Writing Successful Proposals: It's All About the Numbers

As managers we have all been faced with situations where we needed to invoke change. Maybe we’ve had too few or too many employees. Maybe we needed to add a new piece of equipment or get rid of an old one. Maybe we needed a new facility. The common element in all of these change initiatives is that, most likely, we’ve had to convince someone at a higher level that action was needed.

A successful proposal must address two critical factors. The first is relevance; that is, why is the topic of the proposal important? The second is impact—what pain will be alleviated and/or what gain to the organization will be achieved by adopting the change?

One might think that relevance would be self evident. Your shop is part of the organization, therefore the organization will benefit from adopting your initiative. Unfortunately, this may not be the case. The in-plant competes with all facets of the organization for scarce resources, and administrators have to make tough choices when deciding where to make investments. If the proposal cannot show a direct contribution to the core purpose of the organization, it is not likely to be approved.

When we talk about impact, we must show both the value of the proposed change and why the change is important. The pain could be high costs, missed deadlines, poor image, or any number of other adverse outcomes. Gain is just the opposite. In our role as in-plant managers, gain usually refers to reduced costs, improved quality and/or expedited delivery. All are important, and all must be linked to the organization’s core purpose.

Moreover, when we talk about impact we need to be as specific as possible. Craft your argument with facts and data, and avoid relying on opinion. You might also research successful proposals from different areas of your organization to use as models.

A common scenario with my higher education clients goes like this: “You need how much for a new digital press? Do you know how many faculty the university could hire for the same amount of money? Or how many labs could be upgraded? Or how many classrooms remodeled?” It’s all about the money, so if you want to your proposal to be approved, you need to show why it’s important and how the organization will benefit.

Anatomy of a Proposal

Mission: It is important to establish your role in the organization’s success, so your proposal should begin by restating your purpose and why what you do is important. Many times the in-plant manager skips this step or makes a general mission statement like “Printing Services exists to print stuff,” but he or she overlooks why this may be important. An effective mission statement does both: “Printing Services provides timely printed materials of the highest quality at competitive prices in support of the university’s academic mission.”

Problem Statement: Next you want to describe the pain. What is the problem that you are addressing, and why is it important? A common theme for in-plants is the need to upgrade or replace production equipment. As in-plant managers we may know that a particular piece of equipment is declining in efficiency, but we need to express our perceptions in terms the administrative suits will understand. “The two-color press is 20 years old and should be replaced” isn’t enough. You must also include data. How much have maintenance costs gone up? Are parts still available? Are newer presses more efficient? Will a newer press improve your production rate?

Methodology: This section is a snapshot of your thought processes and the assumptions you made in arriving at a solution to the problem. You might begin by describing the steps you took to arrive at your recommendations. This could include contacting vendors, attending trade shows and networking with other in-plant managers, as well as online research.

You should also identify assumptions used to clarify the analysis. These could include price discounts, reserves for service, benefits, labor costs and the like. Be sure to include assumptions of future revenue performance, especially if you recover your costs.

Alternatives: The decision makers in your organization—the folks that will read and approve or disapprove your proposal—expect to see evidence that you have evaluated multiple solutions before arriving at your final decision. They want to know that you have considered a range of alternatives, so be sure to include them.

Analysis: The suits at the executive level look to us to manage the resources we are given to do our jobs. That means in order to make a change we have to demonstrate the advantages of adopting the proposal—the gain—as well as the costs to the organization of not approving your solution. The analysis should include complete income and expense estimates for each proposed alternative.

Measures based on qualitative criteria, customer service and print quality for example, may be used as part of the analysis if they are supported by quantitative data. If your customer satisfaction survey indicated widespread displeasure with your delivery times, for example, addressing that issue would have a role in the analysis; however a proposal based primarily on qualitative analysis is not likely to succeed in most cases.

Recommendation: This is where you build your case by explaining the complete details of your

recommendation. How, specifically, do you plan to address the problem? What resources will be needed? Will training be required? What about job descriptions? Remember, the goal of the writer is not only to convince top management to approve the change but also to convince them that this is the right choice, that you have based your argument on sound logic and data, and that your proposal is the best alternative given organizational and resource constraints.

Sample Proposal

So, what would a proposal look like? Here’s a sample of selected portions from an actual proposal to add a digital press to the copy center at a university:

• Demand for existing Copy Services will remain stable.
• The existing revenue stream will continue to recover all fixed, administrative costs.
• The amount of printing currently purchased by the university is sufficient to justify the new device.
• Machine cost assumptions are based on the National Association of Printing (NAPL) Interactive Cost Studies for Print Operations of up to 20 employees (ver 4.1, 2009) and a single shift and include:
  a. Machine cost at manufacturer’s list price ($320,250). We understand that substantial discounts are available to state agencies.
  b. Depreciation at 10 percent straight line.
  c. Direct supplies at $3,000 annually (does not include consumable supplies included in direct job costs).
  d. Repairs and maintenance at 2 percent of manufacturer’s list price.

• Consumable cost assumptions are based on Printing Industries of America (PIA) annual ratio studies of top performers, including:
  a. Paper cost is 25 percent of total print expense.
  b. Ink cost is 8.75 percent of paper cost.

• Labor cost and benefit assumptions are based on personal experience.

The proposed device is a new installation, so historical data was not available for analysis. Rather, we constructed a cost model based on actual costs and, in some cases PIA Profit Leader benchmarks. (See table 1 in photo box.)

Findings

Based on these assumptions, Copy Services must generate $116,642 annually in new business to cover all estimated costs. The break-even point occurs when the revenue target equals the estimated cost.

We also know that the Agency purchased $220,000 during the first nine months of 2008. Using the same set of assumptions, had the purchased jobs been produced by Copy Services for $220,000, the transactions would have generated excess revenues of $76,700 (i.e., $220,000 minus $145,286 in estimated operating cost of the new machine. See table 2 in photo box). In other words, the university spent about 35 percent more than necessary by purchasing the jobs from commercial sources.

Conclusion

Writing a proposal is a straightforward process, but your success or failure will depend, in part, on demonstrating the financial advantage of your proposal and how the investment helps the organization reach its strategic goals.