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Proposal or Contract: Which Do You Need?

Let’s set the scene… You’ve just finished a discovery call with a potential client. It ended on a high note—they want to move forward! You feel the thrill of a new opportunity and you want to seal the deal ASAP. So… what now? Your brain begins to spin. Do you send them a detailed follow-up or just an overview? Do you share your pricing upfront? And is an email good enough or should you attach a fancy PDF with your branding and… AHHH!

It’s an all-too-familiar experience for freelancers. When your work requires you to self-promote—and your wallet requires you to generate income—you often feel the need to act quickly to lock in new clients. But in reality, slowing down and following best practices can set you up for greater success.

 

Slowing down and following best practices can set you up for greater success.

So… what are those best practices? Below, we’ll explain the difference between a proposal and a contract, and share tips on crafting great ones, so you can perfect your post-pitch process, land more clients, and make your day-to-day a whole lot smoother. 

 

Proposal vs Contract: What’s the difference?

A proposal—also known as a statement of work (SOW)—is a detailed breakdown of the services you’re going to offer to a client, along with your pricing. It’s essentially an extension of your sales pitch. It may include packages and optional add-ons that the client can select from. A proposal is not a legally binding document, but rather a starting point to align on exactly what you’ll deliver.

A contract is a legally binding agreement required to officially kick off a business relationship with a client. It will generally re-iterate the statement of work, and include all the fine print that ensures you get paid (and protects you from liability), like terms and agreements around payment, confidentiality, intellectual property, and so on.

The goal of the proposal is to reach an agreement around the scope of work

How should proposals and contracts be used?

After you deliver your epic pitch, the next step is to send a proposal outlining what you’re offering. This gives the client an opportunity to review the plan, ask questions, and request changes, if need be. The ultimate goal of the proposal is to reach an agreement around the scope of work, not to lay out all of your Terms and Conditions—save that for the next step.

Once you’re on the same page and the client has accepted your proposal, it’s time to make it official. At this point, you can document all of your Ts and Cs in a formal contract, which specifies all the important stuff that you don’t want to bother with during the pitch, like who owns what, how you’ll operate as a contractor, etc. A contract requires signatures from both parties in order to proceed.

What makes for a great proposal?

Much like baking an Instagram-worthy sourdough, delivering a great proposal isn’t just about following the recipe—it calls for a little flair too. On top of detailing what you’re offering, you can use your proposal as another opportunity to sell your business and your services. It’s a chance to say more about who you are and what you do, share client testimonials, and give prospects a chance to really see and choose you.

Remember, your proposal might be passed around an organization, so you want to seize every chance you get to clearly explain your offerings to other folks who might not have been included on the pitch.

 

Key elements of a great proposal:

  • Statement of work, including budget, timeline, and deliverables
  • Overview of your business and the services you offer
  • Third-party validation, like customer references and quotes

A great contract is all about the details.

What makes for a great contract?

A great contract is all about the details. It’s critical to dot all your Is and cross all your Ts, because you’re entering a legally binding relationship with another party. This document keeps you safe from unjustified legal action on your client’s part, but it also requires you to deliver what you promise in writing. In other words: Take it seriously! Before you share a contract with a prospective client, consider consulting an attorney or make sure you’re using a contract that has been vetted by a lawyer, like the one you can find in Harlow if you’re a user. You won’t regret it.

 

Key elements of a great contract:

  • Clear payment terms and schedule of payments
  • Confidentiality, ownership of work, and IP ownership terms
  • Termination clause
  • Signature fields for both the Client and you, the Consultant

Pro Tip: When you’re ready to up your contract game, check out this Contracts 101 podcast episode from Brittany Ratelle, an attorney for creatives. She walks you through the legal fundamentals of contracts and explains why getting everything in writing is so important for freelancers and creatives.

Why it’s important to perfect the post-pitch process

Once you’ve nailed down the proposal and contract process, you’ll be sailing toward more successful client relationships. These two documents lay the foundation for all the work you do. They set clear boundaries and expectations from the get-go, which helps you deliver great work, make your clients happy, and get paid on time. And we love that for you, because you deserve all the amazing things freelancing life can bring.

About the Author
Samantha is co-founder of Harlow. Previously she was a marketing and demand gen freelancer. She enjoys traveling, connecting with new people, spending time with her dog Karl, and throwing back an extra dirty martini every now and then.

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