Writing Successful Proposals: It's All About the Numbers
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.
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.)
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.
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.
Ray Chambers, CGCM, MBA, has invested over 30 years managing and directing printing plants, copy centers, mail centers and award-winning document management facilities in higher education and government.
Most recently, Chambers served as vice president and chief information officer at Juniata College. Chambers is currently a doctoral candidate studying Higher Education Administration at the Pennsylvania State University (PSU). His research interests include outsourcing in higher education and its impact on support services in higher education and managing support services. He also consults (Chambers Management Group) with leaders in both the public and private sectors to help them understand and improve in-plant printing and document services operations.