Getting Paid … for Your Proposal?!

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How do you cover the costs of the pitches and proposals you do? It’s the age-old question of every freelancer, and everyone’s approach is different. The disclaimers: I’m not an accountant, and I don’t often have to recoup the costs for a pitch that involves lengthy research and hours of preparation time. Also, I’ll keep this discussion broad, because discussing the specifics of pricing can raise all kinds of legal issues. Probably the most obvious way to recoup the proposal preparation costs are simply to include them in your estimate, and charge your normal rates for the time involved. If the client takes you on, they pay for the time it took to prepare the proposal. If they don’t, they pay nothing. Simple. You may not feel like you’re in a position to charge for your proposal costs, though — many freelancers don’t. But putting proposals together takes time, so rather than just writing that time off, you might consider an alternative approach: work the time you’ve spent on the proposal in your project costing estimate some other way.

Spreading your costs

Let’s say you know that the labor cost you have to cover for every hour worked is $10. (I’m using small, simple figures here so we (okay: I) don’t get confused.) Now, let’s say you spend five hours researching and preparing a pitch for Web Project A. And you estimate that completing Web Project A will take 20 hours. Ordinarily you might estimate a labor cost for that time of 10×20, or $200 — then you’d add your profit margin. That’s okay, but it’s not going to cover the cost of pitching for Web Project A. Instead, add the pitching time (5) to the job estimate (20). Now we’re looking at 25 hours of work. Multiply that by your hourly labor cost (10) and you can see that you need to recoup $250 to cover the full labor costs of this project. Now, divide that figure by the number of hours you’re estimating the project will take (that’s 20). We can see that to cover the real cost of Web Project A, you need to charge $12.50 per hour, not $10.

But I have fixed rates!

If you have a schedule of fixed rates, and you don’t want to deviate from that right now, then you might take a different approach. You might consider building the time you spent preparing the pitch into your scoping or project management costs, for example. The main problem with this approach is that it can add a significant chunk of money to an otherwise ordinary estimate of time in a given area (for example, scoping). And if you add it to the project management estimate, and then need to itemize that cost in your invoice, you might face an ethical issue re: “fudging” your figures. If I were taking this approach, I’d probably add the time to the scoping estimate — because, after all, preparing the proposal entails scoping — and charge for it openly on the first invoice.

On the average

I know what you’re thinking: what about all those jobs I pitch for, but don’t win? How can I recoup those costs? Well, you could apply the per-proposal formula I just outlined to your annual proposal-and-work load. Ideally, you’ll set your rates on the basis of how much it costs you to freelance — including the pencils, the paper clips … and those proposals you pitch for but don’t win. That means that you’ll need to total how much time (read: money) you spend on creating proposals each year, for example, and how many of those proposals you win. If it takes you an average of five hours to create a proposal, and you win one in three proposals, then in fact you spend 15 hours, on average, to land a job (not counting meetings — I’m still trying to keep this simple). Now let’s say that your average job takes 40 hours. If you wanted to, you could use these figures in the formula I explained above, and come up with a figure that represents the hourly rate that, on average, you need to charge to cover the labor costs of the projects your business completes (in this case, you’d charge $13.75 per hour instead of the current $10 per hour in the example above). These are the basic ways I’d go about covering the costs of putting together a proposal for a client. If you use another approach, do tell us. Image by stock.xchng user lasop.

Frequently Asked Questions (FAQs) about Getting Paid for Your Proposal

How do I determine the right price for writing a proposal?

Determining the right price for writing a proposal depends on several factors. These include the complexity of the proposal, the time it will take to complete, your level of expertise, and the industry standard rates. It’s important to do some research to understand what other professionals in your field are charging. You can also consider the value that your proposal will bring to the client. Remember, your price should reflect the quality of your work and the value you provide.

Should I charge for writing a proposal?

Yes, you should charge for writing a proposal. Writing a proposal is a professional service that requires time, effort, and expertise. It’s a crucial part of the project process and should be compensated accordingly. However, how much you charge can vary depending on the factors mentioned above.

How can I justify my proposal writing fees to clients?

Justifying your proposal writing fees to clients involves clearly communicating the value you provide. Explain the process you go through when writing a proposal, the time it takes, and the expertise required. Highlight the benefits the client will receive from your proposal, such as a clear project plan, detailed budget, and potential for increased funding or sales.

What is the industry standard for proposal writing fees?

The industry standard for proposal writing fees can vary widely depending on the field and the complexity of the proposal. Some professionals charge a flat fee, while others charge by the hour or page. It’s important to research what is common in your industry and set your rates accordingly.

Can I negotiate my proposal writing fees?

Yes, you can negotiate your proposal writing fees. However, it’s important to know your worth and not undersell your services. If a client is not willing to pay your rates, it may be better to decline the project rather than compromise on your value.

How can I improve my proposal writing skills?

Improving your proposal writing skills involves practice, feedback, and continuous learning. You can take courses, read books, or attend workshops on proposal writing. It’s also helpful to review successful proposals to understand what works.

What should I include in my proposal?

A good proposal should include a clear objective, detailed project plan, timeline, budget, and a compelling case for why the client should choose you. It should be well-structured, concise, and persuasive.

How can I make my proposal stand out?

Making your proposal stand out involves understanding the client’s needs and presenting a solution that meets those needs. Use clear, persuasive language and provide evidence of your expertise and past success. A well-designed, professional-looking proposal can also make a strong impression.

How long should it take to write a proposal?

The time it takes to write a proposal can vary widely depending on its complexity and the amount of research required. It could take anywhere from a few hours to several days or even weeks. It’s important to allow enough time to create a high-quality proposal.

What are some common mistakes to avoid when writing a proposal?

Common mistakes to avoid when writing a proposal include not understanding the client’s needs, being too vague, not providing enough detail, and not making a compelling case for your services. It’s also important to avoid spelling and grammar errors, as they can make your proposal look unprofessional.

Georgina LaidlawGeorgina Laidlaw
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Georgina has more than fifteen years' experience writing and editing for web, print and voice. With a background in marketing and a passion for words, the time Georgina spent with companies like Sausage Software and cemented her lasting interest in the media, persuasion, and communications culture.

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