One thing neither academia nor Corporate America taught me how to do was create an effective proposal. When you own your own business, however, proposals, pricing, and packaging are a critical part of your work. If you don’t do them well you stand to lose business, set yourself up for poor working relationships with clients, or even price yourself right out of business.

First off one thing I’ve learned is that creating a thorough scope of work and pricing document for a potential client is a time consuming experience if you want to do it right. By doing it right I mean after someone reads your proposal they understand:

  • That you have a good grasp of their needs and desired solutions and how your services meet those needs.
  • A clear understanding of the scope of work (what is included and what is not).
  • The price they will be paying.
  • The timing of the project and joint account abilities necessary to meet those dates.
  • The terms of your agreement.

If you’ve ever freelanced you know how painful scope creep can be if you did not define the initial scope properly.   You either end up working for free and/or creating strained client relations because they didn’t understand what was and was not included and now you’re telling them it’ll cost more.

Because doing the proposal well is so time intensive, you need to make sure it is worth your while to undertake the process.   After all it can take anywhere from an hour to many hours to get clear on the requirements of a particular job.   This holds true for many types of service oriented businesses.   This is why it is incredibly important that you qualify your clients first.   Celine Roque at Web Worker Daily drives home this importance:

One important benefit of qualifying your clients is that you don’t waste your time.   You get the clients that you want to work with, you’re paid the rate you want, and both parties have realistic expectations.   You don’t spend hours working on a proposal that your client eventually rejects because they realize that you weren’t on the same page after all.   If that scenario sounds familiar, then it’s time to start qualifying.

I personally have found it very helpful to have two levels of qualifying potential clients.   The first is a quick pre-qualification step which looks like a short exercise the potential client needs to complete (for example: complete a quick questionnaire on their project) before they even get a chance to talk with me “live” on the phone.   It helps me make the most of our time together and allows me to determine if there is even a remote possibility of a fit.   I have also found that when people are not willing to share information on what they need (even if that information is just that they need help getting clear on their project) they may not be an ideal client.

Setting your prices overall and for each individual job is an evolutionary process. You are always reviewing your pricing structure to ensure that it is in line with the value you provide, the income you need to earn to stay in business, and market conditions.   That being said, putting yourself on sale just because there is random price slashing going on in this economy is not a sound business practice. It isn’t sustainable.   Whatever you do, do it wisely with the long-term in mind.

Pricing strategies and philosophies abound.   Some good articles on how to set your freelance rates, price your services, and handle those price shopping type clients include:

Remember that your time and expertise is valuable.   If you have a knack for dissecting what a client needs and then laying out a plan for that it is a worthwhile service even though you may take it for granted because it comes second nature to you.   Don’t forget to charge for this as you set your prices and determine your estimates.   The very viability of your business depends on effective pricing and proposals.

Paula Gregorowicz, owner of The Paula G. Company, offers life coaching for lesbians to help you gain the clarity, confidence, and courage you need to have success on your own terms. Get the free eCourse “5 Steps to Turn Fear Into Freedom” at her website

Photo Credit: stock.xchng