Business Proposal Topic
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ExecutiveSummary.docx5 LEARNING OBJECTIVE
Identify the elements to include in a request for proposal (RFP).
15.5 Writing Requests for Proposals
When writing an RFP, be sure to give potential respondents all the information they need in order to craft a meaningful response to your request.
At some point in your career, you might be the one receiving proposals, and learning how to request effective proposals will simplify the process considerably. Various organizations handle RFPs in different ways. When writing an RFP, remember that it is more than just a request; it’s an informational report that provides potential bidders with the information they need to craft effective proposals. Writing an RFP demands careful consideration because it starts a process that leads to a proposal, a contract, and eventually the delivery of a product or the performance of a service. In other words, mistakes at the RFP stage can ripple throughout the process and create costly headaches for everyone involved.
An RFP’s specific content will vary widely from industry to industry, but all RFPs should include some combination of the following elements:9
Company background. Give potential bidders some background information on your organization, your business priorities, and other information they might need in order to respond in an informed manner.
Project description. Put your requirements in context; are you seeking bids for routine supplies or services, or do you need a major computer system?
Requirements. The requirements section should spell out everything you expect from potential vendors; don’t leave anything to unstated assumptions. Will potential vendors provide key equipment, or will you? Will you expect vendors to work under confidentiality restrictions, such as a nondisclosure agreement? Who will pay if costs run higher than expected? Will you require ongoing service or support? Providing this information can be a lot of work, but again, overlooking anything at this point is likely to create considerable problems once the project gets rolling.
CHECKLIST ✓ Producing Formal Reports and Proposals
Prefatory parts
Use your company’s standard report covers, if available.
Include a concise, descriptive title on the cover.
Include a title fly only if you want an extra-formal touch.
On the title page, list (1) report title; (2) name, title, and address of the group or person who authorized the report; (3) name, title, and address of the group or person who prepared the report; and (4) date of submission.
Include a copy of the letter of authorization, if appropriate.
If responding to an RFP, follow its instructions for including a copy or referring to the RFP by name or tracking number.
Include a letter of transmittal that introduces the report.
Provide a table of contents in outline form, with headings worded exactly as they appear in the body of the report.
Include a list of illustrations if the report contains a large number of them.
Include a synopsis (brief summary of the report) or an executive summary (a condensed, “mini” version of the report) for longer reports.
Text of the report
Draft an introduction that prepares the reader for the content that follows.
Provide information that supports your conclusions, recommendations, or proposals in the body of the report.
Don’t overload the body with unnecessary detail.
Close with a summary of your main idea.
Supplementary parts
Use appendixes to provide supplementary information or supporting evidence.
List in a bibliography any secondary sources you used.
Provide an index if your report contains a large number of terms or ideas and is likely to be consulted over time.
Decision criteria. Let bidders know how you’ll be making the decision. Is quality more important than cost? Will you consider only certain types of vendors or only those that use certain processes or technologies? Will you entertain bids from companies that have never worked in your particular industry? The answers to such questions not only help bidders determine whether they’re right for your project but also help them craft proposals that meet your needs.
Proposal requirements. Explain exactly what you expect to see in the proposal itself—which sections, what media, how many copies, and so on.
Submission and contact information. A well-written RFP answers most potential questions, and it also tells people when, where, and how to respond. In addition, effective RFPs always give bidders the name of a contact within the organization who can answer detailed questions.
A smart approach to managing RFPs can minimize the work involved for everyone and maximize the effectiveness of the RFP. First, identify your decision criteria and then brainstorm the information you need to measure against those criteria. Don’t ask bidders to submit information about every aspect of their operations if such details aren’t relevant to your decision. Making such unreasonable demands is unfair to bidders, will unnecessarily complicate your review process, and will discourage some potentially attractive bidders from responding.
Second, to get quality responses that match your unique business needs, give bidders plenty of time to respond. Successful companies are usually busy responding to other RFPs and working on other projects; you can’t expect them to drop everything to focus solely on your RFP.
Third, if your company generates numerous RFPs, tracking proposals can become a full-time job. Consider establishing an online system for tracking responses automatically.10
REPORT WRITER’S NOTEBOOK
Analyzing a Formal Report
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The report presented in the following pages was prepared by Linda Moreno, manager of the cost accounting department at Electrovision, a high-tech company based in Los Gatos, California. Electrovision’s main product is optical character recognition equipment, which is used by the U.S. Postal Service for sorting mail. Moreno’s job is to help analyze the company’s costs. She has this to say about the background of the report:
For the past three or four years, Electrovision has been on a roll. Our A-12 optical character reader was a real breakthrough, and the post office grabbed up as many as we could make. Our sales and profits kept climbing, and morale was fantastic. Everybody seemed to think that the good times would last forever. Unfortunately, everybody was wrong. When the Postal Service announced that it was postponing all new equipment purchases because of cuts in its budget, we woke up to the fact that we are essentially a one-product company with one customer. At that point, management started scrambling around looking for ways to cut costs until we could diversify our business a bit.
The vice president of operations, Dennis McWilliams, asked me to help identify cost-cutting opportunities in travel and entertainment. On the basis of his personal observations, he felt that Electrovision was overly generous in its travel policies and that we might be able to save a significant amount by controlling these costs more carefully. My investigation confirmed his suspicion.
I was reasonably confident that my report would be well received. I’ve worked with Dennis for several years and know what he likes: plenty of facts, clearly stated conclusions, and specific recommendations for what should be done next. I also knew that my report would be passed on to other Electrovision executives, so I wanted to create a good impression. I wanted the report to be accurate and thorough, visually appealing, readable, and appropriate in tone.
COMMUNICATION CHALLENGES AT Garage Technology Ventures
You recently joined Guy Kawasaki and the rest of the team at Garage Technology Ventures in Palo Alto. Among your responsibilities is screening executive summaries of business plans submitted by start-up companies seeking financing. Review the criteria discussed in the chapter-opening Communication Close-Up on page 391 to address the following challenges.
INDIVIDUAL CHALLENGE:You’ve just received an intriguing executive summary from a start-up company whose technology reduces the cost of providing Internet service by nearly 30 percent, an amount that would spark interest from just about every Internet service provider in the world. The financial projections in the executive summary are realistic—and quite positive. Even if this investment panned out only half as well as the numbers suggest, it would bring in a sizable amount of cash when the company eventually goes public. The technological solution is sound, too; you used to work as a network engineer, and these people know what they’re doing. There is just one problem: the submission is entirely anonymous. The document describes, in vague terms, four experienced technical and business specialists but doesn’t give their names or their specific work experiences. A note attached to the plan apologizes for the secrecy but says the four principals in the new firm can’t reveal themselves until they get financing and can therefore leave their current jobs. Do you reject the submission or pass it on to Kawasaki and the other managing directors for their consideration? Explain your answer.
TEAM CHALLENGE:Review these “grabs” presented in three executive summaries. Discuss their strengths and weaknesses and decide which one of the three you would forward to Kawasaki and the other directors.
Company A: Pardon our bullish tone, but this is the best investment opportunity you are likely to see this year. As one of our board members recently said, we are already on track to out-Apple Apple and out-Google Google.
Company B: Cooling the huge data centers that power the Internet costs millions of dollars and consumes massive amounts of energy. Our low-temperature server technology pays for itself in less than a year by reducing energy bills and extending the life of data center hardware.
Company C: Our travel-search website has already proven so popular that last month we had 140,000 site visitors. By the way, we have interest from three other investment firms, so our advice would be to jump on this opportunity!
