Preparing a Proposal, or a Request for Quote
By Neil Cavanagh
Once you’re up and running with your new microbusiness you’re likely to need to provide a proposal to a new customer if you’re hoping to provide a significant amount of goods or services to them.
It’s always worth considering how the request came about and what type of customer you are dealing with. If you’ve done business with the customer before, there will be no need to give lengthy introductions about your company.
Understanding you customer’s business needs are the foundations of any proposal, so if you don’t have a clear picture of what they want, you need to clarify their requirements before going any further.
There will usually be two routes that will end up with you having a write a proposal:
1) You are responding to a “request for quote”.
2) That the customer has directly expressed an interesting in you providing goods or services to them.
Request for quote
A request for quote is usually the more straight forward of the two as the customer will usually detail their specific requirements in the request for quote document. It’s very important that you read this document fully and understand exactly what the customer is asking for. Some RFQ’s are very generic whilst others may detail a complete specification of exactly what the customer requires. If you are unsure about anything, make a list of questions before you contact the customer to clarify; this is important as it’s advisable to try and clear up any points in a co-ordinated way. If possible, it is usually best to telephone the customer with your list of questions so you can get a quick response. Telephone can sometimes be better than email for clarification as the customer may be prepared to expand a bit on their requirements and really give you a good feel about what they require.
Expression of interest
If you’ve been fortunate enough to meet with a customer, you probably have a good understanding of what their requirements and you may have had chance to make some notes if you’ve met face to face. Don’t be afraid to call back and ask if you’re unsure of anything, most customers are usually really helpful in giving you information to help you put your proposal together. Ask for any supporting information if you need it, such as paperwork, documents, screenshots or pictures.
Writing your response
It’s important that you show in your response that you’ve understood your customers’ requirements and that you can demonstrate that you can deliver what you’ve promised.
If you’re completing a Request for Quote, the customer may want you to answer some very specific questions on how you can meet and deliver their requirements. Always try to provide a response directly to their questions. Try to keep the response as short and to the point as you can, if you need to reference additional material, do so in an indexed appendix. Only refer to an appendix it if you need to, and never just answer a specific question with a response that just refers a customer to your appendix. If a customer is asking a question, they’ll usually want a direct answer.
Level of detail
It’s important to get the right level of detail in a proposal so your customer can digest the information without being swamped in too much detail. Where possible, it might be worth breaking your proposal down to present a new customer with a choice of options, usually with varying degrees of cost.
Whilst responding to your customer’s requirements you should consider the scope of the work, milestones, timescales and cost. Always try to refer back to how you think you can deliver these requirements.
Always try to give realistic prices by drawing on past experiences of doing similar work. Remember that your customer may be getting other proposals so you do not want to inflate your prices unnecessarily as your proposal could get immediately discounted if the price if far higher than any other quotes the customer has received.
If you are presenting competing options with varying costs, it’s probably not worth totalling your proposal if the customer only needs to pick one option out of three as it could make your proposal look unnecessarily expensive on first glance.
Timescales and Milestones
Estimating timescales can be difficult and it may only be worth doing so if your customer has requested this level of detail. Usually you can only provide estimations at best and it’s worth considering that timescales are often dependant on your customer too, particularly for providing you with an official order or for undertaking acceptance testing.
Scope of work
The scope of work is essential to any proposal and it’s important that you list the goods or services you will provide for the amount quoted. Frequently the responses to a RFQ can be referenced in any future legal dispute so it’s essential that you detail the work that you’ll undertake for the customer. Also, consider any elements that you would explicitly list as being excluded from your proposal. A good example of this would be if you’re quoting for the fitting of a new computer system, but your costs exclude the removal of the old one (as the customer has not specified that this is a requirement).
Sending your proposal off
Once you have completed your proposal, ensure you return it back to the correct contact by any deadline that is listed. You may wish to telephone your customer to ensure that they have received it, but don’t ask too many questions until they’ve had chance to review and digest your submission.
Be ready to answer any questions that your customer may have about your proposal and think carefully about your responses. Good luck!
Having recently launched CamisOnline, an online Business Administration and Management tool, Neil is actively contributing advice to help businesses thrive on the web.