How to Write an RFP as an SME: Step by Step

Most small businesses pick a supplier based on a recommendation or a quick search, sign the contract and move on. Comparing options feels like a luxury when you are running a business. But skipping that step costs real money. Bain & Company found that 43 percent of total business costs go to external procurement. At those amounts, even a small difference in price or terms adds up fast. More numbers: SME Contract Management Statistics 2026.

A request for proposal (RFP) forces you to compare in a structured way. Not to add paperwork, but to make better decisions. Two hours of preparation can save thousands per year.

When do you need an RFP?

Not for every purchase. Ordering printer paper does not require a formal process. But in these situations, it pays off:

Above your internal spending threshold. Most SMEs do not have a formal limit, but a rule of thumb helps: anything above 5,000 per year deserves a comparison.
At contract renewal time. When a contract is about to expire, that is the moment to test the market. See: contract renewal.
When starting a new supplier relationship. Especially for multi-year contracts.
For complex services. IT, cleaning, insurance, leasing: services where price-quality is hard to judge without comparison.

More on the difference between RFPs and RFQs: RFP/RFQ.

What goes into a good RFP?

An RFP does not have to be twenty pages. For most SME purchases, a structured one-to-two-page document with these elements is enough:

Description of the need: what do you require, and at what scale?
Requirements and preferences: what is mandatory, what is nice to have?
Evaluation criteria: on what basis will you compare proposals?
Timeline: when do you need proposals, when does the contract start?
Response format: how should suppliers structure their proposals?

The more specific your request, the more comparable the responses.

Step 1: Define your requirements

Start with yourself, not with suppliers. Write down exactly what you need. Not "we need a cleaning company" but "we need cleaning for 4,000 square feet of office space, three times per week, including bathrooms and kitchen."

Be specific about:

Scope and quantities. How much, how often, how many users?
Quality standards. What are the minimum requirements? Are certifications needed?
Delivery timelines. When does it need to be delivered? What is the lead time?
Contract duration. Are you looking for an annual contract, a multi-year agreement, or a one-off delivery?

Vague questions produce wildly different quotes, making comparison nearly impossible.

Step 2: Set evaluation criteria

Decide how you will evaluate before you send the RFP. Not after, because then you end up choosing on gut feeling. Common criteria include:

Price (but never as the only factor)
Quality of the product or service
Delivery time and reliability
Contract flexibility (notice periods, renewal terms)
References and experience in your industry

Assign a weight to each criterion. For example: price 40%, quality 30%, delivery 15%, flexibility 15%. This prevents you from always picking the cheapest option while that supplier underperforms on service.

Step 3: Select suppliers

Invite at least three suppliers. With two you have a comparison, with three you have a market picture.

Use your procurement strategy to decide how much effort to put into selection. A strategic supplier for your core process deserves more attention than a stationery vendor.

If you have worked with suppliers before, use the results of your supplier evaluation as input. A supplier that underperformed last year does not need a second invitation.

Step 4: Send a structured request

Send every supplier the same information. This sounds obvious, but in practice one supplier gets a detailed brief while another gets a quick phone call. The result: proposals you cannot compare.

Practical tips:

Keep it short. For straightforward purchases, one page is enough.
Set a clear deadline. Suppliers take requests more seriously when there is a concrete date.
Ask for a consistent structure. For example: summary first, then pricing, then terms. This makes comparison straightforward.
Include your contract terms. If you use standard procurement terms, send them along. That prevents disputes after selection.

Step 5: Evaluate and select

Score proposals against your pre-set criteria. Ideally with two people, so you do not rely on a single perspective.

Look at total cost of ownership, not just the headline price. A supplier that is 10 percent cheaper but offers no maintenance can end up costing more over a year.

The data backs this up: structured procurement delivers an initial cost reduction of 8 to 12 percent, with an additional 2 to 3 percent annually thereafter (Bain & Company). That saving starts with comparing proposals properly.

Common mistakes

Comparing on price alone. The cheapest supplier is not always the best choice. Quality, reliability and contract flexibility matter.

Starting too late. If you need a supplier next week, there is no time for a proper RFP process. Plan well ahead, especially around contract renewals.

Not including contract terms. If you only discuss terms after receiving proposals, you risk the supplier defaulting to their own conditions. Include your terms in the request.

No clear evaluation criteria. Without criteria you evaluate on instinct. That leads to inconsistent choices and makes it difficult to justify your decision afterwards.

Inviting only two suppliers. Two proposals give you a comparison but not a market view. Three is the minimum for a reliable picture.

Conclusion

An RFP is not a bureaucratic exercise. It is one of the cheapest ways to reduce your procurement costs. Two hours of structured preparation can save thousands per year.

Want to get systematic about procurement? Start with a procurement policy that defines when you request proposals, from how many suppliers, and on what criteria you evaluate.

The impact of good procurement management is significant. World Commerce & Contracting estimates that poor contract management costs organisations an average of 9.2 percent of their annual revenue. Much of that loss starts at the supplier selection stage. More data: SME Contract Management Statistics 2026.

Sources

Bain & Company - Procurement Excellence - research on cost savings through structured procurement strategies
World Commerce & Contracting - Benchmark Report - data on contract leakage and revenue loss across organisations
CIPS - Chartered Institute of Procurement & Supply - professional standards and guidance for procurement
PIANOo - Dutch Public Procurement Expertise Centre - guidelines for professional procurement practices