Business proposals prepared for clients in the private and public sectors are often radically different in style and content. Let me discuss them separately.
Business Proposals for Private Sector Clients
Vendors and consultants offering their services and products to private sector clients generally have few constraints regarding the structure and style of their proposals. Since they have such wide latitude, it’s prudent for them to use this freedom to advantage.
Proposals to private sector clients/customers generally have the same major headings:
- Executive Summary
- Your Understanding of the Customer’s Situation
- Goals and Objectives
- The Roles of the Parties
- Project Plan
- Project Team
- Fees and Expenses
The actual headings need to be personalized to each customer’s situation. Even the number of major headings needs to be adjusted as required. Some companies, for example, add a section titled “Why Chose Us?”
Proposals for contracts up to about $3,000,000 can often be captured in 40 pages or less. This is generally the maximum amount of content a reader can absorb without becoming weary of reading a proposal. In addition to this core proposal, vendors/consultants are free to add as many appendices as necessary in order to substantiate their positions. Binding bulky appendices separately from the main body of the proposal emphasizes their role as supporting materials and optional reading. It also helps proposal evaluation teams allocate various parts of their reviews to appropriate team members.
Executive Summary – Although the title suggests that this section is a summary of the full proposal, it’s not. Instead, it’s a brief overview of the major issues that will capture the readers’ imaginations. It provides compelling arguments that sell the reader. I usually write that section last.
Your Understanding of the Customer’s Situation – Everyone wants to be understood. In fact, being understood is probably the most important part of any relationship. Further, the requirement to submit a proposal is an incontrovertible sign that the client/customer is looking for a relationship and not just a transaction. A succinct statement of the customer’s situation goes a very long way toward selling a product or service.
Goals and Objectives – These two are quite different from each other. Goals are lofty, distant, and, perhaps, even unachievable. They stir the imagination and establish aspirations. They are fundamental to the organization’s vision. Objectives, on the other hand, are achievable in a limited amount of time with finite resources. Once the job is done, it will be obvious to all the stakeholders whether the service/product provider has reached the objectives contracted. Objectives define milestones along the way toward the goals.
The proposal needs to be cautious when defining the objectives of the engagement, product, or service. It needs to establish clear statements of the results to be achieved or the products to be delivered, the time frame for doing so, and the criteria stakeholders should use to assess completion. A proposal is a legal document. The objectives spelled out in the proposal not only help sell the contract, they can also be used in court against the contractor. Objectives need to be very well crafted.
The Roles of the Parties – In many situations clients are required to do very little. For example, a patient simply needs to show up in the dentist’s office. A car owner needs to do little more than deliver his car to the mechanic on the appointed day. In more complex contracts, clients need to actively participate in the process to ensure the delivery of the product or service. In these cases, contractors need to articulate their clients’/customers’ role in the delivery of the product or service. The more specific the statement of the role of each party, the better the eventual working relationship is likely to be. Clear role statements can also protect contractor from charges of failure to deliver in the event their clients don’t play their roles effectively.
Deliverables – Every contract results in some sort of deliverable. Car salesmen deliver cars. Mortgage brokers deliver mortgages. Consultants deliver written reports, presentations, or counseling sessions. Proposals need to identify what those deliverables are going to be. Describing the deliverables sets expectations that help sell the contract and, at the same time, hold the contractor responsible for delivery.
Project Plan – Project plans identify the major and minor phases and steps involved in the fulfillment of the contract. If the ‘project’ is simple – like a dentist appointment – an appointment slip is sufficient. In large or complex projects, the contractor may find it useful to prepare a Gantt Chart or a PERT diagram.
Project Team – In many cases the project team consists of only one person; there is no need to go to great lengths to discuss that person’s credentials. Large projects can include a large number of contractor staff. In these cases, it is essential that proposals identify each of the members of the project teams, the roles each member will play, the qualifications of the team members, and the amount of time each will contribute.
Fees and Expenses – No proposal would be complete without a statement of the costs. Sometimes these costs are described as hourly costs or per diems. In other cases (particularly when the per diems are liable to be be perceived as very large) the contactor may simply state fixed costs without further detail. In cases where the costs of materials and labour are both significant (e.g., a home renovation or a road construction), contractors may opt to quote the component costs independently. As a rule, however, contractors are well advised to provide as little detail as possible in their proposals.
Business Proposals for Public Sector Clients
Public sector proposals generally do not offer the same latitude as private sector proposals. Public sector agencies generally issue highly structured Requests for Proposals or RFPs. These RFPs can even specify the numbering system the proponent is to use in its proposal. It often has a list of detailed questions that call for detailed responses. This ‘question and answer’ format provides little or no opportunity for proponents to highlight their ‘unique selling points’ and differentiate themselves from their competitors. The RFPs are designed to minimize the effort the RFP review teams need to invest in their evaluations.
The design of these RFPs is intended to disqualify proponents easily and defensibly. They are not designed to find optimal solutions. Rather they are designed to protect the agency from accusations of favouritism or corruption. This is a natural development – perhaps even a desirable development – considering the history of public sector contracting.
Nevertheless, these RFPs generally provide limited opportunities for proponents to explain their unique advantages. Proponents need to take maximum advantage of these opportunities because these are the points at which proposals move passed the rejection hurdles to providing compelling sales arguments that will lead to the proponent being selected for the contract.
Proposals Are Key to Winning Business
Contracts are nearly always granted to proponents with the best proposals, not the proponents with the best solutions. This distinction is vital to growing business. The more formal the evaluation process is, the more important the proposal. Writing the best possible proposal makes all the difference between winning and losing business.