Many people find writing proposals daunting and tedious, but in any project based profession, you will be called on from time to time to help with estimates. Understanding the goal of this exercise helps us communicate with clients and close deals, which leads to getting paid. It’s also the time to establish ground rules for a project - a little creativity can go a long way to ensuring your sanity down the road.
For handling ground rules, most project proposals include some boilerplate language, terms and conditions, for instance. These include items like the following:
You also need industry specific restrictions. For a web design project, this might restrict which web browsers you support. Much of this work is either boilerplate, or provided by a trained or experienced sales or project management staff member.
If you’re reading this article, you may have been tasked with contributing to a proposal for the first time - typically the most daunting part of this for a providing a bid. As an experienced do-er of work, your insight is valued, but under-estimation is costly. When you are constantly under pressure to do more, faster, it's tempting to underestimate how much your work takes. Similarly, if you build a project in phases, it may be tempting to just count the first phase (in software, this would be the time it takes to be "development complete", without sufficient time for revisions).
To provide a bid, you need you need to generate a convincing estimation of the project costs. This is an estimate of how much it will take to cover your costs and margins - how compellingly this is presented determines not whether a client accepts your bid, but also whether your business succeeds or fails. At the same time, you are proposing a list of work items. Ideally this is a short, bulleted list, containing a half dozen items. For large projects where more details are required, these will reference an as-yet unwritten document containing functional requirements or a technical specification. When proposing items for this list, you'll want to propose tasks which you are confident can be completed given your work constraints.
To protect yourself against underbilling, you should itemize costs with enough detail to feel confident in the bid. This also serves to provide your client with confidence in what you are doing - if they like you, but are price sensitive, a list of features allows them to scale back or phase a project without killing the deal entirely. There are companies who intentionally underbill the original project to get in the door, then use change orders to increase the costs later (we do not recommend this, but it can be valuable to understand the psychology of the process)
Depending on what you are selling, you may need to do some level of due diligence before proceeding with a bid, for instance, taking measurements or checking for environmental issues. Doing this communicates professionalism: clients hire you because you are the expert, and it shows that you are doing your homework. However, the cost of failed bids must be built into the successful projects, and when you are in a competitive industry, these costs can seem high to clients.
Finally, when providing an estimate, it may be valuable to provide different means of arriving at the same number (even if the number is essentially arbitrary). This resembles the technique home appraisers use, where they are able to massage different estimation techniques to arrive at the same number, which gives an estimate some validity. For instance with houses these are valuations based on comparable purchases, rentals, or the cost to rebuild from scratch.