All business owners should be familiar with a business proposal or sales proposal, when it is appropriate, and important information that it must include. Government agencies and companies of all sizes will either need to write or solicit business proposals for projects. When companies outsource upgrades to their facilities or technology, or hire consultants for specific duties like financial, business or marketing, most companies will require a bid proposal.The formality and length of the proposal should be based upon guidelines for the proposal (if there are any given), the scope of the project, and including necessary details to execute the project. Informal proposals can be written on company letterhead, as short as two pages.
The proposal serves a dual purpose. It details the actions / responsibilities of the contractor for the assigned project ( for the benefit of the contracting company), and if signed, it is considered a legally binding contract, (now benefiting the contractor). Regardless of the size the project or the additional information that may be necessary for each proposal, every proposal should have the following components:
- Your Name, Business Name, and Address
- Company Business Names, and Address
- Introductory comment about your relationship with the company, your knowledge of the project, and a concise statement about the project.
- Objective of the proposal and the project. What will your company accomplish? What, specifically, have they contracted you to do?
- Scope of Services details exactly what your company will be doing to accomplish the objective. It is good to be as detailed and clear as possible so there are no blurred lines of responsibility or questions that cannot be readily answered by looking at this document. It is good to identify projects that may be considered in the future, but are not part of the project.
- Qualifications can be placed here or after the schedule and fees. This is where you will reinforce your ability, experience, and benefit gained by working with your company.
- Schedule and Fees will outline how much the project will cost and the schedule for deliverables and payment. If 50% of the payment is required to start the project, state that here.
- Assumptions may not be a necessary component for every proposal, however, in most services based businesses, it is good to be clear about any business arrangements that have already been arranged before the agreement, or any other assumptions you have going into the project. For example: will there be weekly conference calls?
- Authorizations are any permissions that the company may have to grant you to execute the project. If you are a web designer, you will need permission to use company logo's, byline, etc.
- You can list any additional services that your company provides that would enhance or create more value for the customer, but you do not have to.
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Optional components may include an explanation of software costs or professional fees. Be sure to incorporate any industry specific licenses, certifications, or other necessary documents or affiliations. As pointed out above, when signed, this will serve as a legally binding contract. This fact should compel you to include as much information, concisely as possible.
What is your experience with proposals?
