A proposal is a document in which a supplier explains to its (future) customer what services or products it provides on what terms. A proposal is always specific to the customer and lists only the customer’s requested services or products. This distinguishes a proposal from a brochure, a general description of options, and sometimes prices.
Another word for proposal its quotation or offer. Indeed, as a supplier, you present to the customer what you can do for him, how you do it, and what you demand in return. The Dutch term for a proposal is offerte.
The purpose of a proposal
The purpose of a quotation is to convince the customer to purchase your services or products. So you want to enter into a contract. The customer has another goal. He would like more information. The customer is interested in what a company provides but would like to know more about:
- Does the supplier understand my problem
- The details of the products or services
- The price
- The conditions (for delivery)
Only when he is convinced that the services or products in your offer suit him and the terms (such as price and delivery method) are acceptable will he proceed to make a purchase.
What’s in a proposal?
A proposal shall include at least the following items:
- Specific products or services you want to provide to the customer with any choices he has
- The price at which you want to supply the products or services
- The terms of delivery, such as when you deliver and how you do it
This is the basic information a client needs. If you want to convince the customer, it takes more than just your side of the delivery. Winning proposals also include a description of the customer’s problem so that they recognize and see the relationship between their problem or desire and the solution you offer.
An Proposal versus a Contract
A proposal legally becomes a contract, an agreement as it is called in law, when the customer accepts the proposal. So legally, there is no difference between an offer and a contract.
In practice, the distinction does exist. You can recognize the difference very clearly by reading the text. A contract is a dry list of products, services, and conditions. A quotation is a recruiting document that informs and excites the customer to purchase the product.
A customer accepts the quotation by signing it or otherwise agreeing to it. A written agreement, whether digital via e-mail or a signature, is the most common. However, a verbal agreement also occurs. You record the method of customer acceptance in your proposal. If you don’t, Dutch law says that acceptance is form-free, but it must be a directed will.
It is common to require a written or digital acceptance record as a condition of acceptance. If you want to know more about the legal side of proposals, hire a lawyer specializing in commercial law. They can help you set up the correct terms.
A proposal is a document you prepare to persuade the customer to choose your solution. You prepare a proposal, the supplier. However, the customer usually asks for a proposal. Most proposal writers make the mistake of including only a product or service description, price list, and terms and conditions in the proposal. In doing so, you are not getting the most out of the proposal.
A conscious customer usually requests several proposals from different suppliers. So your quote will be compared to others. Because of this, it is essential that you also entice the customer. Persuasion works best when the customer reads that you understand what their problem is and your solution is the best choice to solve their problem.
The proposal can legally suffice in the delivery process.
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