what is the Business to Government model – WAU
To succeed in such a competitive market, you need to innovate in your sales strategies. Given the current requirements, knowing new business models can be a great differentiator. This is the case of B2G (Business to Government), which can generate new sources of revenue for your business.
When we talk about commercial relations, some models are better known and used in the corporate world, such as the B2B (Business to Business) and B2C (Business to Consumer) models. These are situations in which, respectively, a company negotiates its products and / or services with other companies, or directly with the final consumer.
However, a not so well-known model has become increasingly relevant with the need for public authorities to become more transparent, productive and efficient: B2G (Business to Government).
In practice, it represents business relations between a company and the government, and may involve services, products and other solutions.
Bearing in mind that the operation of this business model is not as simple as the other best known ones, you need to pay attention to a number of factors to implement B2G within your company.
Like any type of business relationship, it has its pros and cons, and that’s exactly what we’re going to show in this post. Check out!
What is the B2G model and how does it work?
Usually, commercial relations are made between two different companies or directly to the end customer, in the models known as B2B and B2C.
However, public authorities also need to “shop” in the private sector and, when that happens, B2G (Business to Government) model is established.
The main feature of this business model is the strong regulation for a transaction to be carried out. After all, we are talking about public resources – money originating from taxes and fees – and, for that reason, it is necessary to carry out a bidding process in search of the best conditions for the government.
The idea of the bidding is to prevent public money from being wasted on a company that is unable to meet government demand.
In other words, a series of rules and obligations are placed on the table and, among the companies that comply with these requirements, the one with the best cost-benefit ratio is chosen.
Thus, the one chosen to supply a product or provide a service to the government needs to follow a series of obligations to prove the ability to fulfill that contract.
This is the case for documents that confirm, for example, the technical and financial qualification from the company. The concept of digital government is becoming more common and, thus, the requirement also increases.
What do you need to know about B2G?
Although it is not a method used by many companies, it is important to know more about B2G, because can be an excellent alternative for those looking to innovate sales strategies.
Follow below some important points for you to be well informed about the subject!
The difference between B2G and B2B
A very common question is regarding the difference between the B2G and B2B models. After all, the government can be represented by a company, like a state-owned company.
Meantime, the main difference between these two commercial methods is, precisely, in the requirements and rules imposed when dealing with the public power.
A private company can hire the services it finds best, after all, the resources are private and of private interests.
When doing business with the government, you have to meet a number of requirements even to participate in a bid. Then, the choice is made with the analysis of the competitor’s capacity.
Therefore, before thinking about adopting B2G as a sales strategy, it is essential to know which regulations are applicable.
To make a sale on the B2G model, it is necessary to participate in a bidding process, which is supported by Law No. 8,666 / 1993.
In the document, all the rules for public tenders and contracts related to public administration are listed, either to carry out a work, either to sell materials, or to rent spaces, or for advertising.
Therefore, any of these types of commercial relations that are carried out with those of the powers of the Union, the Federal District, the states or the municipalities must follow the applicable regulations of Law No. 8.666 / 1993.
Some points must be highlighted among the requirements to participate in a bid:
- legal qualification: it is necessary to guarantee the legality of your company, presenting documents such as the social contract;
- technical qualification: through technical reports, your company needs to prove the technical capacity to provide the product or service in question;
- economic and financial qualification: it is necessary to show the government that your organization has the financial capacity to supply what is under contract;
- tax compliance: to negotiate with the government, you need to be up to date with it, right? Therefore, it is necessary to prove which taxes, fees and social charges are paid.
The advantages of this business model
The main advantage when adopting B2G as a sales strategy is, without a doubt, security of receipt.
Like any business, it is necessary to analyze each case individually and understand whether a particular municipality, for example, is up to date with other suppliers. Still, security is much greater when dealing with public authorities.
The easiness in the customer loyalty process – in this case, the public power – is also much greater.
Not by chance, when doing a job well done, your company’s reputation is enhanced, proving the technical qualification in practice. Thus, the chances are higher that your business will win more bids.
What is the importance of having a good working environment?
Regardless of the business model used within your organization, one thing is certain: without a pleasant working environment, the chances of success are less.
Today, it is important to worry not only about who will buy your products and / or services, but also those responsible for making sales happen.
In other words, it is necessary to ensure that its employees are provided with strategies that improve the workplace. It is essential to think of ways to improve the quality of life of the professionals who work in your organization. Offering products with exclusive conditions can be an alternative.
In order to invest in the organizational culture and climate and thus make the work environment more productive, it is possible to provide even better payment conditions or even rewards.
All of this contributes to your employee’s satisfaction and, consequently, for creating a more productive and efficient environment in your organization.
It is clear, then, how B2G can be another excellent tool for your company to succeed in such a competitive market.
If your business fits the rules and requirements of the model, can be an alternative to innovate your strategies and achieve more sales.
Now that you know what B2G is, you understand the main characteristics of the business model and the importance of providing a pleasant working environment for your employees, how about putting some actions into practice?
Stay a little longer with us and see now what B2E is and how it can generate value among your company’s employees!