Managing Proposals: A Key Skill in Procurement

writing a proposal

Operating a business requires a lot of activities and projects. For many business owners, one of the most important skills to master is making proposals to other businesses and managing them when won. An entrepreneur who cannot write proposals for their business limits their market and audience as well as their profits. Likewise, an owner who cannot manage the business’ projects will soon find the business gradually collapsing.

Every manager and entrepreneur has their own style of management. Nevertheless, the inputs and over-all process are the same. The process remains constant but the approach or style used is also very important since it affects the efficiency of the process as well as the employees/personnel assigned to that project.

It Begins with a Proposal

A project or contract process begins with a proposal from interested parties. In sourcing, a lot of businesses are eager to provide their products or services to other business or large entities like the government. However, other businesses with the same ability or offer also aspire to do the same thing. Because every business is given the opportunity for consideration, agencies would often ask these businesses to submit a proposal based on information given or researched. Upon receiving proposals from numerous establishments, the receiving business would have to decide the best fit and award the project. Even at the proposal stage, there is some tough competition between business-candidates vying for the same project or contract.

There is a process from proposal to the awarding and it takes considerable time for both parties. The first phase involves the acceptance and sorting of proposal. Proposal phase can be placed under the input stage, where suppliers are welcome to submit their business proposal for consideration. After considering all proposals, the company will pick a seller (or sellers, depending on the scope of the project) in various methods. There can be a sole seller, single seller or oligopoly. In many cases (and even in procurement), an open and public bidding environment is encouraged to even the playing field for interested parties and to make substitution of sellers if needed.

Importance of Proposals

In procurement, a proposal is one document that can make or break the deal. It is also the ticket for a good procurement contract. Doing and managing it carefully is a must for businesses (and their owners) that wish to win more contracts and in turn, more profits.

Every business has its own target market in relation to the goods or services that it offers to the public/market. A business is created to fill a need – whether it is a need by a large public or fellow businesses. Sometimes, a business can readily tap an existing market. However, there are times when the business (particularly the business owner) can see opportunities beyond what is already available or existing. These opportunities can come as potential markets or clients. If a business sees itself as a good supplier to other parties, the business owner should be bold, take initiative and offer their services. After all, a business should not be overly reliant to an existing market. It needs to create profit constantly for its personnel and existence. If need be, it should also expand. Submitting project proposals or participating in any joint venture with other businesses is a good way to keep the business going and if the proposal is successful, a good profit for the business and thriving exchange of goods, skills and service.

Managing your Proposals

A business owner can write to as many potential business partners as the business requires or want. There is no limit on the number of proposal but quality is still a very important issue. For a small business, the writing and management of proposals are left to the owner in addition to the other duties that the business imposes. Sometimes, the owner can be helped by other employees.

For large companies, procurement proposals and projects are handled by the company’s procurement department, with the procurement or project manager as the head. The department is responsible for all procurement activities. If a larger company is the entity doing the procuring from small businesses, it is the department which accepts, handles and approves all proposals. A procurement department conducts the following process: Plan Procurement Management (Planning Phase), Conduct Procurements (Execution phase), Control Procurements (Monitoring and Controlling Phase), and Close Procurements (Closure Phase). The department is open for proposals or sellers in the execution phase or Conduct procurement process

Managing procurement and activities is essential for any business. Management is important to make sure that the correct item, its quantity and other important attributes are accounted for and delivered correctly to the company.

The Proposal in Procurement

Procurement is one of the most important activities of a business. A business is reliant on other products of other businesses and needs suppliers for its operations and products. It is possible that a business can exist and run without procurement. However, without procurement, a business will be limited on what it can or cannot use. The same applies to a business offering its services and products.

Often, external proposals from other businesses are for procurement. This implies that
procurement proposals are part and considered as business projects. The business undertakes procurement as a project to better the business and deliver its offerings to its clients.

Writing a proposal (of any kind) is always difficult, even if the business already has the necessary information it needs beforehand. A proposal is like a resume; it should sell the best parts of the business, particularly the goods and services that it offers. The proposal can also highlight other benefits that the receiving company can expect from the business. With competition in mind and hundreds of proposal being sent to a smaller number of receivers, a business must make the proposal stand out. It is a requirement and a necessity if the proposal wishes to be accepted. Even if a business owner has experience in writing proposals, it’s always wise to get a good timely reminder in writing winning proposals or research a company’s proposal management guide.

Every proposal must be tailor-made to the company where it will be sent. Preplanning is crucial to any proposal making/writing.

The process of proposal writing can take time and so does the research for the proposal. Your proposal can highlight the best thing about your company or business but the proposal must link and sell the ties between your company (which does the proposal) and the company that receives it. There should be an underlying connection and a tie-in when it comes to opportunities that your business provides and what the receiving company needs. Your business/procurement proposal must have something that the receiver would want or need. If it isn’t, the whole process is a waste of both parties’ time.

It is important to research important information such as company profile, products or services. The company’s market (its share and market industry standing) and other related news regarding the company can also be included. In many procurement portals and hubs, the company does provide information related to the company, its needs and requirements when it is open for proposal. Research shouldn’t stop there. Getting more information increases the chance of compatibility of doing business between the companies and a good litmus test whether a small owner’s business and offering are a match to a larger one.

Using a proposal or project template can help but the over-all content and ideas should always consider the company or audience. Sometimes, it is best to make a proposal from the scratch if needed.

The Other Side

There are two sides to every coin and the same rings true to the procurement process. While some businesses are trying to come up with a very good proposal for procurement purposes, there is the side of the company that will receive this proposal. Many times, the receiving company’s procurement department has a proposal management process that helps sort out the proposals accepted from numerous parties.

The receiver of the proposal accept a lot of proposals and with budget constraints, it has to settle to the proposal that meets every related issue of the project/company. In writing, keep in mind these important areas: the company’s wants, needs, and preferences. Doing this will allow the proposal to stand the first level of scrutiny. In addition, give the receiving company a peek at the opportunity that your business is presenting. That is the foundation and selling point of the proposal.

From the receiving point of view, proposal management is a sensible policy and practice. After all, a contract given by a government or a large company is seen as a massive boost of profit to small businesses. Determining the best proposal is sometimes tricky and the massive amount of proposals being received is sometimes too much even for a corporate procurement department.

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