Proposals

If you are doing consulting, you will need to write proposals. We write our proposals as Google Docs and then send them as PDF. We are on and off with Mimiran which allows us to build proposal templates, then quickly produce proposals collaboratively. Its a cool service, we can only leverage it effectively when we have standardized products (future post?).

Our written proposals typically look something like this:

• Cover page
• Situation Summary (Why is there a proposal)
• Solution (How are we going to fix the problem)
  • Approach
  • Deliverables
  • Logistics
  • Client Responsibilities
• Fees
• Payment Terms
• Signatures

Quite frequently, we end up writing a proposal that is really not the legal agreement. With larger companies especially, we end up moving to an MSA (A Master Services Agreement) that covers all of the work we could do with that client and a specific SOW (Statement of Work) for a chunk of work. We’re happy to follow the process our prospect wants (or “use their paper”) since this usually means we’re getting to the final stages of a deal. Typically this also signals a shift to Word and track changes.

Some Important Details

As my friend Reuben, the owner of Mimiran, likes to say - this isn’t English class, you don’t get points for fancy words - and you’re not going to fool anyone with weasel words either. Keep the language plain and straightforward.

The Logistics section is usually where I try to make it very clear that we will be doing the work remote with a team that is not just me.

The Client Responsibilities section is important because in most cases, the project won’t be successful unless they meet these responsibilities - but they can only do that if they know it.

The Fees section usually specifies if the project is Time and Materials (T&M), which is basically pure hourly billing or Fixed Fee, where the fee is fixed for a given project / deliverable. It is important for this section to be clear and direct.

The Payment Terms section typically fits into prepaid, NET-30, etc. You should tweak these based on your business model and cash flow sensitivity. Generally, we try to do anything we can Prepaid. We like to charge half up front for fixed fee projects. We have had clients not pay. Here is a typical section from a proposal:

The project will be 50% prepaid and 50% upon completion with NET 30 terms. J will invoice Acme for $5,000 upon signed agreement which will be paid prior to starting testing. Then upon completion of the project, J will invoice Acme for the remaining $5,000.

You may also want to have a section about penalties.

Any amounts not paid within the thirty (30) days shall be charged an interest fee of 3% for each month (or portion thereof) any such payment is late.

Periphery

Get a mutual NDA document that you can use whenever you are having a conversation.

Consult with Reuben and Mimiran about pricing. Don’t undersell yourself and don’t think of value as a function of your time but rather as a function of savings or earnings to your client.

Let the proposal be a living document. We sometimes walk in with red pens. One time we walked into a prospect that was a major company in a particular segment. It was April 1. We brought a fake proposal that had their competitors name and a bunch of made up nonsense about burritos in it. At first they were non-plussed. Later, I think our sense of humor was part of what won us the work. Don’t try to make yourself into something you are not in your proposal.