Page 198 - Budgeting for Managers

Small Business Money Management
Know Your Customer’s Approach
When preparing a bid, you want to know the ground rules
and the customer’s concerns. Most customers will be glad to
answer your questions in advance—it helps them get a better propos-
al. Be sure to ask these questions: 181
• Will the lowest-cost bid be chosen? If not, what are the criteria?
• Who will make the decision?
• What are that person’s and the company’s biggest concerns about
the job—time, cost, quality, reliability? Please be specific.
• Is there a format for the proposal? If not, what material is available?
• What is the timetable? Will there be a process of discussion and bid
revision? A process of negotiation? What date will the choice be
made? When will the job start?
well together. Here are some things you can do to make a clear
bid proposal:
•Make a numbered list of the products and services and
features you will provide. Include a line-item budget that
matches those products, services and features.
•Make a clear statement about all expenses, such as trav-
el, per-diem rates, or items you purchase for the client. If
you know the exact cost when writing the bid, include it. If
not, make a two-part bid proposal, one part with fixed
costs and a subtotal, and another part with estimates of
variable costs and a subtotal.
• If you’re offering special rates or a discount, make sure
you put that in writing and also include it in the budget.
•Be sure to include a date past which the bid is no longer
valid. If the customer does not decide by that date, you
may change the price.
For example, if a client asked my company for a two-day
seminar plus a day of consulting about their organizational
structure, this would be an excerpt from my proposal:

Two-day advanced management seminar for 15 executives,
$8,000. This seminar will provide executives everything they