Amazon are living proof that there are many advantages to reinvesting business profits. But following the UK Governments introduction of Financial Viability Risk Assessments (FVRA) into UK public procurement processes, would Amazon's approach result in disqualification from a public procurement process?
Companies such as Amazon who fund a business expansion with reinvested profits, avoid taking on excess debt and the corresponding interest payments that can threaten the future of the company.
By using reinvested profits rather than external equity, business owners can avoid diluting their ownership and control rights.
When a small business considers external investors, if they can demonstrate that they have reinvested their profits back into the company, this provides strong confidence in the ongoing success of the company.
But how is this approach viewed by public procurement. Would Amazon's approach see you disqualified. Read on to find out.
Naomi Clews is a UK based public sector procurement expert who specialises in helping private sector organisations to navigate the public procurement process. Find out more here.
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Procurement, Tendering, Business Skills