Power Proposals - How to Write Less and Win More

Posted by Adrian Davis 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sooner or later, you're going to hear these words, "Sounds good. Why don't you send me a proposal?" Of course, you've already heard them and you've already experienced the mixed emotions - the thrill of knowing you're close to the finish line and the agony of knowing there's a lot of work ahead of you and it could be for nothing.

How do you ensure you don't waste your time? How do you ensure that your proposal stands out, is read and most importantly, is approved and acted upon?

Rule #1: No Surprises
The mistake most people make is withholding vital information, such as pricing. The purpose of your proposal is not to sell your buyer. Let me repeat that. The purpose of your proposal is not to sell your buyer. It is to crystallize everything you've spoken about in a single document that can be acted upon. Your selling job is done. You must pass the baton on to your buyer. Proposal in hand, your buyer must now do the selling and get the necessary internal approvals to move forward.

Rule # 2: Write for the Final Decision-Maker not Your Buyer
By the time you get to the proposal stage, you've developed a pretty good relationship with your buyer. Do not submit your proposal "to" your buyer. Be sure to submit your proposal "through" your buyer. It is a very rare organization today that has a leader that will make significant decisions unilaterally. No matter who your buyer is, they will most likely have to consult with one or more other people before signing off. Ensure you understand how the approval process works. Rather than submit your proposal to your buyer, work alongside your buyer.

Always work from a document stamped, "Draft - for discussion only". The most important benefit of doing this is giving yourself permission to be wrong. As you sit down with your buyer, you can be side by side rather than across the table. If the buyer feels you are submitting a final document, he or she immediately moves into Accept or Reject mode. This puts them across the table from you. When you work from a draft, you are working together to ensure the wording will work for them. As they consider their relationship with the final approver(s), they can soften or harden the language, include or exclude certain elements and restructure or reframe your logic.

Rule #3: Focus on Results and the Next Action
Think about what you're really proposing. Don't get caught up in your credentials or boiler plate formalities. Stay focused on the results your buyer wants from you. That's all the buyer really cares about. How will you improve their condition? Everything else is a footnote. Far too many proposals begin with, "ABC Company is pleased to submit this proposal... blah blah blah." You need to come out swinging. There's no time to risk disengagement.

Remember, it is highly unlikely that you will be present when the final decision is being made. In fact, people who may have never met you or even heard of you may be deciding your fate. Your value must now be represented by your proposal.

In addition to having a singular focus on results, you must also have a very clear next step. Your methodology is too much to act on. It's also academic. What actually happens may or may not unfold as you've outlined. What matters is your commitment to your buyer's success. If your buyer trusts you, they'll take your methodology on faith. What's really important is your concrete and clear next step.

Economic slowdown speeds up drive for acquisitions

JACOLINE LOEWEN

The Globe and Mail

Published Tuesday, May. 28 2013, 5:00 AM EDT

Gloomy pundits and unfavourable macro-economic news can lead business owners to shelf plans to sell their companies, but the smart ones don’t try to time the market, nor do they wait to be courted. They actively seek out buyers.

They also watch for micro signals within their industry because the implications of small shifts in one area can signal bigger changes ahead.

Spots of activity are happening across the ethnic food industry in Canada, which is highly fragmented, with a wide scattering of companies making revenues from $10-million to $100-million. These owners are often running lifestyle businesses and they serve a niche market, such as tropical fruit drinks and spicy snacks for Asian customers.

The range of consumers clamouring for exotic tastes such as coconut water or tandoori-barbeque flavoured chips is expanding. Big companies, including Pepsi and Loblaws, are private-label innovating in this segment. Owners of ethnic food companies are finding their products moving from the back shelves to front-and-centre at the big-box retailers and gas stations to catch the consumer eye.

There are few large ethnic food players in Canada to keep a good balance of power with the corporate retailers and wholesalers who have been consolidating. The opportunity is ripe for a large company to roll-up the smaller ones and create a significant ethnic food business.

The economy continues to make it a struggle for any company to increase revenue by building capacity through its own efforts. Buying smaller businesses as “add-on” acquisitions is an attractive strategy for organizations that want to boost sales. Larger buyers can acquire smaller companies at lower risk because they bring a niche client base that would take years to develop.

As the economic slowdown continues, there has been an increase in the drive for acquisitions – sellers of ethnic food companies have a chance to turn this situation to their advantage. If they identify the major players in their industry and look at the acquisition activity closer to home, they can create a sale opportunity.

There are many moving parts for a seller in a fragmented industry such as ethnic foods, and to suggest the complexity of the selling process can be reduced to a handful of points is a risky proposition. With that caveat in mind, a seller should start by asking three questions:

1. What is the buyer seeking?
As management guru Peter Drucker has said: “The purpose of a company is to create a customer.” If you understand your target buyer’s customer focus and figure out what it is trying to offer consumers, you will gain insights into how your company can add something unique to that buyer.

“With ethnic foods, would the buyer be interested in adding to their product mix and bringing something new to their consumer’s table?” asks Kamal Baig, former CEO of a tropical drinks company in Toronto. “When you have products with a unique niche, this is a powerful addition of loyal consumers, and there could be the potential to scale up the amount sold.”

Perhaps the buyer’s larger distribution network would give your innovative products exposure to a new set of consumers while refreshing a brand?

2. How would a buyer look at my business?
How would your business fit into the buyer’s company? Be able to explain the synergies your firm would bring and how these would benefit the larger, platform business.

For example, will there be efficiencies if manufacturing is combined?

3. How can I know what my business is worth?
Your business is worth what a buyer will pay. Sellers often make the fatal mistake of conducting serial negotiations, which is a recipe for a poor valuation.

Jacoline Loewen is a director at Crosbie, which focuses on succession advice for family businesses and closely held small to medium-sized enterprises. Crosbie develops customized strategies, particularly in relation to M&A, financing and corporate strategy matters. Ms. Loewen is also the author of Money Magnet: How to Attract Investors to Your Business. You can follow her on Twitter @jacolineloewen.