STAHL Consulting agrees with Carl Dickson/Capture Planning, who writes concerning, “Is it worth responding to RFPs?” The answer is a simple mathematical equation: Bids x Cost < Profit x Wins Is the number of bids times the average cost of bidding greater or less than the average profit times the number of wins? Ultimately, you want the profit you will make exceed your cost of bidding. The key variables are:
o What is the cost of bidding? o What is your probability of winning? o How profitable will it be, if you win?
Small projects and/or slim profit margins decrease what you can afford to spend to pursue opportunities. If you don’t believe you can afford to prepare a customized proposal, leading you to send the customer a “quick” proposal, then you are trying to get away with sending them a hollow brochure and a quote. As a result, you are not submitting a best value solution, you are sending them a lowest cost solution.