An article written by our principal, Onah Jung was recently published in the Toronto Star. The article, How(and why) Small Businesses Should Get In on the RFP Action? was originally posted on Toronto Star Business Club on February 17, 2014. You can view it here.
How (and why) small businesses should get in on the RFP action?
After writing about my experience with request for proposal (RFP) process last year, I received a lot of questions from fellow architecture firms, including whether small firms should even engage in RFPs.
The short answer is yes, and that applies to all kinds of companies.
One common misconception about RFPs is that they are only for government projects. In fact, RFPs can be for private projects, too. The process has more to do with type, size, and budget of a project rather than type of client. Our architecture firm, Studio Jonah, participated in a housing project RFP with a nonprofit organization last year.
The process involves lengthy to-do lists: filling out applications, submitting marketing materials, and sometimes attending the meetings to learn about the specific project. It may seem like a lot of work up front, but I believe it’s worth it.
Here are my answers to the most common concerns small businesses raise about the RFP process.
Why should small firms try for RFPs?
1. Networking: I see the process as a networking opportunity: a chance to meet with the potential clients about their wish list for the project. To know and understand the client will be beneficial for future RFPs.
2. Business development: It gives a chance to alter and add to your overall business strategy. For example, our firm decided to submit for an RFP to renovate an art gallery space since we believed that having worked on a museum project in the past (Museum of Modern Art in New York City) would be an advantage for the RFP selection process. Although our firms’ experience has been mostly on the commercial and residential side, this particular RFP provided an opportunity to get into a different project sector.
3. Addition of marketing materials: Participating in an RFP process leaves you with great marketing materials you can use for future project submissions or client interviews.
How often are smaller firms are chosen?
This particular question is not an easy one to answer since clients are reluctant to share the inside story on their selection process.
Typically, clients provide debriefing meetings only to discuss your own submission, without sharing how other bidders (competitors) fared.
The closest to getting specific feedback compared to others would be a “score card” with numbers indicating how many points had been earned on each category, such as past project experience, qualifications, etc.
From my past RFP experience, it is abundantly clear how important the pricing/budget/fee (everything to do with money) category is, and how much submitting the lowest amount for this category will increase the chance of winning the RFP.
I believe this particular pricing information is especially an important one for smaller firms to consider; it gives a leverage to compete with bigger firms through pricing, even if the smaller firm submission is weaker on other categories such as past experience.
What evidence do you have of the impact of winning a RFP on future business
Nothing is certain in life, and the RFP process is particularly competitive. But I believe building experience with clients through submitting RFPs can drastically increasing the chance of winning future projects. That experience and knowledge of a client can help you tailor the submission materials and gain an advantage through the process.