Why is a price proposal more frightening than a marriage proposal?
Updated: Dec 12, 2019
A price proposal has got to be one of the most frightening documents any small business owner must provide customers and potential customers. It starts with the issue of money and just gets worse from there!
It is important to keep in mind that a price proposal is not just a document that lists your price for a given service or product, it is also a document that gives a perspective client a direct view into how you do business – what you offer, how you work, and even how you talk to a perspective client. I have been told by clients that the reason they chose me over a competitor was that they liked the way I “talked to them” in the quote.
1. Before you can provide a professional quote you need to create a professional Service Menu/Price List.
Here are the basics:
A. List your services, usually in order of their popularity (or later, by price).
B. Add your prices. You should begin with a price per service. As you develop your price list you can create special service package prices, if applicable.
C. Pricing your services is one of the most difficult business decisions you will ever have to make. While there are theories, calculations and equations you can employ, one of the best tools to begin to understand your pricing levels is taking a look at your competition.
Find out how much someone with your level of experience and in your geographical area charges for a similar service. Check out www.d.co.il - ZAP Dapei Zahav (the business yellow pages). This site provides recommended price ranges according to service providers. This is a good place to begin, as many potential customers look for information here as well.
D. Once you have an idea of the existing price range, try to get as clear a picture as possible of what the competition offers. Now try to factor in your expected expenses (you may not have all the information immediately, but you have to begin somewhere!).
Ask yourself: Will you be renting a business space or working out of your home? Will there be travel expenses? Will you need to purchase inventory? Do you need expensive equipment and/or courses to provide the highest level of service? Will you need to hire extra help to complete a job? Will your marketing and advertising expenditures be high or low?
As you begin this process, you can’t be expected to take into account or appreciate everything involved in your pricing. You should certainly plan to revisit your pricing on a yearly basis (throughout the life of your business).
To begin with, your prices may be lower than average in order to get your name 'out there'.
You should now have enough information to create a serviceable Service Menu/Price List.
2. Create a template price quote document listing all your services and prices. Even if a perspective client asks for a quote on a specific service, I always provide a full list of my services. Many times the perspective client will order more/additional services than originally discussed, simply because she/he didn’t know the full extent of my services.
3. Insert a header in the document containing your logo.
4. Insert a footer of each page containing your logo, website, page numbers and document name.
5. Start off your document with a few pleasantries, thanking them for meeting, teleconference, etc.
6. Clearly list what the customer requires/requested.
7. Include your Service Menu/Price List. If you have a per-service/product price, then include it in this table. If you charge an over-all per hour price, include it in the prices and payment terms section below.
8. Include an explanation of how you work / your deliverables package.
9. Include your prices and payment terms, including deadline for quote validity.
10. Conclude the document with a thank you for their time.
11. Insert a signature, with full contact details.
Need help creating your own price quote template, contact me today.
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