Costco Connection - March 2008

small
business

Write the document

Formal bids should be solid documents that call out all of the included products and services. Be sure to cover all aspects, such as shipping terms, delivery dates, substitution issues, payment expectations, acts of God, applicable taxes and fees. Providing sketchy or missing information may lead to clients selecting the competition, explains McKay. “If the client has to ask a myriad of questions to fill in the blanks, the bid is unsuitable,” she says. Also remember that the best quotations are not offers to haggle. While some companies submit their highest numbers, hoping to negotiate further, presenting the best deal as the bid represents a high level of integrity, says McKay. Adding an extra dimension to the proposal can solidify a business’s chances during the selection process and makes the bid memorable. “For instance, writing the bid using [the client’s] goals and objective breakdown can demonstrate the time and attention applied to the process,” says Blair. “Show that you understand what they want and demonstrate why you are the best.”

SAM TROU T

Winning the bid

The art of capturing
new business
By Peter Fretty

BEING SUCCESSFUL IN most any business undoubtedly requires an ability to develop and nurture existing relationships. However, when the time comes for you to expand, forging new relationships often depends heavily upon how well you bid on jobs and respond to requests for proposals (RFPs).

While some people enjoy bidding on jobs, the process is one most business owners approach with hesitancy. After all, entering the process often brings up more questions than answers: How high is too high? What happens if I underestimate their expectations? Can I really handle a job that big? How do I protect myself? Who else is bidding?

Landing new jobs can make or break a business. While successful bidding is far from a science, having a solid process in place can ease the burden and bring about welcome consistency. Here are a few proven aspects business owners should consider throughout the process.

Research opportunities

Thoroughly understanding the proposed project helps eliminate potential mishaps. Carefully plot the course of the project while paying close attention to what is called out in the RFP. Identifying exact requirements lets you proceed with confidence. Asking peers

about their experiences can also provide insight into the potential client’s typical expectations and behaviors.

The key is to go in prepared, advises Cynthia McKay, Costco member and CEO of Castle Rock, Colorado–based Le Gourmet Gift Basket Inc. “Always ask the client for as much information as possible regarding delivery requirements, unusual stipulations or any other aspect before making the bid,” she says. “The more you know, the better off you will be.”

Cover the costs

With business sustainability in mind, it is crucial to understand all of the costs—wages, supplies, incidentals, etc.—before presenting any bid. “Always cover this area adequately in your bid, taking into account the possibility of time delays and their costs as well as the standard add-on costs for benefits and other per-sonnel-related costs,” says Billie Blair, Ph.D., president and CEO of Temecula, California– based Leading and Learning Inc., and also a Costco member.

Update current supply costs prior to any bidding to avoid pricing mishaps. “It’s also very important to anticipate situations where there will be dramatic cost increases of basic materials, such as food, building materials, noncontracted components, etc.,” says Blair.

Finally, give profit—not greed—its due, and avoid projects that don’t offer a reasonable profit for your company. Establish an hourly rate calculation that will bring a reasonable profit for your firm.

Deliver the bid

Make the presentation as memorable, tasteful and professional as possible. “If they see your work in person and remember the actual presentation, it can secure the business,” says McKay.

However, the bid presentation does not complete the process. While there is a difference between following up and pestering, staying in contact demonstrates attention to detail as well as willingness to meet expectations. The bid and the follow-through combined often craft the prospective client’s first impression.

Embrace consistency

Successful bidding is best accomplished when one person with an established routine completes the bids each time. Having a bidder’s checklist customized to a particular project can play a key role in establishing consistency. Once a fine-tuned checklist is in place, it is much easier for additional team members to have a role in bidding.

Devote the necessary time to the process to allow you to accomplish each of these aspects completely and thoroughly. “If you’re not satisfied with a section of the bid, take the time to revise and improve it,” says Blair. “If you’re not pleased, it’s likely that the person receiving the bid won’t be either.” C

Based in Whitehall, Michigan, freelance writer Peter Fretty regularly writes on small-business issues, high-tech gadgets and travel destinations. You can reach him at pfretty@gmail.com.