This chapter on RFPs is about one-tenth of this book, and will probably be far less than that in most of your businesses and markets. I wanted to equip you with some of the top devices and approaches for maximizing your success should the proper circumstances present themselves.
However, I want to end this chapter with the advice that you will not grow a major business by responding to RFPs. There are firms that do this frequently and well, but they are very large, have other diverse income streams, or are highly specialized to work in government, institutional, nonprofit, and similar arenas. For solo practitioners these can at best be a peripheral and rare source of income; for boutique firms, perhaps a bit more. If you’re not a sole-source provider, and can’t have “bespoke” RFPs crafted for you, then this is not a propitious marketing endeavor.
Frequently, newer consultants will ask me about the viability and sustainability of a given market, such as education, or nonprofit, or government. I tell them that these are not pragmatic and high-potential choices. They argue back that they are passionate about them and:
- Know people making millions in that market.
- Can make it work.
- Would have the market to themselves.
- Are better than anyone else in the market.
Sorry, no cigar, not even close.
First, talk is cheap, and there aren’t people making millions in those markets with the exception of some very large or highly specialized firms.
Second, passion is wonderful but not an anodyne. You can be passionate about flying, but flapping your arms and jumping off the garage will simply make you a public spectacle if you’re lucky, and a corpse if you’re not.
Third, having 100 percent of nothing is not valuable and you wouldn’t have the entire market no matter what you think.
Fourth, I admire the high self-esteem.
People have long asked me how to make a lot of money. I tell them not to find a way to make a lot of money and try to become passionate about it, but rather to find something they’re passionate about and try to make a fortune doing it. That may seem to contradict what I’ve written above, but it’s highly consistent, in that what you’re passionate about also has to have a viable market and high-value need. I’m passionate about exotic cars and electric trains, but I don’t attempt to make my fortune by advising on either. These are avocations, not occupations.
Glossary
Avocation: A hobby or pastime that provides emotional gratification and that needn’t provide income or career opportunity. Some avocations may lead to occupations.
Occupation: A person’s usual work, job, or business that provides the financial sustenance to support a chosen lifestyle.
My point here is that RFPs are not likely to be able to sustain your occupation, in this case, consultant (or coach, facilitator, advisor, and so on). They are remote possibilities, which, on special occasions and/or at certain points in your career, may yield additional revenues and profits. They are not a fundamental marketing avenue nor source of income.
Run for the hills when you find:
- Your primary pipeline is “clogged” with RFPs.
- You are spending more than two hours a week on RFPs.
- You actually seek them out and place yourself on lists to receive them.
- Most of your delivery work is for RFPs.
Among the problems for you as an independent consultant or boutique firm owner are that even if you’re successful in attaining these projects, the profit margins are inevitably thin. If you’ve made a mistake in calculation, or allow scope creep or scope seep to develop, it’s not uncommon to actually lose money when delivering RFP projects.
You also will seldom receive referral work, which is the important second part of most sales when you close new business. You’re working with low-level people, rarely meet a buyer, and the process is such that the only referrals you’ll receive are to be on other RFP invitational lists, not for any direct business.
Although electronic submissions have negated the old “fill this out in triplicate” needs (in some, but not all cases, by the way), you’ll still find these highly labor intensive to complete, with a degree of detail almost unimaginable (e.g., what will occur in the morning session from 10 to noon; where will lunch be served; provide 12 references for whom you’ve performed this exact kind of work).
These projects invariably require—demand—that you specify exactly how much time you’ll be on-site and someone—you can bet on this—will monitor these appearances. The labor intensity is severe. If you do not provide the agreed-upon number of days—even if all other metrics are being fulfilled—the client may ask for additional time or withhold some payments.
Payments are highly delayed. That includes initial payments, in-progress payments, and expense reimbursement. Forget about your dates, your amounts per payment, your terms. Not only will these be stipulated, but they’ll often be abrogated by the client! You can complain all you like, but you have no buyer to provide clout and no leverage with anyone.
Projects can be delayed or even cancelled unilaterally. There is usually “boilerplate” language about this, but it doesn’t matter. You’ll be notified and expected to accept the decision.
I paint this dismal picture deliberately, because RFPs are situationally attractive, but not regularly beneficial. They’re often the last resort of consultants who fear an empty pipeline or lack of business. But they actually can detract from marketing and business, and steal needed time from more pragmatic and profitable business alternatives.
You’ve been apprised. RFP: Really Finicky Prospects.
Notes
1. I’m talking about MBA and PhD, not an alphabet of honorifics bestowed by entities such as “coaching universities,” which no buyer has ever heard of. Every time I see three or more initials I can’t readily identify, I get suspicious about credentials.
2. Note that I refrain from saying “buyer” because you’re really not dealing with one directly.