As an advertising manager approved by the proposal plan, it has always been difficult for me to get my management to approve a budget that was based on 40-hour weeks for employees and 50, 60, or even 70-hour weeks for consultants. It simply did not look good: the consultant often cost more per hour than the employee, and received payment for each hour of work that had to be downloaded. However, I managed to stay on budget and win. I would like to share how I did it with you.
So, how do you justify hiring consultants, how do you properly finance offers, and how do you save costs without sacrificing quality?
I am going to review every approach that worked for me. But before moving on to budgeting and savings, I need to look at three general business development spending patterns that need to be shifted before you can think about the effectiveness and efficiency of business goals. If you already are, ignore this message, but read if you find out about it in your organization.
Sample # 1: Do not reduce investment in business development. I find it surprising how few people understand the simple truths in business development. Everyone knows that business development directly contributes to the growth of the company, but some companies do not invest enough money to grow.
Companies must grow or die these days. When they prefer to be conservative when financing business development, their growth is slow. Any disaster, such as a work order for a bakery project or loss of recommendation, can destroy a company.
I worked in at least five companies, where I watched how important it was to make decisions, saving on business development expenses when the situation became tense. This is exactly the approach that forces companies to leave. In fact, at the beginning of my career, I worked in two companies that were sold because they were not very well funded, and I could follow it before they approached business development.
This may seem almost inconsistent, but if a company doesn’t win enough and doesn’t do the same financially, it has to cut spending elsewhere, but spends more money on developing its business. The correct approach is to make business development a priority for the company.
Sample # 2: Do the offers in a limited area? Another example that I would like to touch upon is the desire to keep individual supply budgets very low. Undoubtedly, I understand that you like to have a tight overall budget, especially when you are a small company or a small department. I simply ask a question about the most common logic that usually controls this pattern.
The rule of some people is that they have to save themselves everywhere - just like buying clothes that they always buy only on sale. He is confident that he works on consumer goods, with the exception of a few natural disasters, but is not suitable for business development. The mentality mentality for the proposals leads to cutting out all the important operations of capturing, overworking and fading staff, and decides to save several thousand dollars at the end to reduce the bid angles that could have won if the company had not checked the last few strokes that could take offer from green to blue.
As you know, an offer that does not win means money goes out of the window 98% of the time. It doesn't matter that you saved money by offering this offer, because you lost not only the budget of B & P. You also lose the potential revenues from this contract or other activities that could use this money to win.
Sample # 3: Always use cheaper internal people, not hiring consultants. Let it be frank here. Managers of proposals know that every member of the team of proposals is not the same: there are people who are weight-lifters who can literally carry this offer, and there are those who will work in a small area, sitting diligently in front of the computer and saying a good game, but not producing a lot or nothing good. It all boils down to 80-20 Pareto principles, where 20% of people fulfill 80% of the total supply.
So imagine when 80% of your people pay their low rates for an offer, producing only 20% of work with lower quality. Some employees may be inexpensive, but when some of them pay full-time to do just a little effort, your expenses quickly go out of control. In addition, for internal people, you must consider not only the hourly rate of your salary, but also overhead costs, fringe benefits, and any other compensation you can offer.
It may be cheaper to get one or two expensive twenty percent that can replace a few minors and do a better job.
Until you fall into these three common models, you can win more and grow aggressively. Then you can focus on how to do it most effectively and efficiently. I will talk about the specific practices of incoming messages about how to be smart about how you spend money on business development, and how to implement the right controls, so stay tuned.
