During a tender process, there may come a time when buyers and contractors request a capability statement. Read on to see what a capability statement is, the benefits, and how to create one for your business.
What is a Capability Statement? A capability statement showcases what you can offer to potential customers and provides essential details about delivering your products or services. It is a document that helps you market your business to your customer. Capability statements can also be used to open doors to new suppliers or incorporated into tender documents.
How does a Capability Statement work?
The document itself explains what your business does and, more importantly, what your business can do for your customers. A capability statement can help those who are looking to grow their business or simply market it more effectively.
Why does my business need a capability statement?
A capability statement can help your business in various ways. Here are a few benefits:
- It can be used to respond to requests to tender (many tender applications require a capability statement to ensure your business can meet the customers' requirements).
- It highlights your skills/qualifications and your business track record to prove your ability to win contracts.
- It can attract new customers as it professionally showcases your business and stands out from the competition.
How do I write a Capability Statement?
The best approach to creating your capability statement is to focus on the customer (the buyer). Before you start writing pages and pages of awesome things about your business, consider the following rule of thumb:
- Consider your (time-poor) audience; therefore, brevity is key when creating your statement.
- Understand who your customers are and their problem and how you can solve their problem (your capability to solve their problem/s).
Overall, the statement should show how you can solve your customer's problems, show why you are trustworthy, have credibility in the market place, and prove that you have experiences solving a similar situation for similar customers.
What information should you include?
Your capability statement should be customised and personalised to each customer. One size 'doesn't fit all'.
The information you include will depend on the complexity of your organisation, your target audience, and where you intend to use the statement.
A capability statement could include:
- A company profile core competencies (value proposition).
- Your company culture and values (for creditability and trust).
- Your team (to show you have the right people and resources).
- Proven track records (details of your business partners, major customers or significant pieces of work you have completed or testimonials).
- Description of your products and services (the primary services that will solve your 'customer's problems/needs).
- Company contact details .
Ensure your capability statement has a logical layout so that it's easy for your customers to read and understand.
Tips and points to consider:
- Keep it simple.
- Consider your customer and write specifically for them.
- Use language and terminology appropriate for your customer.
- Explain the features and benefits of your business that will assist the 'customers' in solving any potential problems.
- After reviewing your first draft have someone else check it.
- Use graphics to explain your brand values.
- Online tools such as Canva are an easy way to create engaging images.
- Small Business Corporation provides an excellent 'How to Develop a Capability Statement guide'. Consider downloading this free resource as a guide on how to complete a capability statement (included is a do-it-yourself template!).
- For an advanced business capability statement, check out the packages offered by our business partner Ichiban Commercial Solutions. Australian Tenders verified customers get 10% off this document, simply request a promotional code from Ichiban Commercial Solutions.
Lastly don't forget that a capability statement is only one of the elements that make up a tender response. One of the most effective activities you can undertake when trying to win a tender is chatting to your customer to build a trusted relationship.
Once you find a suitable tender, we suggest you get started on your capability statement! We offer Australian Tenders customers access to free templates and guides but dont worry, we have a variety of free resources to help you with tendering. Check them out!