If your home business requires you to search out new business via pitches and proposals, it can be a bit confusing trying to figure out the “value” of the time you spend working on those proposals. Since this is time (and materials) spent that are not directly compensated, it can take away from time you could be spending on other paying clients or customers. But, again, those proposals are necessary in order to get NEW clients and customers who will eventually be paying. How do we evaluate how much time and effort we should spend on proposals and do what is best for both our short-term and long-term bottom line?
The first thing I ask myself is whether or not I even have the time up front to do a decent job on a proposal. There have been times when opportunities have popped up and I have been so swamped with prior obligations that I could not clear out the time and energy to do a decent job on a proposal. In those cases, I had to pass and make referrals for other people who might be able to do the job. If I do decide to consider making a pitch, bid or proposal—I try to do an initial evaluation of how much time the proposal will take—both in research, preparation and delivery; as well as how long it will be before I ever see a cent from the prospective client (if I ever do). For me, I try to think about what I will get out of the proposal process in terms of experience and contacts—even if I don’t get paid. This way, I might do a more complicated proposal for a new prospect with the hope of getting the job, of course, but even if I don’t get the job, I will have gained valuable experience and stretched myself professionally in the process.
Early in your business, you may need to do more proposals just to get things off the ground. I think most of us expect that we will be working “uncompensated” for a while when we first start out and our energy needs to go into building relationships and drumming up contracts and clients. Once we get our businesses off the ground, however, it takes a bit more balance to figure out how much time to spend on existing clients and customers, and how much to put into trying to get new ones.
Also: Does it Really Hurt You to Share Leads and Referrals?
It Costs Less to Keep Existing Customers