Founder of Innovo Networks, Damian Michael, explains how doing business with corporate clients is all about understanding – and following – the rules of compliance.
Coming from a corporate background, entrepreneur and founder of boutique ICT company Innovo Networks, Damian Michael shares the secrets to playing the corporate game – and winning top clients and tenders as a result.
1. Register as a vendor
“Corporates only do work with registered vendors, so step one is to register,” advises Michael. The relevant processes and documentation can be found on each company’s website.
Related: Legislation & business compliance
“You can’t skip this step, or expect to win a contract if you haven’t taken the time to fill in the paperwork and provide all the relevant documentation,” he adds. These include tax clearance certificates, your B-BBEE status, director IDs, shareholder agreements and your health and safety compliance.
“Understand that these are all mandatory,” says Michael, using health and safety compliance as an example.
“Remember, corporates are putting themselves at risk when they deal with SMEs. If a technician falls down and breaks their leg, the corporate is liable. As an SME, you need to understand compliance, and how corporate entities work. These are non-negotiables.”
2. Actively pursue clients
Once you’ve registered and are on the database, pay attention to tenders and contracts on offer. These might be announced on the website, but don’t expect a corporate to chase you – the onus is on you to build a relationship.
“When you register, you’ll find the names and relevant details of different procurement managers. Make contact with them and start building relationships. Communicate specials you might be running, or find other ways to make them aware of who you are and what you offer.
"Visit their offices and introduce yourself to the various department heads. Understand that they’re very busy, so respect their time, but also be aware that the more you stand out and they know you, the higher your chances of doing business with them.”
3. Don’t forget the gatekeeper
According to Michael, it’s particularly important to give a gift to the gatekeeper. “A gift opens doors; they’ll remember you. This can be a pen, a box of chocolates, or flowers. The point is that people love getting gifts. You can even take them out to lunch. The key is not to forget the gatekeeper – they hold the keys to your access to department heads decision makers.”
4. Ensure repeat business
“Corporate policies state that they must always obtain three quotes. When a procurement manager is choosing between unknown companies, price will often be the deciding factor, so you need to be competitive. However, once you manage to secure a contract, a second or third contract will be determined by how well you delivered on the first.
"Exceptional service will lead to follow-up work, and your next quote standing out from the crowd. Pay careful attention to what distinguishes you. Do you understand the organisation and are you serving their needs? What are their values? Are you delivering to those values? This is so important.”
Related: Setting up systems
5. Understand payment cycles
“If you choose to actively pursue the corporate sector, remember that their payment policies are 30, 60 or even 90 days. You need to ensure your cash flow can sustain the business while you’re waiting for payments. However, if they pay within 14 days they get extra BEE points. Let them know that. If they get enterprise development points working with you, make that clear as well.”