8. Detail the pricing structure or budget
Once you’ve made a convincing argument in the earlier sections of the proposal to close the deal, it’s time to talk about the budget or price.
The budget section of your proposal should answer two questions:
- What resources are needed to complete the project?
- How much will the business have to pay for the project?
If it’s a big project, break down your pricing for each of the expected deliverables. These are obvious requirements that must be presented in the budget. If it’s smaller, you might just provide an overall flat fee estimate for the entire project.
However, your resources include more than direct costs. Resources also include employees and company equipment used to complete the project (computers, machinery, etc.).
If your project requires your existing company resources, the resources may no longer be available for other areas of your business. You must, therefore, factor in this opportunity cost when developing your proposal. It’s another indication of whether this project is right for you and your business at this time.
Determine your source of internal funding before the project launches. Can your business afford the project with existing funds or do you need to raise money to hire more help for future projects? If you need to raise additional funds, should you sell current assets or should you find outside investment?
Be sure to include the cost of the taxes, as well, so your client knows exactly how much to budget for the work.
Finally, it’s important to include some contingency costs. As I mentioned earlier, sometimes projects go off the rails and you need to protect yourself. You might say something as simple as:
“Any work required that goes beyond the scope of work detailed in this proposal will be billed at an hourly rate of X.”
That way, if you notice a project is going out of scope, you can alert your customer early on and let them decide how they want to proceed. They might decide to hold off on some of those new required deliverables for phase II of the project. In that case, you can scope it out separately and propose another price for investment in the future.