche.
How you can make money from this
In theory, anyone can help the state to obtain the necessary goods, works or services (TRU). The approximate salary of a participant is the difference between his expenses for GWS (cost price) and the amount that a government agency will pay under the contract. Let's look at a specific example.
Suppose a customer has posted a notice to buy a small amount of lumber in your area. The initial price at which the tender is put up for an electronic auction is 50 thousand rubles. You call the nearest sawmills and other enterprises that sell similar products and ask about the price of the issue.
Opportunities and Recommendations
The largest purchases are carried out by the Federal Air Transport Agency, the Moscow City Construction Department and the Ministry of Defense.
Winning a tender and selling products to government agencies is an excellent opportunity for medium and large businesses. For this, the company takes part in the auction. But is it possible to make money on tenders in Russia? The state is one of the largest customers, and you can make good money by supplying your products to public institutions. Federal Law 44 "On Public Procurement" regulates the entire process of tendering, so corruption in this area is minimized. Earning money on government purchases from scratch has become a real and profitable business today.
You can find suitable applications for the supply of products on the official website of the "Unified information system in the field of procurement". The state is the largest consumer, so even novice businessmen can find a suitable tender on the website and take part in it.
Both legal entities and individual entrepreneurs can participate in the auction. Moreover, according to the law, customers must annually give 15% of purchases to individual entrepreneurs.
According to the law, the contractor is selected through tendering. They come in different types.
If a contractor is selected in an open way, then information about the order is distributed in all possible channels: in the media, on the official website, and so on. The terms of the competition are clearly spelled out and documented. As soon as the acceptance of applications is completed, the commission determines the winner.
Only companies approved by the customer can take part in the closed competition. This type of bidding is carried out if the information cannot be given wide publicity or the order is highly specialized.
Electronic trading is popular now. Contractors can easily get a tender from another region. Submission of the application and tracking of results takes place on the Internet.