For many businesses, the first step in generating revenue is\nresponding to a request\nfor proposal (RFP). RFPs are invitations to submit a bid. Your bid will\nbecome the basis of any contract that is eventually signed.\n\n\n\nWhen responding to an RFP, it\u2019s critical that you not only\naddress all of the requirements listed in the document but that you also analyze\nthe requirements to see if your business model is a good fit for this specific\nproject. \n\n\n\n1. Understanding the\nRFP Process\n\n\n\nWhile every business and government agency has a slightly\ndifferent RFP process, they all have three phases. \n\n\n\nIn the first phase, an organization releases an RFP. They\nmay post it on their website, send out a press release, or send an email to a\nlist of potential vendors. The RFP will list a window of time during which\nresponse or bids will be accepted. \n\n\n\nThe second phase is the screening phase. The company filters\nout companies that failed to meet the requirements or who do not seem to be a\ngood fit. The company then selects a group of proposals as finalists.\n\n\n\nIn the third phase, the finalists are evaluated, and a\nproposal is accepted. Once the proposal is accepted, the two companies will\nenter into a contract negotiation. \n\n\n\n2. Evaluating Price\nPoint\n\n\n\nSuccessful businesses understand what their minimum price\npoint is. They know that they cannot generate profits operating below a certain\nprice point because of their fixed costs. \n\n\n\nBefore going through the process of analyzing a lengthy RFP\nand working on a response, it makes sense to calculate the price range the\ncompany will accept. If the maximum acceptable price is below your minimum\nprice point, there is no need to waste effort bidding on a contract you will\nnot get.\n\n\n\n3. Understanding\nDeliverables and Milestones\n\n\n\nThe next key to responding to an RFP is to make sure you are\nclear on the number and frequency of deliveries the contract will require. \n\n\n\nIf the delivery requirements are beyond your capacity, you\nneed to decide if you can increase capacity if you land the contract. There may\nbe an opportunity cost to spending resources to increase capacity for a single\ncontract. \n\n\n\nSometimes the best choice for your business will be to\nforego an opportunity. But, you may be ready to grow, and increasing capacity\nmakes sense.\n\n\n\nYour potential client will want to know the specifics of how\nyou plan on fulfilling the contract. \n\n\n\n4. Checking Time\nHorizons\n\n\n\nBeyond the number and frequency of deliverables, you need to\nexamine all of the time horizons for the contract. \n\n\n\nWhen will you be paid? When are the deadlines for the\ndifferent milestones? Will the contract have a flexible deadline or a set\ndeadline? What are the penalties for being late? How long is the contract for?\nDoes your performance depend on other partners?\n\n\n\nSome of these issues will be negotiable if your bid is accepted. But, you need to consider the time horizons for deliveries and payment when deciding whether or not to bid. \n\n\n\n Never lose a contract again! Work more effectively, increase your revenue, centralize & secure your contracts. Available anywhere, anytime & on any device.Get your Free Demo today! \n\n\n\n5. Determining the Level of Effort and Resources Required\n\n\n\nMore than one company has run into major cash flow issues\nafter landing a bigger contract than they were used to handling. \n\n\n\nYou need to evaluate the materials and human resources you\nwill need to meet the contract. This will influence your costs and your\ntimeline for delivery. \n\n\n\nWill you need to scale up to meet the requirements listed in\nthe RFP? How variable are materials costs?\n\n\n\nThis is not a time for unrealistic positive thinking. You\nneed to take a hard look at what the contract is really going to require from\nyou in terms of effort and resources. \n\n\n\n6. Evaluating Special\nConditions\n\n\n\nA well-written RFP will also include any special conditions\nfor the project. You need to make sure that you are comfortable with any\nspecial conditions and plan for how special conditions will impact your costs\nand delivery timetable.\n\n\n\nSometimes a special condition will make a project too\nexpensive for your company to undertake. \n\n\n\n7. Adapting to Method\nof Evaluation\n\n\n\nOften a company will require a bid be submitted in a certain\nformat. You need to adapt your response to conform to whatever submission and\nevaluation requirements the company requests.\n\n\n\nThere is an ancient Zen saying that states, \u201cThe way you do\nthe small things is the way you do everything.\u201d Following directions down to\nthe smallest detail helps your bid survive the filtering process and\ndemonstrates the care you will use on the project.