Business proposals form the lifeline of commerce for many small companies and consultants. Responding to a request for proposal (RFP) from a potential buyer can result in capturing more business or becoming drained on time and cash resources. Every entrepreneur must decide whether or not to pursue the opportunity with a business proposal. Learn what you need to consider before you delve in and respond to an RFP.
Making the decision to bid on a RFP is a critical one. The RFP process can be beneficial to all parties involved by providing clear expectations of the project and reduce risks. However, if you lose the bid; absorb the loss and move on. It's far better to do some early analysis and look at your upside potential. Look at these 8 points to help your RFP bid determination:
Determine the Budget: Before you make the decision to submit a business proposal, assess the size and scope of the bidding project. Find out how much the contract will be worth. Weigh the time and costs of submitting a business proposal against the revenue gain and term of the contract.
Assess the Competition: The size of the bidding pool will have a direct result on your closure rate. An open bid on the Internet with hundreds of competing companies can be less attractive than a ten company competition in your own backyard. Play the better odds.
Review Administrative Information: Bidders of an RFP will be best served by reviewing the administrative information of buying companies bid information. This information will often layout the guidelines to submit a successful bid. Be suspicious of vague information.
"For perceptive suppliers, lack of instructions may signal a weak RFP team and a confused or conflicted project. This potential weakness may influence whether they decide to continue with their proposal," says Bud Porter-Roth in "Request for Proposal: A Guide to Effective RFP Development."Bid Implications: Look closely at the prospect of winning the bid. Will the project add to your portfolio? Will you be able to leverage this contract into more business in the future?
Match Skills: Every project will require specific skills for execution. Before you decide to develop a business proposal, look at the skill set of your small business. Can you realistically meet the needs of the buying organization?
Request for Information: At times companies will be reviewing products or services in the marketplace for a project. These organizations are not taking bids at this stage and could be using the request to ensure their current supplier stays competitive.
Set Your Qualifications: Instead of responding to all RFP's in your marketplace, it's more prudent to determine what sort of projects and companies you want to work with. Does this particular client match your target market?RFP Timing: Consider the length of time required to write a business proposal. Building a winning proposal is more than "cutting and pasting" data to convince the company to hire you. Don't forget to look at your own timetable and avoid over committing.
Winning the business proposal game means looking carefully at your options and assessing the risks. Remember your time is far more limited than most buying companies. Respect it and business success can be yours.