Identifying Proposal Sources

In the formal proposal, you should describe in greater detail what your property management company specifically has to offer the client for whom the proposal is prepared. In general, proposals will originate from two sources: either your company will respond to a request for proposal (RFP) from an owner or investor, which is in essence the client identifying their needs and approaching your company; or you will conduct independent research using the information available to your company to target specific clients whom you want to approach with a proposal, in which case, your company is identifying a potential need and presenting it to the client.

Responding to a Request for Proposal (RFP)

Federal, state, and local governments and institutional owners request complete proposals from real estate management companies based on their specific needs and requirements. The requests for proposals are often referred to as RFPs. You can have your name placed on federal mailing lists by contacting the General Services Administration (GSA). Detailed information can be found on the GSA’s web site at http://www.gsa.gov/. For information related to RFPs originating with state and local government agencies or institutions, contact each agency directly. The format of an RFP will vary depending on the entity issuing the RFP. Governmental RFPs may have common components, whereas many private investors issue an RFP using their own format or the format provided by the management company. It is not unusual for a property owner to ask for a proposal but not specify a required format.

Typically, an RFP is very detailed in terms of the issues a property management firm must address. When you study the RFP, “deconstruct” it. Break down and clarify each question it asks and each point it raises. The goal in reviewing an RFP is to concentrate on issues and themes that reflect the owner’s goals or expectations. Unfortunately, many RFPs fail to state the owner’s goals and other key information you will need to develop a strong proposal in specific terms. If this is the case, you will need to conduct additional research on your own prior to submitting your proposal. However, there are circumstances under which your company is better off not winning certain accounts. Carefully review the RFP and determine whether or not it is in your company’s interest to respond to it. Selecting clients that fit into your overall business plan at the outset will prevent your company from possibly having to terminate unprofitable relationships in the future, thus conserving valuable financial and human resources.

Attend the bidder’s conference if one is held. If one is not held, attempt to make an appointment with the owner prior to responding to the RFP. Doing so has two advantages. Firstly, it allows you to learn more about what the requester is seeking, which will allow you to focus your proposal more accurately on key issues. Secondly, it allows you to meet the people who will be responsible for evaluating the proposals. Even if you are not able to meet the prospective client in person, it is vital that you ask questions. You may find that a good telephone conversation, lively e-mail exchange, or timely fax that elicits a response can provide you with the insights needed to make your proposal better than those submitted by your competitors.

Originating a Proposal Based on Independent Research

Managing information related to current and prospective clients is vital to developing new business. With respect to current clients, use your database to identify other properties owned by those clients that are not managed by your company. For prospective clients, indicate properties owned by those clients, as well as the length of time the client has been involved in real estate. If your firm works with an asset management company, the actual owners of the property being managed as an asset may be a good source of potential clients.

Talk with people at companies that have provided management, leasing, or other real estate services for the prospective client. This will help you gain a better understanding of the client. Questions you might ask include:

• What are the prospective client’s expectations or requirements? In other words, what is the client likely to look for in a proposal?
• Does the prospective client have a “hot button” or a particular interest in management or leasing?
• What challenges, if any, is working for this individual likely to present?
• Does the prospective client have a website? If so, can it provide information that will provide my company with a better understanding of the client?

Visiting the property will also help you gain a better understanding of the client’s needs and how your company may address those needs. During your site visit, identify any major property issues that you would want to address in a proposal. For example, leasing, deferred maintenance, and security problems.

Also, it is often beneficial to identify what other companies are likely to compete for this potential business and assess objectively how your company’s capabilities will measure up.

Once your research is complete, call the client. Review the issues you have identified and ask for an opportunity to discuss solutions to the issues identified that your firm can provide.