Proposal groups are often usually understaffed. But what most don’t realize is that they set themselves up for it. The approach most people use to determine how many people they need to do their proposals consistently results in not having enough. They need a different approach.
When people ask “How many people do you need for your proposals?” they can mean it two different ways:
We’ve written about the first question and provide detailed guidance for it in our MustWin Process Documentation. In this article, I’m going to focus on how many people you should have in your proposal department.
- How many people do I need to prepare a single proposal?
- How many people should be in my proposal department to handle all of my proposals?
Most people try to approach this problem analytically, seeking to calculate the right number of people. When taking this approach, here are some of the things you need to consider:
Based on a deep methodical calculus you will arrive at the number of people you need. Management will then slash that number down to what they think they can afford. Then you can argue back and forth. This will happen because you are both approaching the proposal function as an expense. Expenses must be minimized.
- How many proposals do you anticipate producing?
- What is the range of page counts for your RFPs?
- What is the range of page counts for your proposals?
- What range of people will be needed to produce each proposal individually?
- How many proposals will be going on at one time?
- What locations will be involved in preparing your proposals, and which staff will be located where?
- How much of the writing can be handled by a central resource and how much requires subject matter expertise?
- Does it make economic sense to centralize proposal production so that billable proposal contributors can remain billable?
- What is the level of effort for reproducing, binding, and packaging your proposals?
- What level of graphics and visual communication do you aspire to, and will writers be expected to prepare their own graphics?
- What is your process for reviewing proposals, and how does this impact production and staffing?
- Who is involved in pre-RFP opportunity pursuit and how is the hand-off to proposal development handled?
We recommend a completely different approach that involves looking at the proposal function as an investment. Investments with a profitable return are to be maximized. To calculate your needs based on this approach, you start with the company’s revenue (or better yet, profit, if you can get the numbers) target. Then decide what percent of the company’s business it should invest in its proposals. You can use the current staffing as a baseline and calculate what percentage it represents. Another baseline to consider is what the company spends on other functions.
Next, you should calculate what a small difference in win rate does to the company’s profitability. This tells you whether investing in the proposal function can generate a return on investment that’s worth pursuing.
Since you’re not going to know all of the numbers, you can create a spreadsheet with a range of revenue numbers, a range of win rates, a range for the proposal function percentage, and a fill-in for the company's profit percentage. Then you can look for the "sweet spot" that maximizes profit. You can also mark what the company is currently spending on the proposal function and look for a gap.
Then submit the spreadsheet to your executives with a suggestion that the proposal department be operated more like a profit and loss function than as an expense. You can offer to turn the proposal department into a strategic asset that makes the company more profitable. If you feel like being aggressive, you can even ask for a bonus based on the return on investment. Then all you have to do is deliver on the promise of an increased win rate because from then on they'll be watching the numbers, looking for the return on their investment.
What we like about this approach is that it gets to the real heart of the matter: How much is the proposal function worth to the company? It takes the function away from being an expense to be minimized and turns it into part of the company’s strategic plans to maximize profit. It means that the proposal group is structured around what it will take to boost the company’s win rates, instead of it being based on the whim of the budgetary moment.
Be careful, however; along with greater glory it brings heightened scrutiny. It ties your future to increasing win rates, and many of the factors that impact your company’s win rate are outside of the proposal department’s control. But then again, this approach makes you a larger stakeholder and can strengthen your ability to speak to win rate factors that
are used to be outside of your control.