This is a guest blog by the team at Supply Change. Supply Change have partnered with SSE and Brewin Dolphin on the procurement readiness programme and their upcoming Social Procurement Festival gives social enterprises the opportunity to meet new buyers and learn about social procurement.
For many smaller social enterprises, competing for public sector contracts can be challenging, with larger scale contracts proving particularly difficult due to the limitations in resource capability and purchasing power. Increasingly however, a solution has been found in the form of social enterprise bidding partnerships, or consortia. By collaborating on bids, smaller organisations have the opportunity to deliver at scale, and are better able to compete with larger businesses.
There are other advantages to be gained when social enterprises team up with their peers. These include the ability to combine budgets, to learn and share complimentary skills, to improve service quality, and to reduce overhead costs. But consortia with other social enterprises also require additional time and resource commitments, and can include difficult compromises. While this should not be off putting for social entrepreneurs, these arrangements should be entered into with care. Here are a few things to consider when partnering up:
There are two routes to forming a consortium: Lead Body and Special Purpose Vehicle (SPV). The lead body option requires one organisation to work as the primary contractor, subcontracting out services to other members. This can be quicker to set up, with fewer overheads, but liability and control are unequally shared. SPV involves forming a new company, with member organisations acting as shareholders. The setup often takes longer, in terms of establishing policies and track-records, but SPVs usually offer members more flexibility and equality.
Partners are everything
The success or failure of a consortium generally rests on the clarity, viability and unity of the partnership. This means that choosing the right partners, and then getting the relationships right, is key. In particular, it is crucial that you are open and inquisitive about one another’s businesses and backgrounds (financial stability, etc.), and that you take time to build strong relationships, share core values, and are clear from the offset about the goals and risks of the consortium.
Where to start
Networking with and learning about other social enterprises who might be suitable partners is an important first step towards forming a consortium. By building up a wider picture of peer organisations—their values, the way they work, the services they provide—and by establishing strong relationships, you can begin to select and approach potential partners. Although it can be difficult to find the time and space to build networks of this kind, there are key events which support this, such as this month’s Social Procurement Festival.
Managing a consortium
In order to mitigate some of the risks, it’s important to be proactive and clear in how you manage the partnership and your own enterprise. This should include receiving expert help when appropriate (legal counsel, brokers, etc.); clearly documenting the responsibilities of different members; and putting in place evaluation and monitoring processes. You should also take care not to neglect your own organisation in the meantime.
With all this in mind, setting up a consortium should be viewed as an exciting and relatively untapped opportunity for social enterprises and SMEs. So long as they’re approached carefully and with due diligence, collaborations like these can offer organisations the opportunity to compete with larger businesses, and to expand their scope, skills and network. Consortiums should also encourage social enterprises to work more coherently as a sector, and to better define their shared values and aims as a movement.
Interested in building your network and meeting prospective partners? Sign up for the 2022 Social Procurement Festival (23rd-24th March) and use the code SSE22 for 20% off your ticket price. It’s also a great opportunity to learn and share best practice for social enterprise procurement, social value activities and to network with social enterprise suppliers and committed buyers.