Business Proposals
There are generally two kinds of business proposals:1. Solicited (formal) business proposalsand
2. Unsolicited proposals
1. Solicited Proposals
Solicited proposals are submitted in response to a request for proposal of one sort or another (see below).Calls for business proposals can be issued by both public and private sector bodies. They solicit directly and/or sometimes advertise for bids on projects, products, or other services, and state their requirements (sometimes in great detail) together with a bid deadline date.
In the public sector they are often required to go to tender for projects above a pre-defined value, but in the private sector there is no legal requirement to go out to tender. However it is regarded as being best practice togo out to general tender, or at least invite a minimum of three suppliers to tender.
There are various types of bidding / tendering processes including:
RFQ = Request for a Quotation which involves submitting a bid with a price quotation.
RFP = Request for Proposal whichinvolves submitting a proposal which might be specific or general and may or may not include pricing, although indicative pricing is generally expected. An RFP is often a precursor to an RFQ or ITT.
RFI = Request for Information. This is a challenging document to prepare since the potential client is looking to obtain information from both you and your competitors. On receiving this information they then generally decide whether to proceed and issue an RFQ/RFP/ITT. It is not unheard of for sensitive information to find its way into competitors' hands as a result of responding to an RFI!
ITT = Invitation to Tender which tends to be a formal bidding process including firm pricing.
Whichever of these applies the following activities are needed:
Preliminary Research: If you are to be successful you need to really understand the potential client including:
- what they do/offer,
- how they meet their customers' demands / requirements
- their position in the market,
- their differentiators,
- their competitors,
- their drivers and goals etc.
It is often helpful to put yourself in the shoes of your potential clients. This helps you to better understand their requirements and how you might best address them.
Arrange to meet with the management:
You should meet with whoever is the decision maker(s) regarding the request for a proposal if this is allowed under the clients rules for the RFP, and such a meeting helps with your research and real understanding of the client's business. Often they let on information which might not be in the RFP, but which can be extremely valuable in responding to the RFP. You need to clarify the client's goals, reasons for the RFQ/RFI/RFP/ITT.You should find out about the clients issues and problems so as to be able to address them in your response. It often helps to be blunt and actually ask for the size of budget allocated to this procurement etc, although be careful of the data since they may not give you an honest response! The meeting is also a valuable opportunity to get the potential client interested in your business and understand why you are different and better than your competitors.
Producing Your Proposal:
Responding to RFPs can be quite time consuming so allow plenty of time to complete your response before the deadline.
Very often in a formal RFQ or RFP or ITT the requirements are clearly stated, sometimes in great detail, so the format of your response is fairly straightforward. However you still need to get the same messages across whether within a constrained format or not. For instance your response should try to include:
a) State the client’s current situation highlighting their issues /problem
b) State how your offer addresses these issues. Ensure you differentiate yourself from the competition, which need not necessarily be on price, it can be on features offered, experience, capability etc. Note however that many in the public sector assess bids using use a marking system which splits the overall assessment between quality and price in a predetermined ratio (e.g. 80:20).
c) State your timescales, what you will provide and when, and pricing (broken down if appropriate)
d) You need to be clear about the terms and conditions of any resulting contract. In many requests the client will define their terms and conditions. Sometimes it is possible to negotiate these, but it clearly helps if you are able to agree the client’s terms and conditions without any amendments being necessary. In the event of the client not stating any terms and conditions you need to establish whether they will be applying their own, or whether they might accept yours.
d) The conclusion should summarisethe benefits of choosing your company Point out your successes with similar projects and provide references. In a large submission you might include an executive summary at the beginning which will contain much of what is in the conclusions.
e) The presentation of the response should always be of a high standard in terms of typeface, layout, quality of diagrams, and bound appropriately if physical, or in pdf if electronic. Make sure there are no grammatical, punctuation, or spelling errors.
2. Unsolicited proposals
An unsolicited proposal is one submitted to a potential client where the client has not requested one.
In order to ensure your proposal is read you need a covering letter which provides a compelling case as to whether they should engage further with you. If you can get all the necessary information in a short letter then great, but in most instances you will need to include the key information in an annex.
The letter should be addressed to the key decision maker, but if in doubt go to the top I.e. MD/CEO.
a)You should start bytelling them how you can improve their profitability by saving them money and/or make their operations more cost-efficient and /or increase their sales and revenues
b)The next paragraph should provide more detail about your product or service and describe how it saves money or is more efficient.
c)The third paragraph should explain why you are experts in your field, stating years of experience etc. If you can name past and current clients who have experienced cost savings and greater efficiency with your help then do so, but only with their prior approval to use their names.
d)The last paragraph should be short and ask them to call you or tell them you will call in a few days for an appointment.
e)Annexed information might include, detailed descriptions and/or specification of the product or service; pricing details, etc.
It goes without saying that you should follow up the communication, whilst they might still remember it!
MBF MEETING 2.3.16
BUSINESS PROPOSALS
DISCUSSION POINTS
1.Public or private?
2.Solicited or unsolicited
3.Types of solicited proposal
4.Deciding on whether to respond
a. Assess chances of winning
b. What is your differentiator?
c. Are you too small / financially insufficiently sound?
5.Efficient preparation of responses
a. Standard text (offering, experience, references, differentiation)
b. Tools & layout (templates, forms, headers/footers, etc.)
6.Researching for winning response
a. Meet with decision makers
I. Determining likely purchaser budget
ii. Determine their drivers / hot buttons
b. Differentiators
c. Pricing; whole life costs
d. Assess competitors and how they might trump you
7.Producing the proposal
a. Cut and paste
b. Refine to ensure proposal meets criteria
c. Make as bespoke as possible
8.Unsolicited proposal preparation
a. Highlight their issues
b. State how you can address these issues and why you are different
c. Price discounts / whole life costs etc
d. Timescales
9.Terms & conditions
a. Deliverables
b. Timescale
c. Client commitments
(e.g. provision of data or materials, review meetings, response times)
d. Contingencies
e. Payment terms and methods
f. Signature & note of authority to sign on behalf of company
10.Executive summary / conclusions / annexes
11.Cover letter
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