How To Write a Business Plan RFP
Just as we highlighted in our How To Write a Strategic Plan RFP, a Request for Proposal (RFP) for a business plan is a critical first step to ensure that you receive the level of service your organization requires. A well-written RFP attracts high-quality vendors that will give you a high-quality business plan. Quality requests will also help vendors have a clear understanding of the scope of work, timeline, and deliverables from the outset meaning there will be no loss of time for your organization. Before we get into the specific sections of an RFP, let’s quickly establish a definition of RFP and its purpose. An RFP lists what an organization needs from the hired vendor to complete the project. This list allows vendors to examine the work, decide whether it fits their capacity, and bid on the project in hopes of winning the contract. This process is equally instrumental for vendors as it is for the requesting organization.
Understanding a Business Plan
The first step is not truly about actively writing your RFP but rather focuses on understanding what you are asking for. Having a better understanding of a business plan will help you know what to ask for, but it will also help you better select a vendor when processing proposals. Business plans are often better understood than strategic plans (often business plans are called strategic plans by planners who don’t understand what they are doing), but an overview is always useful. A business plan is a written document that describes how a business/organization will start up and operate. It defines the objectives and how the business will go about achieving these objectives. Typically this outlines how it will achieve these objectives from marketing, financial, and operational perspectives. The reason “start-up” is used rather than just saying how a business will operate is that it is essential that organizations with no past operating experience have a plan to stick to while finding their way. We have highlighted the importance of having a physical business plan when entering into a public-private partnership, and the same tenets apply to a business or nonprofit. A business plan is key at the outset whereas a strategic plan can be introduced or reintroduced throughout an organization’s experience. Additionally, a business plan tends to cover a single year while a strategic plan covers anywhere from three to five or more years. Starting with a business plan is an important step for any new organization. As organizations gain experience and their operations evolve, the business plan should be reevaluated periodically to note objectives that have been completed, set new objectives, and update the operating principles for achieving these objectives.
Some Key Features of a Business Plan
Executive Summary: This will outline the company, including the mission statement, leadership, employees, operations, and location.
Products and Services: The organization will outline its products and services. This outline should include (where applicable): pricing, product lifespan, benefits to the customer, productions/manufacturing process, note any patents, proprietary technology, and R&D
Marketing Strategy and Analysis: A new (and old) organization must have a firm handle on the market sector and its target market. Important factors of this analysis include competition/peer organizations (include strengths and weaknesses), consumer demand, and expected ease of acquiring market shares. As for market strategy, this section will describe how the organization will acquire and keep its client base. This description should include an outline of the distribution channel, advertising plans, marketing campaign plans, and target media channels.
Financial Planning: An important role of a properly constructed business plan is to set up an attractive financial design. This section should include financial projections, a financial plan including targets and estimates. For established businesses revising their business plan, statements, balance sheets, and other financial documents should be included.
Budget: This will include estimations of revenues and expenses related to the operation of the business for a set period of time.
Key Benefits of a Business Plan
A business plan provides a space for partners to turn ideas into a physical outline. This physical document requires details, facts, specifics, etc. The exactness required by a physical document will expose where issues are. A business plan makes things visible. You can see if your strategic alignment connects with your plan. You can see whether your product matches your target market. You can see if you will realistically cover your costs. Putting these details in writing exposes oversights. You are forced to work with facts and apply numbers. This will highlight the areas where your operation may need fine-tuning. Furthermore, it is an opportunity to show the opposite. A well-developed business plan can attract the right attention. It can motivate you and your team and even attract outside investors or donors. Before putting their money in play, investors/donors want to see a plan with real figures and expanded ideas rather than incongruent ideas stored in multiple partners’ minds. Similarly, before putting your own resources into a business or nonprofit, make sure you and your partners have a shared mindset and ideas by crafting a thorough business plan. To get a better understanding of where this fits in the planning process read more in our What are Business and Strategic Plans blog.
Now, let’s get into what the RFP should look like...
The Form
Introduction of Purpose
In this first step, you will explain that you are looking for a business plan. This section is a broad description of your need for a business plan which will be expanded upon in the later sections. This introduction is a good point for you to step back and really consider your goals, how a business plan will help your organization be prepared for its next steps, and any important factors that vendors should know. Get your major interests in a shortlist to reference and stay on track throughout the RFP writing process. Now for the introduction, you will explain...
Why are you distributing this RFP?
What problem do you need to overcome or improvement you are looking to make?
What do you want to achieve?
Include key big picture details (time frame, etc.)
The introduction’s role is to give a brief section at the outset that informs vendors of the overall goal of this RFP. In this case, they ought to come away knowing that you are looking for a thorough business plan with your specific starting time. With an understanding to a business plan, you will be able to analyze whether certain vendors will meet your needs.
Background
The RFP process is not one-sided. Just as you are selecting a candidate, those who see your RFP have to make a decision about whether they want to work with your organization. Offer them the right information to make a well-informed decision about working with you. Supply a succinct history of your organization and the goal for the project. Make sure that the background information offers enough information for vendors to evaluate your organization's current standing. Some key features of this are...
What does your organization do (think mission and vision here)?
What are your core values?
What makes your organization different?
By sharing your core values and the unique aspects of your organization, vendors will be able to understand what it is like to work with you and how that will complement the skills and experience they utilize in their planning process.
Project Description/Scope of Work
The project description and scope of work is a critical component of an RFP. Although business plans are more commonly understood than strategic plans, it is still important to be thorough in this section to ensure your vendors are informed of exactly what you want. This section is where understanding the components of a business plan is incredibly helpful. Being thorough with your scope of work and project details will ensure that vendors can deliver the service you need. If you are not thorough, vendors will have a difficult time determining whether they fit the project’s needs. This is also the section to include your budget and experience preferences.
Timeline
This section is quite straightforward but nevertheless important. Include the important deadlines of which vendors should be aware. Some key deadlines to consider including:
When do you need responses?
When will you announce your selection?
When will the project begin?
When is the final project deadline?
The reason you want to include deadlines for the project itself is that many vendors have other clients or smaller teams. By having access to your deadlines, they can make a decision about whether they can complete the project within your time constraints. You don’t want to hire a great team only to change your deadlines, leading to a poor business planning experience. Remember that the longer your proposal requirements are the more time you should allow for responses.
Application Process
Be direct here, vendors will thank you. Explain the structure you would like to see in the responses. It helps vendors to know exactly what they need to do. It will also help you when selecting a proposal. When all of the proposals are in the same format, you will be able to compare them efficiently and effectively. Having these details also makes quality vendors more interested in your proposal because it is straightforward, giving them confidence in their application and your aptitude as a client.
Selection Process
Finally, note how you will go about selecting a proposal to get the contract. Here you can explain what your organization prioritizes (specific credentials, criteria, specific experience). For example, you may want a firm that has experience crafting business plans for outdoor cultural attractions rather than just nonprofits broadly. Including this information, allows vendors to put their best foot forward and explains what skills they have that match your needs.
Help Your Vendors and Get the Right Responses
Use Subheadings and Bullet Points
Organizing your RFP with headings, subheadings, and bullet points is helpful for you and vendors. The clearer your RFP is the better chances you have of getting responses from the best vendors. Vendors will be more interested in working with an organization that puts out a quality RFP because vendors want to know what is expected of them in all aspects of the project. Using these organizational features makes your RFP clear as well as scannable.
Understand What You Are Asking For
If you do not understand what you are looking for, you aren’t in a position to evaluate and choose a vendor. Make sure you understand what a business plan is before writing your RFP in order to attract proposals from vendors that will give you a business plan that suits your needs. Check out our blog on What are Business and Strategic Plans and research what peer organizations’ business plans look like. This will all help you to understand what goes into the planning process.
Details not Orders
Being thorough is essential. It will help vendors understand what is expected of them across the whole project, but this does not mean you should tell them how to do their job. There is a reason you are sending out an RFP, you need help with a project. You will get more and better responses if vendors feel they have creative freedom to use their skills and insights to help improve your organization.
Proofread and Revise Your RFP
Don’t let a messy RFP turn away high-quality vendors. Reread your RFP several times to ensure that it is free of spelling and grammatical errors. Also, look out for clarity. Any unclear or confusing portions could result in less efficiency as you receive and review proposals or during the onboarding process. Make sure it is easy for vendors to clearly understand what you are looking for, so in turn, you will understand what they are proposing. Your RFP is a big deal! It is the first step toward a big undertaking that should greatly improve your organization. When you are undertaking the selection of a planning firm you are undertaking the spending of $25,000-$35,000 (depending on what is being asked it could be significantly more, for example, the amount of market research to be done can vary quite a bit), so we are strong advocates of helping nonprofits spend that money on a proper business plan.
Business planning is a critical, but often underappreciated step toward achieving success and growth as a small business, nonprofit, or public-private partnership.
Interested in organizing your nonprofit, small business, or public-private partnership? We want to help prepare your organization to meet its goals and maximize the potential of your ideas. Click the button below to connect with us for a business plan consultation.
