There are several items that good business practice dictate that should be part of your proposals and quotes. What are these documents? What is in them and how are they used? In this movie, author Seth Polanksy describes what proposals and quotes are, what pieces make them up and how they are best used.
- There are several items that good business practice dictate should be part of your quotes and proposals. We'll start with the simplest, quotes. These are often prepared and sent as one-page documents, generally directly from a relevant application or spreadsheet, and they generally look like this. The problems begin when situations like the following occur. One, your quote's ignored for five months. Then the recipient sends it back and expects the price you quoted. Two, your client pencils in some changes, signs it, and sends it back.
You start the work without noticing any of those changes. Three, your client just decides not to pay for six or seven months. Many of these issues can be addressed with the inclusion of something like the following in the quoted cell. In fact, this half-page of text was the result of a week-long back and forth with the VP of Sales at a tech startup and is the absolute minimum I'd ever recommend including with any quote. Proposals, insofar as proposals are concerned, they're generally much more detailed.
Proposals, being more formal, are in my experience just as likely to gloss over important contractual terms as quotes. You'll often experience pushback from sales folks who will argue that the inclusion of contractual terms and conditions will scare the clients. Don't buy into that. Sophisticated and ethical businesspeople generally appreciate dealing with other parties who understand that these terms and conditions are for both parties' protection. And now we come to statements of work, or SOWs. These are descriptions of the work you're required to do, proposed timeframes, reporting requirements, and deliverable dates.
In my experience, you'll encounter a requirement to draft a SOW in two ways. First, you may be required to include it as part of your proposal for work. These types of SOWs are a godsend. This is your chance to explain how you'll do the work, what your timelines are for completion, what your deliverables are, when they'll be delivered, and many, many other items all to your benefit. Use this opportunity to your advantage and set realistic goals. So, why are these types of SOWs great? Here's why.
You, not the other party to the contract, get to set the parameters for the following: the nature, duration, and sequence of the work, the description of the deliverables, the manner in which you're going to make delivery, the acceptance criteria, the rejection criteria, how many rounds of rejection there could possibly be, and most importantly, the situations under which the client will be charged additional fees. Now on the other hand, you may be told that the attached documentation is your statement of work and you must sign up to it and everything it entails.
Or in that same vein but slightly better is a statement of work that will be negotiated jointly between the parties upon acceptance. Be careful when sending these types of documents to clients. They can and often do create contracts, and the contracts they create can be vague at best and impossible to perform at worst.
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- Why do you need a contract?
- Types of contracts
- Asking for an NDA
- Work-for-hire and contractor agreements
- Proposals, quotes, and statements of work
- Licensing agreements
- Delivery and payment terms