Strategic Investing That Builds Business Fast

Just as savvy investors build wealth through calculated, consistent contributions, successful businesses grow by strategically funding and managing their bid and proposal pipeline. In this blog, we’ll explore how to align your budget with your growth goals, invest wisely in the right mix of bids, and stretch your dollars for the highest return on investment—all before you green-light pursuit decisions.

Identify Your Budget and Growth Target

Start by identifying your business growth target and the budget needed to support capture and proposal efforts. Most firms spend between 0.5% and 2% of a bid’s total contract value on the effort to win it. For example, if you’re targeting a $1M bid, you should plan to invest $5,000 to $20,000.

This investment typically covers:

• Business development and capture labor
• Proposal writing, reviewing, and production labor
• Material, infrastructure, and software costs

Now, align your budget with your growth target. For instance, if you’re a $100M company aiming to grow by 10%, you’ll need to add $10M in new revenue. To do so, you’ll likely need to invest $50,000 to $200,000 annually in capture and proposal efforts. Then, triple that number to $150,000 to $600,000, since most companies win one in three bids. You can fund your budget through operating income, loans, or venture capital.

Budget for the Unpredictable

Procurements are rarely predictable. Schedule slippage, last-minute amendments, and budget fluctuations are common, and often several bids drop at once, overwhelming limited resources. Build in a 10% cushion to each bid budget to help absorb these surprises and ensure you can stay competitive without scrambling.

Develop Your Spend Strategy

Think back to when you first met your first financial planner. They may have shown you a pyramid chart illustrating risk levels:

• The most significant portion of your investments goes into low-risk assets (like money market accounts, high-value bonds, or certificates of deposit)
• In the middle, you have investments like mutual funds, which provide balanced growth at a tolerable level of risk
• At the top of the pyramid are high-risk, high-reward investments

This principle also applies to your bid pipeline. Build a balanced portfolio of opportunities, investing most heavily in your most winnable pursuits while still leaving room to pursue promising new business.

• At the bottom of the pyramid are recompetes—contracts you must win to sustain revenue.
• Next up are opportunities for organic growth on your contracts, followed by expansions with existing customers or similar work with new customers.
• At the top is entirely new work with new customers—typically the riskiest, but potentially most rewarding.

Table 1 illustrates how a company might conservatively allocate a $100,000 bid and proposal budget in accordance with this principle.

Table 1: Conservative Budget Allocation (Example for a $100M Company)

Type of Work	% Budget Allocated	$ Allocated
Recompetes	50%	$50,000
Organic Growth	25%	$25,000
New work with existing customers; similar work with new customers	20%	$20,000
New work with new customers	5%	$5,000
Total	100%	$100,000

Why Timing is Everything

Once your budget is defined, map out a pursuit schedule to distribute your proposal workload as evenly as possible throughout the year. However, front-load your calendar—many bids planned for Q1 or Q2 inevitably slip to Q3 or Q4. By starting early, you reduce the risk of stacked deadlines and burnout in Q4.

How to Stretch Your Dollars

Bidding is expensive. To maximize your investment:

• Leverage internal or shared resources with partners.
• Obtain master service agreements with bid and proposal consulting firms, like Lohfeld Consulting, to serve as a force multiplier or strategic partner.
• Adopt tools to automate the capture and proposal lifecycle, such as AI platforms.
• Upskill your team in capture, proposal management, writing, and Generative AI prompt engineering.
• Pursue certifications for team members to build credibility and improve quality.

Remain Agile

The only constant in government procurement is change. Shifting priorities, delayed RFPs, unexpected amendments, funding cuts, and evolving evaluation criteria are all part of the landscape. To succeed, your pipeline strategy, budget, and schedule must be nimble enough to respond to these curveballs without derailing your momentum.

Conclusion

Creating a disciplined pipeline strategy is not just about pursuing more bids; it is about seeking the right bids, at the right time, with the right investment. By aligning your financial strategy with your business growth goals and maintaining agility throughout the process, you can build a pipeline that maximizes your win probability while protecting your bottom line.

Let Lohfeld Consulting help you sharpen your strategy, build your team’s skills, and win more business. Click here to contact us.

Relevant Information

• Use Mega Bids to Drive Business Growth in June 2025

• 10 Capture Activities You Can Implement Now

• How Ready is Your Capture?

By Brenda Crist, Vice President at Lohfeld Consulting Group, MPA, CPP APMP Fellow

Lohfeld Consulting Group has proven results specializing in helping companies create winning captures and proposals. As the premier capture and proposal services consulting firm focused exclusively on government markets, we provide expert assistance to government contractors in Capture Planning and Strategy, Proposal Management and Writing, Capture and Proposal Process and Infrastructure, and Training. In the last 3 years, we’ve supported over 550 proposals winning more than $170B for our clients—including the Top 10 government contractors. Lohfeld Consulting Group is your “go-to” capture and proposal source! Start winning by contacting us at www.lohfeldconsulting.com and join us on LinkedIn, Facebook, and YouTube^(TM).