With the end-of-year festivities fast approaching, you may be thinking about your 2024 business activities with the sense of refreshed energy and momentum that can come with a new year. While it’s great to harness that enthusiasm, it pays to be discerning with the opportunities you decide to pursue.
Rather than stretching your resources to bid for every opportunity that comes across your desk, it is likely you will achieve far better results by refining your decision-making processes and focusing your efforts on winning the jobs that are more closely aligned with your business goals.
This sounds simple, but how do you evaluate what makes a good opportunity?
While experience and gut feel have a role to play, there are ways to make the bid decision process more strategic and methodical. In the proposal world, there is a 3-step process that can be applied to assist with deciding whether or not to pursue an opportunity.
1. The Pursuit Decision (Is it worth bidding?)
2. The Bid Validation Process (Are there any showstoppers?)
3. Kick Off (How do you tailor the bidding process to suit your business and value of the opportunity?)
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1. Pursuit Decision
The Pursuit Decision refers to the process of breaking down and evaluating the bidding opportunity to gain a clear understanding of whether it is a good fit for your business.
Investing time in this process will ensure you’re making an informed decision about the opportunity and are not going to waste your resources bidding for a job you don’t really want, are not able to deliver, is outside of your business niche, is not going to be profitable, and/or is not aligned with your business goals.
It allows you to eliminate opportunities that you have a low probability of winning and shift your focus and resources to opportunities that are more likely to bring you value.
There are various tools and techniques you can use to help with this step. A good place to start is to consider the following key questions:
- Is it a real opportunity?
- Do you really want it?
- Can you win it?
- Can you deliver on it?
Digging deeper, to help clarify these four questions, you can consider the following:
- How closely does the opportunity relate to your business? Is it within your niche product/service offering?
- How closely does the opportunity align with your strategic plan and short-term and long-term goals?
- How well do you know the organisation you’re potentially bidding to? What is their reputation and standing in your industry? And how well do they know your business?
- Is your business aligned with this organisation? Are they a good fit? Will the relationship strengthen your market position? Is there a potential reputational risk if your business is associated with them? What are they going to be like to work with?
- Is anyone else currently providing the product or services you’re bidding to provide? Who is it? Are they likely to win it again? How are you positioned in relation to them? Is there anything that you do better or add more value? What is your competitive advantage?
- Do you know anyone in the organisation you’re considering bidding to?
- How will the opportunity affect your existing business? What are the pros and cons?
- Can you win? What could lose you the bid?
Decision trees, checklists, scoring systems and matrices can help to add some structure to this evaluation process and are useful to highlight any information gaps. There are many different tools available to use. We have included an example of a decision tree below that we use here at ProposalPro.
If after this step, you decide the opportunity is likely to be worth pursing, the next step is to request a copy of the full tender documentation for closer evaluation.
2. Bid Validation Process (Are there any showstoppers?)
The Bid Validation Process involves taking a closer look at the tender documentation and carefully reading through all terms, conditions, and specifications. The purpose of this step is to be certain there are no ‘showstoppers’ that make the bid unsuitable for your business or will rule you out of contention.
Questions to consider at this step include:
- Are there any conditions that preclude you from bidding?
- Can you comply with all selection criteria and specifications?
- Do you meet all the prequalification requirements?
- Are all the contract terms acceptable?
- Is the proposed schedule reasonable?
- Are the performance KPIs realistic and potential penalties acceptable?
- Do you have all the necessary insurances and professional memberships etc the contract requires? If not, can you obtain them?
Useful discussion points you may wish to explore with your team at this stage include:
- What are the specific tender details and requirements? What are they asking you to deliver?
- What are the actual capabilities of your organisation to meet these requirements?
- Who is your competition? What do they have to offer? How do you compare?
- How much will it cost to win this opportunity?
- What is your strategy to win the bid? What approach are you going to take? What can you offer?
- What is the degree of risk to your organisation in pursuing this opportunity?
If you conclude that you are well-positioned to comply with all the requirements and a bid strategy is starting to take shape, the next step is to kick off the bidding process.
3. Kick Off
The Kick Off step involves tailoring your bid response to suit your resources and the value of the opportunity to your business. It’s a good idea to set clear guidelines at this stage, to help ensure you dedicate an appropriate level of resources to winning the bid. Time is money, and while you don’t want to squander valuable hours over-cooking your bid, you also don’t want to miss out on a profitable opportunity by submitting a poor tender response. It’s critical to get the balance right.
Points to consider in deciding the level of resources to dedicate to the bid include:
- What in-house capabilities do you have?
- How much is winning the bid worth to your company?
- Who is going to be on the bid team?
- What is each team member’s capacity to work on the bid response?
- What areas of the business do you need to get information from? Is it readily available?
- Who are the key decision makers for the bid strategy?
- Who is going to take overall responsibility for the bid response?
- Do you need to engage an external party to assist?
Deciding whether or not to pursue an opportunity and how much time and effort to dedicate to winning a bid can sometimes be a tricky proposition. Adopting a methodical approach and using evaluation tools can help to bring clarity to the decision-making process.
Learn more about Bids and Tenders >>
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Business owners often express confusion about working with average weighted criteria – it’s not a framework that you’ll come across too often outside of tendering. But it can tell you a surprising amount about what’s important to the buyer, how to read between the lines and structure your tender response to maximise your chances of success, and even whether it’s worth putting together a bid in the first place…