A common means of obtaining proposals for a project is to issue an RFP (Request for Proposal) document. In some cases this is preceded by a Request for Information (RFI) document that asks interested parties to provide an initial indication of their interest. The RFP is then issued to the parties that are selected, in other words, it is a filtering process. A second method is for a company to invite known organisations to tender. For government contracts, there is often a compulsory and formal process that must be followed, for private companies it is entirely at their own discretion how this process is managed. Whichever way you have become involved in the process, it is now up to you to deliver a response to this RFP that will win you the work.

In writing the RFP, the customer has thought through their situation and has, hopefully, been able to articulate this in a way that describes it clearly to potential suppliers. They will want some specific answers to help them in selecting the best supplier. Hopefully they are also open to ideas and suggestions and, with your expertise in the area, there might be issues that you can see the customer has not raised and perhaps is not aware of. Provide the information that they ask for and answer all the questions honestly in the way the prospect has asked you to but also feel free to suggest realistic alternatives where you feel that they will offer added value.

As the prospective customer, I am now going to take all of the proposals that I have received and evaluate them. I'm going to evaluate your proposal, score your company's ability to do the job and work with my company in relation to the other submissions that I have received (this is another good reason to write a proposal as you have been asked to and not as you would necessarily prefer to!). Ultimately the RFP process is there for the benefit of the customer since it allows them to select the best supplier for the job but it is also a useful exercise for the supplier as well!

Understand the problem
If there is one rule of proposal writing that stands head and shoulders above all the others it is that you must understand what is being asked of you. It goes without saying that you need to know enough about the prospect and their business to be able to produce a coherent proposal. If you have questions or there are ambiguities or omissions in the RFP, talk to the prospect. This will clarify things for you and will show the prospect that you are serious about responding.

So when is it worth responding to an RFP and when should you walk away?
This will obviously depend on your individual organisation but some rules of thumb are:

The project is too small
If the effort involved in responding to an RFP is more than ten percent of the overall project size, it's probably not worth it. Remember you're not being paid for the proposal, you need to recoup this cost over the rest of the project. If the project is too small, it could end up costing you money.

It's outside our scope, we don't have the expertise, it's too big
This shouldn't stop you responding but you do need to think carefully before you do. Are the skills that you lack ones that you can easily acquire and in fact want to acquire? Can you partner with another organisation? Remember in this situation that you are increasing your risk factors, so make sure that this is a level of risk that you are comfortable with and only respond if you are sure that you can deliver.

We're too busy
Be careful taking on too much work, it can lead to stress and a drop in standards all round. This benefits neither you nor your customers. One of the problems for small businesses in particular is that it's very, very hard to say "no" to work. If you look at the bigger picture it isn't always appropriate to take on that extra job, remember that you're only as good as your last project and none of us can afford mediocrity.

It doesn't feel right
What we do is all about relationships and if you don't like or trust the prospect, if you don't feel comfortable with what they are saying or their way of operating, trust that instinct. Are they bad payers or notorious for trying to get everything for nothing? Be aware of being approached to provide a proposal simply to keep an incumbent honest, this is a waste of your time, since you have no hope of winning business that isn't really up for grabs. Customers like this are worth avoiding and if you get this feeling about someone then maybe it's a good idea to steer clear. If you aren't sure about a company, ask around and see if anyone you know has had dealings with them, use your networks to find out what others think.

Loss leaders
Try to avoid taking on "loss leader" projects in order to get a foot in the door with a potentially lucrative customer. If you win the work based on an artificially discounted price then you can end up setting an expectation in the customer's mind that you cannot live up to. This usually backfires when you attempt to put up your rates for subsequent projects! Don't use the proposal as a way to win business that you can't afford to keep!