A good project proposal is necessary to the success of your project. It defines the scope. It provides the budget. Lastly, it sets the timeline. In other words, your project proposal sets the tone and expectations for your project.
A project proposal should minimally include the following:
- goals of the project
- reasons the project is being undertaken and what the client should expect to achieve from it (think ROI)
- payment terms
- signature area
- any necessary legal language
- an expiration date for the proposal itself
Goals, Expectations and Value/ROI
These areas can sometimes be covered in one sentence. They might be extensive enough that your project proposal should include them in a bulleted list. Or, you can write them in prose, like a story. The importance is that you are setting the tone for why you are doing the project. If your contact at the company shows the project proposal to someone else, that other person should be able to grasp what should be expected – in general – from this area.
Scope and Options
It is important to provide the choices from the client’s perspective. Including tech specs for a massive undertaking is not productive. The client won’t read it, and even if he does, he won’t understand it. So, getting a signature on scope you have defined this way is not helpful. In other words, explain what kind of sausage the client can expect, rather than how you are going to make it for him. As an example, let the client know he’ll get an invoice, with a place for a purchase order, a payment method, shipping instructions, and a place to calculate state sales tax. How you build it doesn’t matter, but maybe the fact that you would provide a workflow or mockups does.
Personally, I like to include three options for my potential client to consider. One option covers the minimum viable product – what is the bare minimum that could be done to get the client where they want to be. The second option does what the client said he wanted. The third option allows the client to dream a little and for you to show what you can provide above and beyond what the client has requested. Additionally, by having three options into your project proposal, you can put pricing in context, as well as scope.
If the project is straightforward, say, like a bank of hours – you can just put it out there. But, you can even provide three options for something like that. For example, a 40-hour bank of hours might be 25% less per hour than a 10-hour bank. A 5-hour bank might be 25% more per hour.
Including pricing is the bare minimum of a project proposal – and it one of the only things in the proposal that mentions what you, the service provider, are going to get for the undertaking. If you are including multiple options, make sure the price for each individual options is clear.
I prefer fixed pricing whenever it is possible to nail it down. Fixed pricing gives you, as the provider, motivation to stay in scope and to finish the project in a timely fashion. When it is not, providing an estimated number of hours and an hourly rate will work. The client is going to hear your estimate as a firm price, so be sure you have done a little due diligence to understand the level of the challenges.
Make sure that you are willing to execute on the project at the lowest price you provide. And, make sure you can make a profit at that price. Otherwise, you are setting yourself up for frustration before you begin.
Telling the client when he can expect his project to be complete is a very important part of a project proposal. And, by putting dates in your proposal, it requires you to do the work of when you could fit the client into your schedule. Remember that the estimated hours does not equal the duration of the project – and that is something you can start educating your client on at the proposal stage.
There are several methods you can use to arrive at the timing. The first option is a final date. The second option is a “go live” date – this is especially good if you are including support as part of your project proposal or if there is ongoing maintenance to follow.
A third choice is to provide a duration (e.g., it can be completed in 6-8 weeks). If you choose this method, you have to set expectations of when you can start. For example, you could say that you will create the timeline once the project proposal is signed or after payment is received.
Lastly, if you are doing a phased or Agile method, you can provide verbiage like, “Every two weeks, we will roll out a small, fully functioning phase. There will be a flow of rollout, testing and then modifications, taken in small chunks to expedite getting portions of the solution in your hands. A detailed schedule will be built upon acceptance, but we believe the entire project will be completed by the end of the summer.”
Whichever method you use, the important part is to set the expectation in the client’s mind of when this will be complete and to set some urgency to complete the project. The client receives no value from an unfinished project and the longer projects drag out, the more costly they are for the provider as well.
Terms and Legalease
Be sure to include how you expect the client to pay you. Are you sending a digital invoice for payment via an ACH link? If they would rather pay with a credit card, do you have a fee you charge to accommodate what the credit card company will take from you? Will you accept a bucketload of cash? Are mailed checks OK?
Be sure to include when payments are due too. Is it all upfront? Do you want a downpayment with the remainder due upon completion? If you take the remainder upon completion, how do you define “complete”? (Be careful with this method!) Are banks of hours pre-paid and the reloaded as they drop below a certain minimum? If you take payment after the fact, how quickly is the money due? Net 10? Upon receipt?
If you need to define certain terminology, this area is a good place to do that. If you have subcontractors or employees that will be working for you that you do not want your clients to “take” from you, you should add some legal verbiage about how they can’t hire your team members for a certain period of time after your work together is complete. Confidentiality can also be covered in this area if you can keep it brief. (The verbiage for the last two should probably come from a lawyer.)
Terms might also include your availability. This is important, especially for support or maintenance projects. What hours do you work? Is there an upcharge for weekends, etc.
Make sure to include all that information, along with a place for an authorized representative to sign. It should include their job title and business name, along with the date.
I’m also a big fan of making it easy for your client to sign the proposal. Please don’t make them print something and sign it and then scan it back in to send to you. Use AdobeSign, HelloSign or something similar, to provide a digital signature. The last thing you want when you’ve gotten someone convinced to work with you is a delay while they go through the physical steps – give them a button to push!
Make the Project Proposal Expire
Without an expiration date on the project proposal, you risk having your proposal float in the ethos for a while. Setting an expiration date creates a sense of urgency with the client. It also allows you to set better timing in your proposal, based on the expiration date. Another benefit is a natural place to contact the client in your sales process where you can remind the client of the expiration date as it nears to see if he has any questions. It also sets a limit for how long you will hold the pricing. Lastly, it provides a period of time that keeps the initial discussions fresh. If you get too far away from those initial discussions, things change – on both the client’s as well as your end.
If you follow this basic structure for your project proposal, you are able to start your project with a basic understanding and expectation that can drive the whole thing through to completion.
Any tricks you’ve tried with your project proposals that have worked to help your projects succeed? Please share them in the comments.