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Proposal vs quote - learning the difference

July 16, 2021

If you are fresh on the freelancing market, you know how harsh it can get sometimes. The competitors with amazing skill sets are constantly emerging and you may find yourself adapting to the new changes constantly. 

Putting an effort into creating detailed and eye-catching proposals is always a great way to make you stand out - but it can also be a very time-consuming process. Time is the most valuable resource you have so you need to use it reasonably. Sometimes just a detailed quote of your services goes a long way. 

If you are a bit overwhelmed about terms such as proposals, estimates, quotes, and bids - we can help you solve this mystery that is plaguing freelancers. Proposal vs quote - when is the right time to use one or the other?

Proposal vs quote - what is the main difference between these two?

Proposals and quotes represent formal offers to your clients. When someone is requesting a quote, you are responding to them with more details about pricing, product, service, or your availability.

The proposal is a bit more complex, it represents your response to a request for finding a solution. A client that requested for a proposal often has a few options open and considering which option suits them the best.

What about the estimates?

What about the estimates, is there a difference between an estimate and a quote? There is one important difference - a quotation is a fixed price you agreed with your client. An estimate is an approximate amount. Estimates represent a price range in general which is open to potential changes in your contract. 

Quotes are legally binding. They need to contain a detailed breakdown of the cost of your services, as well the included taxes.

Not everyone is absolutely sure about these differences. So when you receive a request from your potential client, you need to understand what they actually want from you. You don’t need to write an amazing and detailed proposal if the client asked for the estimate but called it a proposal

To be clear that you are on the same page, try getting the answers to the following questions:

  • Did your potential client ask about expected cost estimates?
  • Did your potential client ask for a list of items and services you are providing?
  • Does your client want to see a detailed breakdown of your costs?
  • Is it expected for you to deliver a lengthy proposal that will highlight your services and make you stand out among your competitors?

This will save you a ton of time because you will know exactly what to send. It will also save you from getting into a back-and-forth limbo.

Know when to use proposals 

When is a great time to send a winning proposal? You definitely need to write a proposal in these cases: 

  • You had a meeting with your potential client and they asked for your sales pitch. You want to go more detailed and showcase that you are the right expert for that project.
  • The company informs you that you are shortlisted for an attractive position and they want to see how you will stand out from other equally great competitors. 
  • You want to show more initiative and be proactive. 

Quotes are great when clients need to see numbers and precise forecasting, but proposals can add a completely new dimension to your offer.

Knowing this, when you get a request for an estimate it is completely fine to send a detailed proposal sometimes. Going the extra mile is always great if you want to land that important project.

Proposals add another dimension to your business relationships

Proposals will enclose all the information that quotes, estimates and bids provide but as a part of a much bigger picture. Business proposals will help you establish a better trust with your clients, set expectations. They contain important information such are timelines, deliverables, and most importantly - a value your client is getting in the end. That value can be a financial gain, simplifying the processes, and more.

Proposals are more precise than estimates. In most cases, clients will provide you with all the guidelines of the proposal they want to see. 

It is up to you how you will showcase your skill set in the best way possible. Is it going to be a testimonial of your previous client or your previous projects? It is up to you to decide how you will stand out.

Remember to do it right. It is very risky for your reputation to make a bad proposal. Or for example - you are not clear enough about your plans which can lead to miscommunication with your client. 

Know when to use quotes

Quotes are more commonly requested because they are easy to get and they contain two important pieces of information your clients need - how much will it cost and in which time frame it will be done? 

Once the client accepts the offer - you need to complete that task at a fixed rate. You need to create a precise quote which the client will understand. You can go more into details with your quote to explain every stage of the project to your client. 

In conclusion - who wins?

Proposal vs quote- they are both for establishing meaningful business relationships and setting the tone and expectations for your projects. If you are at the beginning of your freelancing story, you will start getting the gist of which one suits you better.

Remember that you don’t need to go the extra mile every time, that sometimes simplicity and practicality go a very long way.

It is always about finding opportunities and knowing your clients. Whatever you choose - you know you can always count on our help. We want to make things easier for you. Quotes are about values and proposals are about giving value to your client - use both wisely.

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