Writing proposals for potential clients - time and cost
Discussion
We are in a service business (medical regulatory affairs) and no two projects are ever the same. Indeed, the variation between what potential clients may want means that we can seldom use an old proposal to model a new one.
Sometimes, it can be a considerable and time consuming task to put a proposal together. For example, we were asked by an overseas company to find a solution to testing their product, which involves using some very hazardous microorganisms. It took us a lot of effort to track down anyone that had the right facilities to undertake even part of this work. We then had to build our proposal, work out an estimate of time and hence what it would cost. This happened over 6 month period. n this case, the client was pleased we have presented a solution....but said they need investment to proceed, and could we help them with that too?
We are in danger of becoming busy fools in writing proposals and presentations for potential clients. It may be worthwhile, it may be a waste of time. It feels more than sales and cost of sales. Its all the more difficult as some companies may want 3 quotes, although they don't say that it is a kind of tendering exercise.
I therefore wanted to ask others in services industries how they manage this tricky balance? For example, do you charge for producing a quote? Or do you just say 'yes' to preparing a proposal most of the time.
Sometimes, it can be a considerable and time consuming task to put a proposal together. For example, we were asked by an overseas company to find a solution to testing their product, which involves using some very hazardous microorganisms. It took us a lot of effort to track down anyone that had the right facilities to undertake even part of this work. We then had to build our proposal, work out an estimate of time and hence what it would cost. This happened over 6 month period. n this case, the client was pleased we have presented a solution....but said they need investment to proceed, and could we help them with that too?
We are in danger of becoming busy fools in writing proposals and presentations for potential clients. It may be worthwhile, it may be a waste of time. It feels more than sales and cost of sales. Its all the more difficult as some companies may want 3 quotes, although they don't say that it is a kind of tendering exercise.
I therefore wanted to ask others in services industries how they manage this tricky balance? For example, do you charge for producing a quote? Or do you just say 'yes' to preparing a proposal most of the time.
Of course, you can try win work with CVs of the people to prove track record, and case studies which aren't a perfect match for the requirement, which then can be reused across multiple opportunities.
But ultimately you're in a marketplace against other companies and if other people are prepared to buy the work to grow their share you'll lose out.
Worth carefully tracking the cost of this activity and logging it against won work to ensure that it's really profitable.
But ultimately you're in a marketplace against other companies and if other people are prepared to buy the work to grow their share you'll lose out.
Worth carefully tracking the cost of this activity and logging it against won work to ensure that it's really profitable.
Not exactly the same but there are parallels.
When I used to work for a tech consultancy, we always charged for writing the proposal.
The first stage of any project big or small was to work out the size of the project and scope it all out. This effort was chargeable.
It ranged anywhere from 1 day up to about £100k depending on the size of the project.
If you are sinking meaningful amounts of work upfront that isn't really sales, I think you’d be better off charging T&E for it.
When I used to work for a tech consultancy, we always charged for writing the proposal.
The first stage of any project big or small was to work out the size of the project and scope it all out. This effort was chargeable.
It ranged anywhere from 1 day up to about £100k depending on the size of the project.
If you are sinking meaningful amounts of work upfront that isn't really sales, I think you’d be better off charging T&E for it.
In what I’ve done previously, the approach used was a combination of the two posts above.
Make it clear the team can deliver, describe in broad terms how you’ll approach it, and then have a clear scoping/research stage (chargeable).
The proposal wouldn’t be chargeable (many clients hate being told they’ll be charged for “a quote”), but the scoping that followed would be. In some cases the output of the scoping could be a detailed programme of work that could then be tendered by the client.
What you [i[don’t[/i] want to do/be used for is free consultancy that tells the client how to do it themselves (a surprising number will try or allow competitors to bid cheaper.
Make it clear the team can deliver, describe in broad terms how you’ll approach it, and then have a clear scoping/research stage (chargeable).
The proposal wouldn’t be chargeable (many clients hate being told they’ll be charged for “a quote”), but the scoping that followed would be. In some cases the output of the scoping could be a detailed programme of work that could then be tendered by the client.
What you [i[don’t[/i] want to do/be used for is free consultancy that tells the client how to do it themselves (a surprising number will try or allow competitors to bid cheaper.
I split into two ways, the first, if it’s straightforward, of course it’s free, in my game, everyone does that.
If it’s complicated and of some benefit even if they don’t proceed immediately, I charge for a feasibility study, and the cost for this study is the quote. That way you get paid if the job isn’t feasible for them in terms of cost, timescale, disruption etc. Not everyone does that in my game, but although cost sensitive, I’m not close led and major on a decent job done quickly the way they want it. Other go for only doing the job one way or on the cheap using less experienced people.
If it’s complicated and of some benefit even if they don’t proceed immediately, I charge for a feasibility study, and the cost for this study is the quote. That way you get paid if the job isn’t feasible for them in terms of cost, timescale, disruption etc. Not everyone does that in my game, but although cost sensitive, I’m not close led and major on a decent job done quickly the way they want it. Other go for only doing the job one way or on the cheap using less experienced people.
Welcome to my world! So much of what you've written resonates with me. We work near exclusively for the public sector. Almost every project we work on is as a result proposal writing and tendering.
I wouldn't say I use any formulaic approach but having done this for more than 30 years, the following tends to apply.
Be choosy. Before committing, weigh up the risk/reward ratio in terms of the time needed to prepare the proposal and the likelihood of winning it - and the profitability of the work if you do. Just because you can do something, doesn't always mean you should. Also consider if the project interests you and whether you want the project or the money the project will earn you.
In my case, tenders are published and it's up to me to spot them. But sometimes, I'm given a heads up where a potential client may say that they are going to publish a tender that I should keep and eye out for. These and any other opportunity where there's been pre-publish dialogue with a client I prioritise over those that I just stumble across.
Once you commit to make a proposal, go all in and write to win it. No half measures.
I start with checking compliance (once spent three solid weeks writing a tender only to discover that we were way below to the turnover/project budget threshold the day before the deadline! Never again!).
Then work up the price, schedule and methodology last. This does often require going back to adjust price and schedule but doing it in this order lets you know the level of profitability in the job early on.
As for the actual writing, there is an art to this. It will be a different set of challenges for you than it is for me but generally, clients really aren't interested in how brilliant you are - they want to know how you'll solve their problem - so tell them. If they do want to know how brilliant you are, they'll look at your website.
And use as few a words as you can get away with.
Managing the time and resources for proposal writing is always tricky. I've worked on consortium bids led by major, global consultancies with dedicated bid teams and even they struggle. It really just comes down to time management and resource allocation.
I'd also say mindset is important. I used hate writing tenders, with a passion and this showed in the quality of those I prepared. But I began to embrace them. I don't entirely know why or how this happened but these days, I rather enjoy the process. And if you enjoy it, the task becomes less onerous.
Although each proposal is different, there will be commonalities. I operate a tender library - a folder that contains case studies, bios, CVs, common statements and the like. These get updated regularly so they are always current. This means I'm not having to add a dozen projects to my CV or write up case studies the night before a bid deadline.
I'm sure there's a few other things I've missed but hope that's given some food for thought.
I wouldn't say I use any formulaic approach but having done this for more than 30 years, the following tends to apply.
Be choosy. Before committing, weigh up the risk/reward ratio in terms of the time needed to prepare the proposal and the likelihood of winning it - and the profitability of the work if you do. Just because you can do something, doesn't always mean you should. Also consider if the project interests you and whether you want the project or the money the project will earn you.
In my case, tenders are published and it's up to me to spot them. But sometimes, I'm given a heads up where a potential client may say that they are going to publish a tender that I should keep and eye out for. These and any other opportunity where there's been pre-publish dialogue with a client I prioritise over those that I just stumble across.
Once you commit to make a proposal, go all in and write to win it. No half measures.
I start with checking compliance (once spent three solid weeks writing a tender only to discover that we were way below to the turnover/project budget threshold the day before the deadline! Never again!).
Then work up the price, schedule and methodology last. This does often require going back to adjust price and schedule but doing it in this order lets you know the level of profitability in the job early on.
As for the actual writing, there is an art to this. It will be a different set of challenges for you than it is for me but generally, clients really aren't interested in how brilliant you are - they want to know how you'll solve their problem - so tell them. If they do want to know how brilliant you are, they'll look at your website.
And use as few a words as you can get away with.
Managing the time and resources for proposal writing is always tricky. I've worked on consortium bids led by major, global consultancies with dedicated bid teams and even they struggle. It really just comes down to time management and resource allocation.
I'd also say mindset is important. I used hate writing tenders, with a passion and this showed in the quality of those I prepared. But I began to embrace them. I don't entirely know why or how this happened but these days, I rather enjoy the process. And if you enjoy it, the task becomes less onerous.
Although each proposal is different, there will be commonalities. I operate a tender library - a folder that contains case studies, bios, CVs, common statements and the like. These get updated regularly so they are always current. This means I'm not having to add a dozen projects to my CV or write up case studies the night before a bid deadline.
I'm sure there's a few other things I've missed but hope that's given some food for thought.
It's bit of a 'catch 22' where the more expertise you have the more precise and costly the project can seem. Unfortunately many ignorant clients do not understand the detail of their own project and thus go for the cheapest option. Only for it to lead to cost and time overruns to correct the rubbish.
A clued up client may commission a subject expert to oversee the acquisition. Done it many times and you need a doctorate in diplomacy where senior staff are out of their depth but won't admit it.
Good luck.
A clued up client may commission a subject expert to oversee the acquisition. Done it many times and you need a doctorate in diplomacy where senior staff are out of their depth but won't admit it.
Good luck.
Our MO is
0) Contact (usually an e-mail or phone call arriving via someone refering us).
1) 30 Mins Teams or similar to discuss requirement which is generally provided at zero cost.
2) Initial feasibility study (generally a couple of billable days to determine the art of the possible, key blockers, elements which require research etc.)
3) Full proposal (usually two to four billable days which builds on the feasibility to identify work packages that will form the "job", expected costs, any mobilisation fees required etc. etc.). If proposal is accepted then we expect purchase orders at this point for at least WP1
4) Work Package kick off....
We'll bill work packages 50/50 or delivery + 30 days depending on the customer. For some we are essentially on retainer at a fixed monthly fee so things are a little different there and there is the odd grant funded program where we are sub-con.
In our industry our day rate is considered very high, a project involving us will generally come in at a lower overall cost with a higher level of reliability, performance and serviceability. Those who recognise that are the customers we want, those who think we are expensive and baulk at paying for the time required to properly advise and support them are not.
Full recognition that not all industries are the same and many require a level of zero cost pitching to win work but I have always been wary of those with great ideas and no budget to at least perform a basic feasibility - they are generally the ones who can absorb a huge amount of your time with no revenue resulting.
Is there any sort of customer pre-validation you can perform? It sounds like what you are doing is high technology and specialist so a few friendly but searching "is this funded or exploratory" type questions can go a long way prequalifying if a lead is likely to be a customer.
0) Contact (usually an e-mail or phone call arriving via someone refering us).
1) 30 Mins Teams or similar to discuss requirement which is generally provided at zero cost.
2) Initial feasibility study (generally a couple of billable days to determine the art of the possible, key blockers, elements which require research etc.)
3) Full proposal (usually two to four billable days which builds on the feasibility to identify work packages that will form the "job", expected costs, any mobilisation fees required etc. etc.). If proposal is accepted then we expect purchase orders at this point for at least WP1
4) Work Package kick off....
We'll bill work packages 50/50 or delivery + 30 days depending on the customer. For some we are essentially on retainer at a fixed monthly fee so things are a little different there and there is the odd grant funded program where we are sub-con.
In our industry our day rate is considered very high, a project involving us will generally come in at a lower overall cost with a higher level of reliability, performance and serviceability. Those who recognise that are the customers we want, those who think we are expensive and baulk at paying for the time required to properly advise and support them are not.
Full recognition that not all industries are the same and many require a level of zero cost pitching to win work but I have always been wary of those with great ideas and no budget to at least perform a basic feasibility - they are generally the ones who can absorb a huge amount of your time with no revenue resulting.
Is there any sort of customer pre-validation you can perform? It sounds like what you are doing is high technology and specialist so a few friendly but searching "is this funded or exploratory" type questions can go a long way prequalifying if a lead is likely to be a customer.
drdel said:
Unfortunately many ignorant clients do not understand the detail of their own project and thus go for the cheapest option. Only for it to lead to cost and time overruns to correct the rubbish.
A clued up client may commission a subject expert to oversee the acquisition. Done it many times and you need a doctorate in diplomacy where senior staff are out of their depth but won't admit it.
This is a very good point.A clued up client may commission a subject expert to oversee the acquisition. Done it many times and you need a doctorate in diplomacy where senior staff are out of their depth but won't admit it.
You don't want expert clients but you do want those at least informed of the services they are seeking.
Determining this is not always easy but is possible, often by considering the quality of the brief. A well written brief that uses technical wording correctly, with an appropriate budget limit and timescales suggests you have a sound client who understands the processes.
Videography is part of what I do and often see briefs where the client has just dumped stuff from a Google search, specifying detail that's not necessarily wrong but completely irrelevant in the context of the brief itself.
StevieBee said:
Be choosy. Before committing, weigh up the risk/reward ratio in terms of the time needed to prepare the proposal and the likelihood of winning it - and the profitability of the work if you do. Just because you can do something, doesn't always mean you should. Also consider if the project interests you and whether you want the project or the money the project will earn you.
In my case, tenders are published and it's up to me to spot them. But sometimes, I'm given a heads up where a potential client may say that they are going to publish a tender that I should keep and eye out for. These and any other opportunity where there's been pre-publish dialogue with a client I prioritise over those that I just stumble across.
Good advice, always worth being aware how the client has got their information to write their tender. It is not uncommon for there’d to be some advance dialogue that shapes their thinking. Whether/how the client uses external support to run their process can also be big differences in the probability of success. In my case, tenders are published and it's up to me to spot them. But sometimes, I'm given a heads up where a potential client may say that they are going to publish a tender that I should keep and eye out for. These and any other opportunity where there's been pre-publish dialogue with a client I prioritise over those that I just stumble across.
StevieBee said:
I start with checking compliance (once spent three solid weeks writing a tender only to discover that we were way below to the turnover/project budget threshold the day before the deadline! Never again!).
Is that always rigidly adhered to in the public sector? My brother complains that in the private sector they’ll quote based on customer requirements only for the customer to choose something non-compliant that was cheaper because that aspect of the spec “isn’t important for this job”.In my industry - electronic components - everything is done free, which can often means years of intermittent design-in support. In the UK it’s particularly difficult compared to other countries to get customers to even pay to have their own design support tools (hardware and software).
StevieBee said:
Be choosy. Before committing, weigh up the risk/reward ratio in terms of the time needed to prepare the proposal and the likelihood of winning it - and the profitability of the work if you do. Just because you can do something, doesn't always mean you should. Also consider if the project interests you and whether you want the project or the money the project will earn you.
This is the best advice here. You have to qualify prospects. Ask yourself:- is the requirement likely to go ahead or is it somebodies pipedream or is there a major factor that could influence it going ahead
- who else is bidding - who has what advantage
- how many others are bidding?
- what is this going to cost to bid relative to the reward?
- what is the clients selection criteria? If its just price who cares about words? If theres a minimum technical threashold, clear it but nothing more in the proposal
Thanks to everyone for sharing their own experiences, views and ideas. It is very useful feedback.
I think I will write an SOP that we can follow, a decision tree, to evaluate every opportunity with the aim of cutting down wasted time.
One of the biggest takeaways is to turn the tables and ask potential clients for a written request stipulating what they want. If they CBA to do that...they fail themselves.
I think I will write an SOP that we can follow, a decision tree, to evaluate every opportunity with the aim of cutting down wasted time.
One of the biggest takeaways is to turn the tables and ask potential clients for a written request stipulating what they want. If they CBA to do that...they fail themselves.
Sheepshanks said:
StevieBee said:
I start with checking compliance (once spent three solid weeks writing a tender only to discover that we were way below to the turnover/project budget threshold the day before the deadline! Never again!).
Is that always rigidly adhered to in the public sector? My brother complains that in the private sector they’ll quote based on customer requirements only for the customer to choose something non-compliant that was cheaper because that aspect of the spec “isn’t important for this job”.In the public sector, compliance relates to the business - things like the presence of policies on various functions of business (environmental, employment, customer care), insurances, years operating, technical capacity and the like. There's normally a huge list of yes/no tick boxes. These don't form part of the scoring. It's a case of either being compliant or not and if you're not compliant, you could have submitted the best bid in the world but it won't even get read.
The Turnover / Budget ratio is a little more variable. This is where your previous three year's turnover must be a multiple of the project budget. It's generally only stipulated as an absolute compliance requirement on large, longer term projects. So, if you're bidding for a £1m project but only turned over £150k last year, you'll not be compliant, regardless of whether you could do the work. There are permitted workarounds but none are ideal.
TUS373 said:
One of the biggest takeaways is to turn the tables and ask potential clients for a written request stipulating what they want. If they CBA to do that...they fail themselves.
.... and what their budget it is.May be different in your sector but in mine (visual communications, marketing, etc.), the options and permutations are near infinite so we need a budget to shape our proposal. I could pitch an idea that would cost £5k, £50k or £500k - each could be perfectly appropriate so knowing the budget they have is essential to make sure we're pitching something that's affordable.
The only exception is where a client has listed very specific requirements that can be priced accurately and thus a proposal can be evaluated fairly with others.
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