Just because you can bid on a contract, it doesn’t necessarily mean that you should. Before investing a lot of time and money into a bid process, conduct a quick ‘Bid, No Bid’ analysis to make sure that the effort will be worth your while. A ‘Bid, No Bid’ analysis can be as simple as a quick mental checklist that weighs the costs against the benefits of bidding for the contract and a realistic view of your chances at success. During this process, you would :
- conduct a cost/benefit analysis
- take a realistic view of your chances of winning, and
- make sure that you can deliver what the customer is looking for.
Perform a quick calculation of the total dollar value of the project that you’re bidding on. Be sure to consider more than just what it will bring in on the top line. How much do you stand to net over the term of the contract? Are there any other benefits? For example, would winning this contract place you in a good strategic position to win others?
Once you’ve calculated the benefits, determine how much time and money will be spent in putting together your bid. If you’re running a small one or two-person operation, don’t overlook the cost of what won’t be happening in your business while you’re working on the bid.
Like any other business decision, the end result, once you’ve weighed the costs against the benefits, should be a positive outcome large enough to be worthy of the effort.A Realistic View of Your Chances
One thing is sure: if you don’t bid on a contract, you won’t win it. However, before you invest a lot of time and money into a bid, you should consider your chances of success. The ideal scenario is to have an existing relationship, with a champion within the organization, great value, a fantastic game plan and a well-written proposal. Realistically, if you can’t have all the pieces to the ideal scenario, try to have as many as possible.
Consider, as well, who your competition is. Is this a bid for an existing contract with a current incumbent? How well is the current incumbent doing and what kind of relationship do they have with the bid owner? If the bid owner is singing their praises, it’s not impossible to dethrone the current incumbent, but it’s going to be pretty darn tough.Be Sure You Can Deliver
There’s nothing wrong with stretching your goals and planning for growth. Before you consider bidding on a large contract however, make sure that it’s something that, with some hard work and planning, you can realistically deliver. Pay close attention to timelines and implementation schedules and the resources you’ll need in order to succeed.