When you want vendors to compete for the goods or services you wish to acquire, a Request for Quotation (rfq) is a conventional way to procure. It entails providing a description of what you want to all interested providers and then evaluating the rfq you receive based on characteristics such as price, quality, and delivery. The more clear the requirements, the easier it is to compare the various estimates. The issue with this is that it takes a long time (and hence money) for both parties and limits what providers may do to offer new ideas. In the end, some providers may reject a bid if they believe the risk is not worth the possible profit.
The minimal content categories that you should mention in a business proposal are recommended and detailed in this article. We’ll presume that your customer hasn’t requested a formal document structure in this situation, so you’ll have to decide on the proposal’s format.
Many organizations are embracing a solution that has been employed by various sectors for many years. This is accomplished through the use of a design and prototype technique. This method entails choosing a supplier (or a limited number of suppliers) to collaborate with you on developing novel procurement options and then producing a prototype that can be tested for practicality.
One benefit of this is that you may halt the process early if it appears that a viable solution will not be found. This avoids the all-too-common dilemma of going through the whole tendering process (which may take months) only to find out at the end, after all, bids have been filed, that a solution is either not technically feasible or too expensive. For both you and your suppliers, this is a waste of time and money.
You will be in a much stronger position to go to market if you have a working prototype that has been priced.
Before you begin drafting any proposal, you must first examine your goal: to sell your products or services. Your client will examine two primary factors when selecting whether to accept your proposal: if you understand their company demands and whether you can deliver on your promises. When writing your proposal, you must keep these two key questions in mind at all times.
Here are a few of the primary advantages of this strategy.
- You obtain a better estimate of the project’s potential cost sooner than if you use a standard bidding procedure. This allows you to determine whether the final solution will be affordable and, as a result, end the project before either side invests too much money.
- It facilitates the use of waste reduction approaches such as value engineering during the design process rather than the more common post-contract award stage. As a consequence, you will be able to save money.
- Because any “dead” time between the several stages of the conventional process is removed, the overall time spent from concept to completion is lower than the traditional way of contract letting.
- It encourages innovation since the supplier may experiment with alternative technologies and techniques during the design phase, knowing that they will not have to compete for the contract because their ideas are too “out there” for the customer.