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The One Document You Need to Start Doing Business With Big Companies

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The One Document You Need to Start Doing Business With Big Companies

Twice in the past week, I have received a panicked phone call from a Small Business owner.  I’m sure that panicked phone calls by Small Business owners to their advisors are nothing new for many of our readers, but these two people were completely at a loss as to what to do.

In both cases, they had been asked by a potentially large client (a mining company in one case, and a government department in the other) for a “Capability Statement”.

One of my business owners actually knew what one was, but had no clue how to prepare one or what should be in it.

The second person told me that they had no option but to endure the uncomfortable silence that ensued – they had no idea what a Capability Statement was, so they couldn’t even answer yes or no.  Probably not a good look when you are pitching to a very large prospective client and your company’s future may depend on just that meeting.

So, what is a Capability Statement?

A Capability Statement is a cross between a company brochure and a business card on steroids. In short, it tells your prospective client exactly what you and your company are capable of doing – your capabilities.

Think of it as your company’s resume, telling your prospective client how you will solve their particular problem.

Like a good resume, you will also tailor your Capability Statement to the individual client you are trying to attract. In each one you will address that client’s particular issues, and how they will benefit from engaging your company.  If you serve several market segments, prepare a separate capability statement for each segment.

For example, one of my own companies provides services to both the agriculture and mining industries. These are two very different markets, so a different Capability Statement is appropriate for each of them.

You need to clearly convey 4 things in your Capability Statement:

Capabilities: What are your competencies?  What is it that you do? What products or services do you supply? What areas do you serve?  What size projects can you undertake?

Differentiators:  What makes you different from your competitors?  Why should they choose you? Do you have any special licences, patents, equipment, software? What is your Value Proposition?

Company Details:  Details about your company such as your contact details, company structure, ABN, insurances and such.

Experience:  What experience have you had doing similar work to that which you are pitching to your big client.  Who can your prospective client contact as a referee?

Why have a Capability Statement?

  1. Because you have to: When applying for Tenders (see my previous Smallville post), you will often have to submit your Capability Statement. In fact, for many companies, this is a must, and not having one will rule you out of contention at the first hurdle.
  2. Communication: A Capability Statement is a powerful communication tool.  In the world of big business and centralised procurement, it can be hard to make your message heard, It lets your prospective clients know the facts about your company so they can make initial decisions about engaging with you.
  3. Building trust: First impressions are important and a well prepared and informative Capability Statement is a strategic marketing tool. It is often the first touch point that starts the process of building trust between your two organisations.  It may even contain some commercially sensitive information that has been prepared especially for a particular prospect.
  4. Differentiation: Your Capability Statement is the ideal tool to reinforce your brand and your value proposition.  This is your opportunity to tell your prospective customers exactly why they should engage you rather than your competition.

Make it look good

Your Capability Statement should be a visually attractive document, so engage a designer if your skills don’t go beyond Microsoft Word.  High-quality images and no spelling errors are compulsory.

What to put in a Capability Statement?

Starting your first Capability Statement from scratch can be quite daunting.  To help you along the way, I have prepared a short template.  The template can be downloaded here, and make sure you let me know in the comments below if you found it useful.

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Showing 6 comments
  • Drew
    Reply

    What an absolutely fantastic article and template! This had added value to my business straight away. Love this thanks.

    • Bronwyn
      Reply

      Thank you Drew, and I’m so glad that you found the template valuable. Let me know how you go with your Capability Statement – happy to give it a critique if you wish.

  • Rosemary
    Reply

    Great guidance, bringing those who might not have been in the competition (for tenders) right to the centre so they can compete. Very useful. Thank you.
    Rosemary

  • Bronwyn Reid
    Reply

    I’m so glad you found it useful Rosemary. Small Business owners too often find the whole issue of tenders and getting on the radar of big businesses very daunting. My mission is to try and break the steps down into manageable bites.

  • Elizabeth Gillam
    Reply

    Love it! Thanks for the explanation Bronwyn

  • Bronwyn
    Reply

    Thank you Elizabeth. Like the business owner in the post, many small business owners don’t know anything about Capability Statements.

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