Business Opportunities and Tenders

Business Opportunities and Tenders

Vodacom Trade Direct

Vodacom Trade Direct is our business-to-business online portal which allows both buyers and sellers to come together in a secure and reliable online environment. It gives you access to a world of new opportunities to expand your businesses. Finding new and innovative ways to grow, connect and empower your small business to be ready for business in our ever-changing environment.

For more information about the benefits of Vodacom Trade Direct for your small business, click here.

What is a tender?

A business tender is an offer to do work or supply goods at a fixed price. The tender or bid process is designed to ensure that the work to be done is given out in a fair way. There are a number of policies (known as 'procurement policies') which are used as guides on how to make decisions on which tender to accept. Although price is very important in the decision on which tender or bid to accept, it is not the only factor taken into account.

Once the client entity accepts a tender, it is binding on both parties. This means that the person or company that won this business opportunity has to provide the goods or services in the manner agreed to and at the price offered, and the client entity must pay the agreed price at the agreed time. In other words, once accepted, a tender is a binding business contract.

Even if you don't win the work this time, writing a tender can clarify your aims, strengths and weaknesses and you can learn for next time by asking for feedback on your bid. It raises your profile with the client and helps you learn about the client’s needs.

Tenders in South Africa are a lucrative source of income for small business, but can be challenging to negotiate, particularly since legislation has changed, and requirements differ between organisations and government sectors. Getting the process right not only saves time and effort but has the potential to set up lucrative income streams.

The Minimum Requirements For A Start-Up Business To Tender

The Preferential Procurement Policy Framework Act dictates that Organs of State enforce certain minimum requirements when awarding tenders, to verify that an enterprise is legally operating and is tax compliant.

These are:

  • Company registration documents.

  • Be registered on the Central Supplier Database

  • A tax clearance certificate: The business must be registered with SARS for Income Tax purposes.

But remember that to have a registered company and to have a business, is not the same thing. These items are only the beginning. Once you comply with these three items you must actively start doing business. In other words, your business must be a running.

How do you find tenders?

You can identify public-sector contracts by:

  • Following up contract notices published in newspapers and trade magazines;

  • Getting the government tender bulletin;

  • Searching department websites;

  • Or alternatively, one can access the Online Tenders website at a nominal monthly subscription cost to get the latest tenders and business leads in SA.

Online Tenders

Online Tenders is a tender notification service that researches business tenders in South Africa and business leads throughout the country, classifies and matches the tender that is relevant to your exact business requirement. These tenders are then emailed to you on a daily basis or you can simply access the Online Tenders website for further tender information.

Should you bid for a tender

Preparing business tenders can help you to win big orders, but it can also be time-consuming, cost money and takes up valuable resources. If you don't get the contract, the money and time spent is usually lost, so you need to weigh up whether or not a tender is worth bidding for.

Key points to consider
  • Get hold of the bid documents and analyse them.

  • Make sure you can match the technical, skill and experience requirements.

  • How much will it cost to prepare your bid?

  • Would the work fit in with your strategy and positioning of your business?

  • Estimate the costs of fulfilling the contract and whether or not you'd make enough money to justify it.

  • Assess how the contract would affect your other work, staffing and ability to take on other new business opportunities.

You also need to consider how important the client is to your business contracts. Is this a good potential client or one you don't want to offend by not tendering? Try to understand things from the client's point of view.

Documents you will need to submit

The forms usually required for national and provincial business tenders in South Africa are the following:

  • The Bid: In this document you agree to be bound by the terms and conditions of the tender or bid.

  • Tax Clearance Requirement: Your taxes must be in order to be successful with your tender or bid. This document has an 'Application for tax clearance certificate' form attached to it. You have to complete this form and hand it in at your nearest South African Revenue Services (SARS) office, to get a tax clearance certificate. You must then attach the original tax clearance certificate that you get from SARS, to the tender or bid documents. This certificate serves as proof that you are not in arrears with your tax payments.

  • Price and motivation: Which of these documents you complete depends on the subject of the tender. In this form, you motivate your price, by describing the product you will supply or the experience of the person who will perform the service. This form is often amended for the particular tender, so carefully check which one you need to complete.

  • Declaration of Interest: This is the document in which you declare whether or not you have a relationship (friend, family, business leads) with anyone who works for government. This is so that those people are not involved in awarding the tender in any way, to avoid corruption.

  • Preference certificate: You must fill in the form for tenders even if you are not claiming any of the preference points.

  • Contact form: This is the contract that binds the parties should the tender be successful. There are different forms for different contracts.

There may be other forms to fill in for a specific tender or bid. These should be included with the tender or bid documents that you receive.

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