Improve Your B&P Budgeting Process

Prioritize and Model for Budget Honesty

Establishing a balanced pipeline isn’t the only factor to capturing revenue. Now that you know what you are targeting, the question becomes: can you afford to pursue them all—and really, can you afford not to?

Prioritize

Let’s be real—it’s probably not in your best interest to spend your entire budget in the first six months, nor is it smart to pass on good opportunities now to hoard B&P for RFPs that may slip later in the year. Prioritizing allows you to see if your pipeline is front or back-loaded and then balance your reserves to bid on opportunities you’re excited to pursue and best positioned to win.

How? There are dozens of tools on the market to track opportunities, including market leaders such as GovWin and SalesForce, but I’ve found a good ‘ol fashioned Excel spreadsheet or white board often does the trick. No matter what tool your company uses, start prioritizing by selecting the top five non-negotiable, absolutely-must-bid-no-matter-the-cost opportunities and rank them all #1 or A Group. Then, select the next five and rank those #2 or B Group, and so on, until you have prioritized your pipeline into ranked buckets of opportunities.

Why? In our experience, buckets are important because we’ve seen companies become distracted by debating the merits over a #11 and a #12 opportunity, when in the scheme of things, both RFPs are equally important. By placing near equals in the same bucket, you remove the emotional and qualitative influences in prioritizing. This also provides a way for companies to equally rank opportunities across different customer segments and divisions.

We created this B&P spreadsheet for a client using an export from GovWin coupled with a ton of human intervention and data points: multiple corporate divisions, contract vehicles, and office locations. Even though it looks daunting, fundamentally it provided our client with a clear understanding of the internal and external resources needed.

We created this B&P spreadsheet for a client using an export from GovWin coupled with a ton of human intervention and data points: multiple corporate divisions, contract vehicles, and office locations. Even though it looks daunting, fundamentally it provided our client with a clear understanding of the internal and external resources needed.

Model

Once prioritized, we’ve found the next biggest barrier to chasing that pipeline is creating a meaningful B&P budget and then sticking to it. In our experience, the best way to do this is by estimating the level of effort—just like you would any other project plan—using a top-down analysis. Obviously, without a live RFP, you will need to make some assumptions based on your capture activities, but that’s okay. This initial budget number is for planning purposes only (and to present to your executive team for funding).

How? First, for each opportunity in your current pipeline, estimate things like how many days between release and due date, how many volumes, and the overall format of the proposal. If you are lucky enough to have a draft RFP or a client that has been openly communicating with the industry, you may actually have some pretty solid direction on these items.

Then, start assigning labor to these factors from the standpoint of how many days, pages, graphics, revisions, meetings, supplies, and so on, that will be needed. Finally, layer the nature of the proposal into your equation. A proposal that’s technical in nature and heavy in jargon, acronyms, and key word compliance may take more time than a routine task order on an established contract vehicle.

Sound a little daunting? It can be. To help you out, we developed a quick and dirty B&P calculator that builds a level of effort estimate. Our calculator includes standard turnaround time averages we use to estimate the time, effort, and manpower needed to support our clients’ proposal projects. You can use it to forecast your total hours and then multiple against the fully-loaded labor rate for your personnel to calculate your B&P budget. We’re sharing because we get it—budgeting isn’t easy—and having a tool at your fingertips could come in handy. Plus, we like to share.

Why? In the end, this process enables you to not only forecast with some confidence, it also allows you to look back at the prior year to see if your budget and actuals were aligned. Over time, you can even build standard budget models for the different types of proposals your company pursues (for example, an Alliant Small Business task order costs X and a complex single award 60-day proposal costs Y). That would certainly make your B&P planning process easier, wouldn’t it! And, of course, having experience budgeting your proposal efforts makes it easier to react quickly when an unexpected opportunity pops up that is right in your core area of expertise.

A word about other overhead costs. A better understanding of the true number of hours your internal and external resources are dedicating to each proposal may be a wake-up call. Companies that don’t use total time accounting may not track this labor investment and mistakenly consider it a sunk overhead cost. But all the extra work pursuing proposals (on top of 40-hour a week client obligations) can create a toxic environment for personnel, lead to increased turnover, and cause you to lose great talent. By putting a dollar value on the time your personnel spends on bids, you’re able to better understand when you’re at the point of needing to hire or engage external support.

We’re Here to Help

For more on this topic, join Jennifer on November 16th for a webinar on how to Never Say NO to a YES Proposal Opportunity. She will share tips on how to maintain a healthy and balanced opportunity pipeline, prioritize your efforts, determine the real cost of pursuing each opportunity, and gather your team to execute the work of responding so you never have turn a proposal down due to being unprepared.

Not able to make the webinar? Get on our calendar! We’d love to hear about your current opportunities and share how our tools and proposal management experience can make your process easier and set you up for success.