How Responding to Requests for Proposals Can Take Your Business to the Next Level
May 11, 2021
Author
How Responding to Requests for Proposals Can Take Your Business to the Next Level
by Emily Griesing
May 11, 2021
In a nutshell, Requests for Proposals (RFPs) are solicitations from potential buyers that present an opportunity to compete to provide specified goods or services. RFPs, which can also be referred to as Requests for Qualifications (RFQ) or Requests for Information (RFI), outline a specific organizational need and ask vendors to propose how they can fill that need. Once potential vendors submit their responses or ‘bids,’ the soliciting body reviews them for fit and chooses the vendor or vendors to fulfill their project. A common misconception is that only governments issue RFPs; however, more often than not, corporations and non-profit organizations also use this method to identify and hire suppliers.
For many businesses, responding to and winning RFPs can be instrumental for business development. Doing so serves as a powerful revenue stream, helps establish strong relationships with new and existing clients, adds to your track record of success, and propels future business opportunities. Sounds pretty good, huh? Then, why don’t more businesses do it?
While the RFP process may sound innocuous, replying to them can be a daunting task, especially for those new to the arena. In many cases, answering an RFP is like navigating through a labyrinth of steps and requirements, many of which can be tedious and confusing. However, your chances of RFP success improve significantly once you understand the strategy behind them. Generally, coming out of the RFP maze first (i.e., winning the bid) requires:
Since some RFPs are by invitation only, a certain amount of time should be allocated to the researching phase before you even begin compiling a response. Being selected for the opportunity to respond to an RFP can be a valuable first step in getting your foot in the door with a new and potentially large client. In some cases, once you are in the pipeline for these opportunities, RFP submissions can become the principal source of generating new business. To ensure the long, painstaking hours of completing the RFP requirements are worth it (as they can include items such as qualifications, previous work experience, team members and subcontractors, and a proposed budget), identifying the right RFPs to respond to is critical.
While you may be eager to respond to every RFP opportunity that comes your way, it is wise to be selective. There are three key factors to consider when deciding whether to respond to a certain RFP: fit, timing, and relationship. First, does your business have the requisite experience to meet the RFP scope? If your business has not previously provided the specified good or service, or something comparable, then chances of being awarded the RFP are a long-shot. Conversely, if you have demonstrated expertise in the area requested, and better yet, have experience with clients in the same or similar industry, then the RFP could be ideal for you.
Next, think about the time and resources required to draft a custom response. If choosing to answer an RFP would result in a chaotic scramble and disjointed response just to meet the response deadline, then pass it up for a different one where you can devote the time and energy warranted. Further, does your business have the capacity to handle the contract if you win? You’ll want to ensure you have sufficient team members, bandwidth and infrastructure to meet the needs of the contract. After all, what’s the point of winning business that you cannot fulfill or fulfill adequately? In fact, failure to perform could lead to reputational harm and even legal claims so be sure to only commit to projects you can live up to.
Another important factor to think about when assessing whether an RFP is worthwhile is your relationship to the requesting party. If you have done business with the organization before, or even better, decision makers personally ask you to participate because they know your business and quality of work, then it is wise to seriously consider pursuing the opportunity. On the other hand, it is certainly possible to win an RFP when you have no prior relationship with the solicitor, however, it requires leveraging other assets to get your submission noticed.
The RFP process involves many moving parts, which is why selecting the right team and qualifications to highlight can make or break your submission. Chosen personnel can include the prime contractor as well as any subcontractors that are complementary to the proposal. Prime contractors are the individuals or firms who are primarily responsible for the contract, while subcontractors are brought on to fill in the gaps or build upon the prime’s existing experience. For a “prime”, it’s important to identify “subs” you are confident will be communicative and collaborative throughout the RFP process and who are strategic to work with.
In particular, an important factor to consider when gathering your RFP team is supplier diversity.
Research has shown time and time again that diversity in thought and experience is good for business and the broader community. Given that, over the years, local, state and federal government agencies, as well as numerous Fortune 500 companies, have increasingly committed to designating a certain amount of their spending to diverse suppliers. Diverse suppliers are businesses that are certified as at least 51% owned and operated by an individual or group that is traditionally underrepresented or underserved such as minorities, women, veterans and members of the LGBTQ+ community. Small businesses can also take advantage of business development opportunities that are set aside for them.
In order to pursue RFPs as a diverse or small business supplier, the company must be validated through the certifying body that applies to them (such as the SBA, NMSDC, WBENC, NGLCC, etc.). If your business secures a diverse certification or you bring on subconsultants who have one, that can be an essential tool to make your proposal stand out from the competition. In some cases, RFPs require diverse suppliers as part of the proposal to even participate or award points in the assessment process for meeting certain diversity benchmarks, such as committing to subcontract a guaranteed share of the contract to a diverse subcontractor.
Once you have identified ways to bring diverse skill sets and backgrounds into your RFP response, you can begin to emphasize all of the other qualifications that make you stand out – from thought leadership contributions in the industry to similar projects and successful outcomes to cost-saving measures. All in all, compelling RFP submissions are about telling a story that conveys what you’ve done and what you can do to benefit the organization that is seeking assistance in ways that differentiate you from your competition.
Never fear, RFPs are fantastic opportunities for business development when done right and your chances of navigating them successfully greatly increase with a proper plan of action. Throughout the process, avoid wrong turns by first selecting RFPs that are right for your business, leveraging diverse teams for a more comprehensive approach, and highlighting experiences that are unique to your business. Once you make it out of the labyrinth, get your umbrella out for all the rain you’ll be making.
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