Are you trying to win all of your future proposals, or just the one on your desk? Are you thinking short-term or long-term? Are you trying to do a proposal and get back to your other work, or are you trying to develop an organization?
Some of the things that drive how many people are needed to win a proposal are fairly obvious:
- The amount that needs to be written
- The schedule
- The size of the production effort
But some of them are less obvious, and these tend to be the ones that impact your ability to win the most:
- The range of subject matters that need to be covered. This is not just a technical concern. Do you have someone involved who knows how to create a detailed transition plan for this type of project? What about the staffing plan, quality control plan, etc.? Who knows your company’s projects well enough to select, edit, and update your past performance project descriptions? How many people do you need contributions from in order to address all the required topics?
- The difficulty of designing the offering. Can one person decide what to offer and describe it for the proposal? Or do you need a cross-functional team?
- Layers of involvement. How many people must be involved in reviews, approvals, and decision making? Do you need section or volume leaders?
- The availability of information. If you know the customer’s preferences and your bid strategies proposal writing is straightforward. If you don’t, you’ll have to add research, deliberations, meetings, etc. to decide what to say in the absence of the information you need.
- The maturity of your proposal process. Are you making it all up as you go along? Is your process well-defined and efficient? What will it take to administer the process or invent it on the spot?
Then there are organizational strategies and productivity concerns
Should subject matter experts deliver finished writing, or should they be paired with writers who are specialists? Should you hire junior staff and train them, or hire experts? Should you use consultants? There is no answer to these questions that is right for everybody. But you will usually find a mixture of proposal specialists and non-specialists involved. And it shows the importance of productivity. The number of people varies with their productivity, and how productive someone is going to be at proposal writing is extremely difficult to predict.
How many hats can one person wear?
There are a number of roles that the business opportunity pursuit process is typically broken down into. In large companies, each role may be staffed by a single person. In small startups, each person typically has to wear multiple hats.
Defining roles is important, even when one person fulfills multiple roles, because it prepares the organization for growth. It begins the process of defining tasks by roles instead of by people. Small businesses often make the mistake of building their process around the people they have instead of how the process should work.
Proposal staffing is an ROI decision
The money a company spends on proposals should not be treated like it’s an expense. It is an investment. The amount you spend depends on how much you can invest, and what return you are seeking on your investment. The way you staff the proposal function should be based on how much you can invest in it, and you should do it in a way that maximizes the return on your investment.
You’ll make better decisions if you track your ROI. If you are seeing a high rate of return, you might decide to increase your investment until the return levels off. Everything you do in proposal development should be correlated with your win rate in order to achieve a continuously improving ROI.
As an example, understaffing the proposal function does not save you any money if it reduces your win rate. There are ways to do proposals with fewer people, but they often come at the expense of a lower win rate. A small difference in win rate can cover the cost of a lot of proposal effort. Learn to do the math.
On the other hand, if adding staff isn’t increasing your win rate, the additional staff are hurting your ROI and you need to give attention to something other than the amount of resources if you want to increase it. Learn to track performance of the proposal function against win rate in order to know how to maximize your ROI.
Your goal should be to continuously increase your win rate, since this has a direct correlation with the ROI of your proposal function. You should be able to assess how everything correlates with your win rate. Sometimes winning isn't just about staffing a proposal. Sometimes winning requires organizational change. Which has the greater impact?
- Process changes
- New staff
- Proposal tools and software
- Availability of information
- Review scores
- Status of offering design
- When you start the proposal
If you are reading this, I challenge you to quantify how these things correlate with your win rate. If you can’t, you’re only guessing at what to do next to boost your win rate.
Budgets are a necessary evil
Regardless of your win rate, it’s important that the cost of the proposal function not increase in proportion to your company’s revenue. This is because the proposal function is usually overhead, and if the company has to increase the percentage of overhead used during pricing, it can become uncompetitive.
This is where budgets come into play. One of the things a budget does for a company is that it tells people how much overhead they can spend before it negatively impacts their competitiveness.
The good news is that you can increase the total amount spent on overhead (and by the proposal function, although it competes with other priorities) by increasing the amount of revenue. And the proposal function can increase the amount of revenue by increasing the win rate.
If you know what correlates with your company's win rate, then you are in a much better position to make informed decisions regarding how to budget the proposal function.
Instead of zero-based staffing, try ROI-based staffing
Trying to calculate the number of people needed to produce the number of pages to submit is at best a scientific guessing game. And it is rarely that scientific. The amount of time spent to craft a small page-limited proposal can be the same as what it takes to produce a much larger proposal. It depends on the RFP. But fitting a large RFP into a small page limit makes the time per page go way up. Then there’s the complexity of the RFP instructions and evaluation criteria, the complexity of the subject matter, the amount of time until the deadline, the amount of pre-RFP preparation, your familiarity with the customer and offering, and more that will impact the time per page. Averages aren’t. There’s too much variance.
Instead of trying to calculate the workload, try basing the budget on the desired ROI. What are you willing to invest to get the win? How many pursuits do you have to spread that investment across, and at what win rate? Your business development pipeline can provide valuable clues regarding how many resources you need. If you don’t know your win rate, you’ll have to guess. But you can refine your guess over your next few proposals.
When you consider what you can spend while keeping a competitive overhead rate, depending on your market, you might end up with a budget of 1-2% of projected revenue for the pre-RFP pursuit, and another 1-2% for the proposal. You can convert these numbers into how many people you can afford to have work on the proposal.
This defines what you can afford to invest and not necessarily what the proposal should cost. It could be more than what the proposal could be created for, if done on the cheap (but that might not achieve the best ROI). It could be less that what the proposal should cost based on the workload. But it reflects what you can afford to invest. If you can’t afford to invest what it will take to win and thrive off a positive ROI, you might be in the wrong business, undercapitalized, or doing the wrong things to reach a positive ROI.
When a proposal is with a familiar customer or offering, it will take less time and cost less to produce. When the RFP is simple and well written, the proposal will take less time and cost less to produce. Other things that can impact proposal cost include the availability of internal staff, use of consultants, competitive environment, time until the deadline, and more. But you can calculate an overall average to invest and divide it among your pursuits. You should manage the proposal function to maximize ROI, instead of trying to guess what the lowest head count is you can get away with and still make submissions.
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The materials he has published have helped millions of people develop business and write better proposals. Carl is an expert at winning in writing. He is a prolific author, frequent speaker, trainer, and consultant.
In addition, the groups Carl moderates on LinkedIn provide a place for tens of thousands of business development and proposal professionals to discuss best practices and network.