The public sector is a potentially lucrative source of business, as the UK spends about £222 billion a year on procurement.  There are also certain advantages to working with public sector organisations; they are required by EU law to be transparent and fair in the way they choose suppliers, they are very stable and reputable, and usually make prompt payments.

Small and Medium Enterprises (SMEs), which constitute 99.9% of UK businesses, are potentially major suppliers to the public sector.  SMEs often provide higher quality specialist or tailored products and services.  Many supply new and innovative solutions, and they usually have a more personal and flexible approach.  Additionally, more suppliers usually results in more competition and therefore better value for money. 

SMEs and public sector purchasers should be a match made in heaven, but research (e.g. the Glover review, EC’s Code of Best Practices for SMEs), has shown that SMEs still face a number of difficulties competing for public sector contracts, including:

In spite of these obstacles, SMEs can and do win public sector business.  What is more, there are initiatives aimed at reducing the barriers that SMEs face when competing for public sector contracts:

So, both SMEs and public sector bodies can improve their practices so that both parties can reap the benefits of working together.  Size does matter, but it’s what you do with it that counts!