Shop Talk 2: Got Your Strategy - Now You Need a Plan

Now, for Step 2: Business Development Planning. I bet you knew what we were going to say - not so simple. Unfortunately, we see a lot of “simple calculators” to tell you what your pipeline needs to be worth, and that is an important number, but it’s not a plan. A plan needs to tell you how much and how many by type (say prime vs. sub and opportunity vs. bid), the timing of expectations (when you expect to complete certain milestones), the cost, the resource requirement, and the return on investment.

So, quick question: do you know any pipeline calculator that does this?

We believe your entire plan needs to be broken down between prime and subcontracting targets and opportunities, and it needs to be driven by the level of growth you want from each. It also needs to consider how much of your business you want to have tied up in any one contract. [We hate to see firms have all their marbles in one basket, only to see it disappear in a re-compete. Even in large firms we see portfolio managers running a P&L with one giant contract as the engine of their business, and one giant loss as the end of it.] As with any investment portfolio, you want to spread your risk in terms of the number and size of contracts you have, and customer concentration.

Now, with some growth targets, a retained revenue projection (what will you keep over the next planning period from what you have now), diversification parameters, and size targets, you can develop a picture of what your pipeline will need to look like in size, scope, variety, as well as the required deal input to generate the necessary output in line with the timing plan.

With these parameters in hand, you can develop two additional critical factors: 1) how many resources are needed to execute the plan (marketing, business development, capture, and proposal), from which you will be able to generate 2) what will it cost. Now set your profit target and burden rates and you can calculate your total BD investment and compare it to your projected profit on the new business brought in to see what your ROI is.

Of course, every plan has certain risks, and the big risk factor here is associated with the probability of reaching your goal given your win-rate vs. a projected number of bids and the available resources. A risk factor you need to take into consideration before planting all your numbers in concrete.

Now, back to our question. Do you have a calculator to do this? Of course, if you have a great mathematician on board, and a lot of patience, you could build one. It would be a pretty cool spreadsheet enabling you to change one parameter and see its impact on the plan. Or you could just ask CLEVER to do it for you😊 Yes, the image below is the CLEVER Pipeline Modeler. It may look a little complicated, but really, you insert the numbers, and it does the work. What is valuable is that it tells you what you need to do, what resources you need to do it, and just how good a plan it is. This allows everyone (BD, Finance, Operations) to all get on the same page, and gives the Executive Team something to really manage with. Then watch the CLEVER Dashboard turn it into a timetable of milestone events.

Annual planning is critical, but a look ahead does not hurt either. So CLEVER thought the Modeler should enable a quick peak into the future, say the next 4 years, so you can have a full 5 year horizon – after that you will just need a crystal ball.

Remember, details matter! And, deals are investments, not costs, so manage them like they are a portfolio of opportunities, not an expense. Have an investment strategy, and then investigate each investment. Now that you have a Strategy and an implementation Plan, we can start the hunt. So, next up is Step 3, Search & Select.