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How to Create an Effective Sales Proposal

What is a Sales Proposal?

A sales proposal is a formal document used in B2B sales environments. They often come in the form of a PDF file and outline the terms and services involved in a project.

Great sales proposals are well-designed and follow a company’s branding guidelines (fonts, colors, etc.). For this reason, we recommend entrepreneurs create a proposal template that can be easily edited and used; making the sales process more time-efficient.

Why Use a Sales Proposal?

Like pricebooks, sales proposals are a way to formalize and standardize the terms of service bound to a contract. Legally, through the transaction of buying B2B services, entrepreneurs are obligated to provide the services they agreed to offer. A sales proposal is a formally written document that outlines exactly which services will be offered in exchange for money. It is also a signed document acknowledging that both parties (the service provider and the service receiver) agree to the terms of the proposal.

In short, a sales proposal is an extra piece of communication that blaintly states what services will be provided and for how much money.

Once the proposal is signed, the services agreed upon are considered the “project scope”. If throughout the project, the customer realizes other services are required, the service provider (entrepreneur) should create a new proposal with the adjusted services and project cost.

Sometimes clients will sneakily ask that more services be provided as part of the original project cost. This is called scope creep and it happens often. New work requires a new proposal. Whether the new proposal is in the form of an upgraded contact, adjustment to existing terms, or a downgrade, it’s important to have an up-to-date contract with a clearly defined scope. By emphasizing the importance of proposals entrepreneurs can avoid scope creep.

The Goal of a Sales Proposal

The ultimate goal of a sales proposal is to get a potential client or customer to sign it; accepting the terms of service, project scope, and project amount.

Once signed, you can consider this sales deal closed won and begin your onboarding and customer success process.

A signed sales proposal means you’ve accomplished the following:

  • You described your services correctly
  • The person or company understood the value of your services
  • The person or company agreed with the scope of project you suggested
  • The person or company agreed to the amount for the project
  • You’ve closed a new customer

Components of a Great Sales Proposal

Proposals come in many shapes and sizes. From the proposals we’ve seen win business, here is the format we recommend:

  1. Cover Page
  2. Executive Summary
  3. State of [Company_Name]’s Operations Related to [Your_Service]
  4. The Project Scope
  5. What’s Not Included in the Project Scope
  6. About [Your_Company_Name]
  7. About The Project Team
  8. Price Quote
  9. Conclusion & Signing Area
  10. Back Page

1. Creating Your Cover Page

People judge books by their covers — that’s just how it is. When creating your cover page, design it according to your brand’s fonts, colors, etc. Also use large font to clearly state what the document is. Here are some examples:

2. Executive Summary

The executive summary page should immitate a letter format. It’s a simple, small message that outlines the contents of an arrangement with reference to the benefits your service provides. Here is an example:

3. The Current State of Operations

Diving into the meat of the proposal, this section states the entrepreneurs’s understanding of the potential client’s organization. By writing about the state of operations, the entreprenur articulates their understanding of the potential client’s business while drawing a connection to where it makes sense to hire outside services.

In the first review of the proposal, the potential client might identify that the entrepreneur’s understanding of the organization is not accurate. This creates an opportunity to have a meeting and learn the correct nature of operations and where it makes sense to hire outside services.

Here is an example of what this page should look like:

4. The Project Scope

This section includes all the relevant products and services you intend to sell to the client. It should start with a brief description of the solution you, the entrepreneur, offers while directly listing products and services within your organization’s pricebook.

Integrating your pricebook with your proposal writing makes creating, publishing, and sending custom proposals very quick — seriously, this is a huge benefit.

Instead of writing new descriptions every time you want to create a proposal, you simply access the same line-items found in your pricebook and copy/paste them into your proposal template.

Here’s an example of what this looks like:

5. What’s Not Included in the Project Scope

This is finer detail found in great sales proposals. It’s the entrepreneurs opportunity to include provisions to what they will not tolerate or accept as part of the project. For the most part, this section includes things like advertising costs and legal fees; however, you could extend it to include other items such as travel expenses.

Here’s an example of this section at work:

6. About Your Company, The Service Provider

This section is similar to an about page. It touches on the values of your organization, your positioning statement, and company mission. It also relates to the challenges customers experience and the solutions you implement.

From the proposals we’ve seen and used, this is a good page to include any applicable software certifications or industry badges to build your trust and legitimacy. This might be a Google Adwords certification, Adobe Certification, Salesforce Administrator badge, etc.

7. About The Project Team

These pages should include a micro-bio for each manager intended to work on a project. Micro-bios should include a headshot, summary of work experience, background, education, and relevant certifications. This section is not intended to be a full resume, rather something personal to help potential customers put a face to a name. Plus, depending on each managers’ micro-bio, the information helps potential customers draw a connection to the relevancy and skillset of those working on their contract.

8. Price Quote

This page should look like an invoice tucked into inside a proposal page. It should include line descriptions for each item, price per unit, quantity, amount, applicable discounts, tax, and the final amount (the project cost). This should not be overly complex, rather it provides a glimpse of the cost a potential customer is preparing to take on upon signing the proposal.

Here’s an example of the Price Quote page:

9. Conclusion & Signing Area

This page briefly concludes the services and value proposition already outlined in the proposal. This section also references the total project cost that the potential customer is expected to pay, while including instructions for the potential customer to accept the proposal (marking the deal closed).

Here is what the conclusion page should look like:

10. The Back Page — Often a Forgotten Piece

A finalized copy of your sales proposal should include a final page depicting the back of the proposal. Imagine it like a book cover. The back of a book isn’t a simple blank page — it’s branded similar to the cover.

For sales proposals, don’t forget to include a back page. Especially if you’re planning on printing them and sending them to potential clients.

Here’s a simple design you can use:

How to Avoid Scope Creep & Maintaining Your Responsibility

As we mentioned earlier, scope creep occurs when offering services to clients. Scope creep is when you agree to offer some services, but the client tries to sneak in more (for the same price). This is where a mis-understanding occurs.

The client who is receiving the services begins to realize the benefits of having paid for the service; creating need for additional services. They are interested in fulfilling the new needs, but are not interested in paying more. In some ways, they can justify to themselves that the new services should be part of the existing ones (and they can do a good job at convincing the entrepreneur of this too).

The truth of the matter is this: contacts adjustments are either an upgrade or downgrade from the original contract. It’s not an adjustment. Either they want and need new services, or they want less services to be provided (taking them on internally). Contract upgrades and downgrades should have their own proposals to reflect the changes made (stored on a CRM as a new deal or opportunity).

By following this extremely logical way of thinking, and removing emotions from the process, you act in the best interest of your client while following your responsibilities as a business owner. Where an upgrade occurs, you respectfully increase the price of the contract. Where a downgrade occurs, you respectually decrease the price of the contract — ethically earning less from the client.

Some people view the world of business as neither black or white; that it’s a grey environment subject to different circumstances and situations. We feel differently about this view. Yes, some areas of business are grey such as HR matters, but in the world of sales, the more black and white you can be, the more scalable your business model becomes. If every transaction you sell is a custom solution with custom payment terms, there’s no way you’ll scale upwards.

Do millennials still use sales proposals?

Millennial marketers hate seeing call-to-actions like ‘request a quote’ or ‘get a free consultation’. Utlimately, they want all the information quickly available at their fingertips so they can compare and contrast to competitors.

But in practice, sales proposals are still highly relevant to today’s business environment (even if you’re selling to other millennials).

Proposals help pace the sales discussion and give you, the entrepreneur, the opportunity to leave an impression on the potential customer. This impression can go both ways: (1) Positive, to which the proposal clearly outlines the scope of your project and is received well, or (2) Negative, and that your proposal is riddled with spelling errors, watermarked images, and bad font.

A lot can be said about a proposal. Make yours count.

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