A capability statement is a brief document used in a business-to-business transaction that precisely discusses the profile or describes the background and capabilities of a business organization. To be specific, it is a communication tool prepared by a particular business organization to offer products or services to a prospective client. Note that most government agencies require interested contractors to submit their capability statement along with other relevant procurement documents.
This article explains how to write a capability statement by discussing its general format, including its four basic sections, and by providing tips on avoiding common writing pitfalls.
The parts of a capability statement
Remember that the purpose of a capability statement is to describe, as concisely as possible, what the business is all about and what it can do for a prospective client. Nonetheless, to prepare and write this document, it is important to take note of its five major components, sections, or parts. These are the (1) company background, (2) core competencies, (3) differentiation, (4) track record or past performance, (5) organizational data. Take note of the following for further details:
1. Company Background: Describes what the business is all about, specifically by mentioning the industry or sector in which it operates, the market it serves, its primary products or services, as well as its mission, vision, and core values. Keep the description as brief and as precise as possible. The ideal word count is between 150 to 250 words.
2. Core Competencies: A list of short statements describing the core competencies or expertise of the business. Take note that these core competencies can also include specific skills and knowledge the business can perform, as well as the specific products, services, and/or solutions it can provide.
Remember to tailor fit this section based on the needs or requirements of the prospective client. There is no need to list down or describe all the core competencies of the business. In other words, list down only those competencies that are related to what the client is looking for.
3. Differentiation: Discusses the unique selling point of the business to differentiate it from competitors. To be specific, this section of the capability statement includes a description of the competitive advantages and value proposition of the business. The following questions can be helpful in determining and thus, describing differentiation:
• How is the business best suited to the needs or requirements of the client? What benefits the client can gain from procuring or contracting the products or services of the business?
• What makes the products or services stand out from the rest? How are these products different from those offered by the competitors?
• How do the employees give the business an advantage over its competitors? What are the capabilities of this workforce?
4. Past Performance:A list and brief descriptions of previous work and accomplishments, specifically of previous clients and projects. Whenever possible, this section can also include the contact information of the previous clients for references. However, remember that some clients do not like divulging information about their procurement and contracting activities.
There is no need to list down and describe the entire track record of the business. List down and describes those clients and projects that will effectively capture the demonstrated capabilities of the business in relation to the needs or requirements of the prospective client.
5. Company Data: This section of the capability statement includes all other pertinent data or information about the business. Such include contact information, certifications and licenses, size of the organization, numbers of employees, list of equipment or technologies, annual revenues, and the geographic scope of the area the business serves.
Pointers in writing a capability statement
Below are additional tips for writing a capability statement:
1. Targeted: Remember to tailor fit the entire document according to the needs or requirements of the prospective client, particularly by including only those data or information that are relatable to the client.
2. Concise: Keep the document precise. Avoid complex sentences and large blocks of paragraphs. Use simple sentences and maintain an active voice as much as possible. Feel free to use bullet points for simplicity. Contain all data and information within one to two pages.
3. Organization: Use proper labels or headings for each section of the capability statement. The standard section labels are: Core Competencies, Differentiation, Past Performance, and Other Data and Information.
4. Presentation: A capability statement should include the logo of the organization as well as other branding elements for recognition. Make the document visually appealing while refraining from using unnecessary and distracting design considerations. Proofread the document for errors in spelling and grammar.