In a past life I was a proposal consultant. These days, I take on an occasional proposal to keep my chops up, but I'm really not in that business. I have the CapturePlanning.com empire to run and really can't afford to do much consulting — even at the insane rates I quote when I can't just turn something down.
This means I can speak freely about proposal consulting and get away with it. I am neither in favor of using consultants nor against it. My goal is to help people understand when it's a good match for them, figure out how to create a winning proposal, and maybe learn something along the way.
People often want hands-on help doing their proposals. Some would like to have someone just do the proposal for them. Others want to do it themselves, but would like someone with more experience to help them out. Some just don't know how to get it all done in time and need extra hands. They often contact CapturePlanning.com, but while we help, we don't do the hands-on, take it over and do it for you, spend hours working directly with you kind of help. We've set up a Partners Program and a directory with links to consultants who do the hands-on thing. But how do you know if that's the right approach for you to take? How do you know how much it's going to cost to get a consultant to help you with your proposals?
I bet we can figure out what it should cost...
Approach #1: How much do you want to make?
Forget about the consultant. How much do you want to make per year? It's relevant, because a consultant starts from the same question.
Take what you want to make and divide it by 2000 for a crude way to convert it to an hourly rate. If you take 8 hours a day * 5 days a week * 52 weeks in a year and then round off to keep the math simple, you get 2000.
Now, take that number and add 50-100% because consultants don't have work every day. When a proposal gets submitted, a consultant is out of work until the next one starts. Even popular consultants can't always line them up without interruption because they don't control the start dates and the start date often changes depending on when the RFP actually gets released. The result is that to be a consultant who earns what you need to, you have to pad your hourly rate to reflect the days you're not working.
So let's say you want to make $250k a year. That converts to an hourly rate of $125/hr. Add 30% to cover the time in between assignments and you're at $162.50/hr.
A junior-level consultant who's willing to settle for $80k a year, would convert to $40/hour. Add 30% and they're at $52/hr. The only problem is that junior-level people don't go into consulting. And if they did, is that who you want to hire to win your proposal?
Approach #2: Do a survey
Do a salary survey for proposal writers, proposal managers, or project managers. If you go to salary.com you'll find:
Like most fields, senior staff can double those rates and rock stars can triple or even quadruple them.
- Most proposal writers are in the $50-70k range
- Most proposal managers are in the $65-90k range
- Most project managers are in the $60-120k range
So an annual salary of $80k at the low end and $250k at the high end (converted to an hourly rate) may actually be a good range to anticipate paying.
Should you work with a company or an individual?
Proposal consulting companies have databases with lots of consultants. When you work with them you can get someone with subject matter expertise that is directly relevant. They also have a lot more overhead: recruiters, office space, account managers, human resources, invoicing, etc. While going through a company has many advantages (quicker, easier, subject matter expertise, verification of credentials, etc.), it also costs more. You can figure anywhere from 30% to 100% just to cover the overhead. If we take the rates above and add 50% to cover working with a company, we end up with $75/hr at the low end and $250/hr at the high end. You can pay even more for rock stars (or consultants from companies with higher overhead).
You can save some money by working directly with individual consultants, but it will take a lot of work. First you need to identify a bunch of consultants — when you need them, most will already be working and not immediately available. Second you'll have to verify their credentials and do all the paperwork yourself. Then you have to maintain your network over time.
So even though it costs more, it's usually a lot easier just to pick up the phone and call a company that places consultants than it is to go direct.
Which is better for you will depend on your circumstances and preferences.
How many hours do you need?
For the smallest proposal the consultant will need to talk to you for an hour or two. Review the RFP. Review any previous proposals, brochures, or other materials that you may have. Then they'll start writing. How long that will take will depend on the size and complexity of RFP and the proposal. But it should take many hours. For someone to start writing within an hour of talking to you probably means that they haven't done the research it takes to write a winning proposal.
If I ask you out of the blue how long it will take to write a letter to someone, what would you say? Should it take one hour or all day? Are you asking yourself: How long is the letter, who is it to, what data do you need to include, what research do you need to do in order to write it, etc.? Your proposal consultant will ask similar questions. Just like a letter, it can take an hour to write one page of a proposal or it can take all day.
Sometimes a better way to estimate how long it will take is to think in terms of days. Can the proposal be done in a day? (Probably not.) Two days? A week or more? Is there a deadline? Most proposals have too little time before the deadline instead of too much time. When that's the case you can estimate the time based on how many days to the deadline. Figure a week or two for most small proposals and up to a month for a bigger one.
If you started reading this article thinking that your proposal would only need a couple of hours to write, you might want to reconsider. Even if you could write it in a couple of hours (and let's be honest...), it will take a consultant longer because they have to learn about you, the opportunity, the competitive environment, your strategies for winning, and what you intend to offer — all before they start writing the first page. Incidentally, for a tiny proposal this may mean that you spend as much time talking to and training the consultant as you would writing the proposal yourself. That takes us to whether you should write the proposal yourself or use a consultant, and that's a topic for another article.
Now look at it from the consultant's perspective. Would you really want to bother with a project that's only going to employ you for a day? Even if their rate is heavily padded (making them more expensive), most consultants will want at least a week's worth of work before they'll take on your project. Factor in all the unbillable time it takes to find and land new customers and you could easily go broke taking on small projects.
So how much should a proposal cost?
A proposal that takes a week means you're looking at a minimum of $3,000 at the low end and closer to $10,000 just to be considered a small project (40 hours * $75/hr or 40 hours * $250/hr).
If you started reading this article thinking you could hand someone $500 to write your proposal for you, this would be a good time to reconsider.
Now let's have some fun with math. If you earn 10% profit, then you'll need a project of at least $30,000 to justify using a consultant. If you want to keep some of that profit for yourself, it will have to be even more. Being realistic, you probably need a project with a value of at least $100,000 to cover the cost of using a consultant. If you earn more in profit the amount could be less.
Obviously, we're rounding things off and making crude assumptions left and right, but I think we're in the ball park. Feel free to recalculate to get numbers that fit your circumstances better.
Let's check ourselves by running it in reverse
If you became a proposal consultant and took $500 to do a proposal that only took a couple of hours, and you did one per day every work day, you'd end the year earning about $120,000. You'd also have to line up 240 customers back-to-back. So you'd be more likely to make $60,000, and that's assuming you could find 120 customers. What level of expertise do you think that level of earning would attract?
Another perspective check
If you find someone with a rate that's half of what you see above, is that a bargain? Do the math.
If their hourly rate works out to something like $20/hr, then ask yourself how they can afford to be in business. If they're making less as a consultant than a below average proposal writer would make working at a company, do you think they have the skills needed to win your proposal? I'm not saying they don't — maybe they live in Thailand like the editor we use. I'm just saying it's something to ask yourself.
If you're not prepared to spend thousands, and more likely tens of thousands of dollars, then hiring a consultant probably isn't the way to go. If you get lucky and find an individual who's just starting out as a consultant, maybe you come in at the low end.
If you can't get someone else to write your proposal for you, that leaves doing it yourself. Does our Premium Membership seem so expensive now?
By Carl Dickson, Founder and Publisher, CapturePlanning.com
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