Preparing tenders when pitching for work

In about 2001 I sat on the other side of the table from usual as part of the audit committee for a large charity that had put its audit and tax work out to tender.I read some good and some bad written tenders.I sat through some average and some awful presentations. The experience was much the same in 2006 when the audit went out to tender again.

Over the years I learned more from those experiences than from years of reading and studying ‘how to prepare a successful tender”. If only I knew then (ie: when I was preparing tenders) what I subsequently learned from being on the other side of the table.

Here are seven key lessons drawn from real-life experience:

1 – The written tender is like a CV. Its job is to get you to the next stage.Too long and it won’t be read.

2 – Try to ascertain who you are competing with and identify your relative strengths and weaknesses;

3 – Be consistent.If what you say you will do is different to what you promised in the written tender you will lose credibility;

4 – If you claim to be a team, be a team. If you’re not already a team admit it.Otherwise when it becomes apparent (and it will) you will lose credibility;

5 – Do not assume that everyone at the meeting has read your written proposal – some of them may have just scanned it;

6 – Beware that at least one person will challenge something in the written proposal – be prepared;

7 – Plan for the face to face meeting. Anticipate the questions you’ll be asked.Ensure the team will give consistent replies.


Why estimated fee ranges may be better than quoting fixed fees

The traditional way for an accountant to set his/her charges is by reference to the amount of time he/she spends on a client’s affairs.

Many clients however would prefer to be told at the outset what the fee will be and for their accountant to limit the fee to this amount regardless of what comes up during the year. And there are a large number of accountants that will do this for their more straightforward clients.

I still remember a conversation I had with an accountant called Peter in the 1980s. He told me that he typically had the following conversation with new clients where he couldn’t be sure what the fees would be at the outset. This is what I remember him telling me:

Once I have checked what work is likely to be involved I then offer a free quote within a range. All too often, however, the range is pretty wide. For example, £2,000 to £10,000. I acknowledge with a client that the range is very broad and explain why I cannot be more precise at this stage.

I ask for payments on account, equal to the lowest figure in the range, and I explain that one of three things will happen when I issue my fee note at the end of the year. Let’s assume it’s for £5,000.

The first possibility is that the client will say to me, Peter, I can’t believe it. Only £5,000 for all the work you’ve done over the year. It’s not enough. I think I should pay the full £10,000 that you quoted at the beginning of the year.

Peter told me that that doesn’t happen very often, but that it had happened to him, on occasion.

The second possibility, which is the most common apparently, is that the client will say, Peter, that’s a fair fee for all the work you’ve done. I’m very grateful.

The third possibility, which is very rare, said Peter, is that the client will complain that the fee, of say £5,000 is too high.

When that happens, Peter told me, he allows the client to explain why he thinks it’s too high and they then agree on a fee that the client is happy to pay. And Peter guarantees to the client that he will accept that payment in full settlement. However, it also means that he will not be doing any further work for the client!

I don’t don’t hear of many other accountants operating on this basis, which was first explained to me in the 1980s. It was very rare then and I doubt it’s very common even now. But it is fair.

I suspect that these days few clients would accept an estimated fee range as wide as £2,000 to £10,000. But if that’s not the sort of approach you follow you may find that prospective clients keep looking around until they find someone who will.


How intelligent are ambitious professionals?

I was reading a report recently, from Kaisen, about characteristics of partners in professional advisory firms. The report concludes by noting that:

“what distinguishes partners from non-partners are ’emotional intelligence’ factors such as sensitivity to clients’ feelings and psychological needs, and the ability to trust people to ‘pick up’ on what motivates them as individuals.”

For my part though I tend to feel that there is a little too much generalisation in such statements. I know of plenty of partners who do not exhibit the qualities described above. Many of them are also deemed to be successful. Equally there are plenty of aspiring partners and ambitious professionals who DO exhibit those qualities but who will struggle to make partner in an environment that does not value them.

Most academics seem to agree that whilst IQ is one measure of intelligence there are many others that are worth considering – including Emotional Intelligence. Karl Albrecht considers there to be 6 types:

Abstract Intelligence – symbolic reasoning
Social Intelligence – dealing with people
Practical Intelligence – getting things done
Emotional Intelligence – self awareness and management
Aesthetic Intelligence – sense of form, design, music, art and literature
Kinesthetic Intelligence – whole body skills like sports, dance, music, or flying a jet

Conventional wisdom would probably suggest that ‘abstract intelligence’ is the one that is most frequently observed in high achieving professional people.

If you are an ambitious professional how intelligent do you need to be to succeed in your present environment?


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