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Proposal Vs Quote; is there a difference between the two?
People often use Proposal and Quote Interchangeably. Well, sometimes they are right. However, while proposals and quotes do have many similarities, they should be used in distinctly different situations. But how do you know when to use them?
Proposal Vs Quote is a lot like orange and tangerine- they can be used for the same purposes, but they still have differences. Regardless of what you think their differences are, it all depends on where you are and who you’re talking to.
Let’s put aside the confusion and look at the most widely accepted definitions of Proposal Vs Quote.
Quote
According to Investopedia, a quote is the last price at which an asset traded; it is the most recent price that a buyer and seller agreed upon and at which some amount of the asset was transacted.
Quotes often have a timeframe- usually about a month–which means you have only that amount of time to purchase the materials at a given price. Outside the given timeframe, the price may change.
Proposal
A proposal is a detailed document submitted as part of a competitive process to win business. It includes quotes, estimates of labor costs, taxes, and other overheads.
A proposal puts the buyer’s requirements in a context that favors the seller’s products and services and educates the buyer about the capabilities of the seller in satisfying their needs.
Proposal Vs Quote: Are there Similarities Between the Two?
Quotes and proposals are both formal offers to a client.
A quote is a reply to a request for product, price and availability. The requester in most cases knows what they want and are looking for specific information on targeted items.
A proposal is a reply to a request for a solution or requirement. The requester is usually unsure of what they want or are open and looking at options to address their requirements.
Proposal Vs Quote: Learn the Differences Between the Two
When to use a Proposal
Proposals are required for projects where you have multiple options or solutions for the client.
Oftentimes, proposals contain multiple components where one part can be an estimate and another part a quote.
Use a proposal when:
- A client request that you send a pitch after your meeting with them.
- You’re shortlisted with other contractors to “compete” for a business or a project.
- A client wants an estimate, but you decide to go the extra mile and provide more detail and showcase the value your business can provide.
Using a proposal appropriately can increase your chances of winning a client’s business at the start of a new relationship.
Keep in mind that, when you submit a proposal, you’ll often do so in competition with several other companies. As a result, it’s essential that you take the time to create an excellent proposal and showcase value.
When to use a Quote
Quotes may not be as comprehensive as proposals, but they each have their respective uses and if used properly.
To understand when to use quotes, you need to understand how important it is to convince your client of the current task at hand, and how effective you can possibly be should you choose to do so.
Putting in too little or too much effort can either ruin your chances or cost you valuable time.
Once the customer accepts the quote, you have to complete the work as detailed in the quote and at that price. For this reason, ensure you compile a quote with a thorough understanding of what the client wants. In this way, you’ll be able to execute the services, exclusions, timelines, and project scope.
How to create a compelling quote
It’s not enough to know when to use a Quote, you should also learn how to prepare it for business and turn your prospects into customers.
Before are powerful tips on how to improve your quote writing.
#1. Structure your Quote
Structuring your quote using the proper formatting makes your document easier to read. There is a standard layout for quotes which looks a little like this:
- Quotation header — State your company’s name, contacts, tax registration number, quotation number and date, payment terms, and the name of the recipient. Write the word “Quote” or “Quotation” at the top of the page.
- Quotation body — Describe the proposed goods or services and provide pricing information.
- Quotation footer — Include the total amount of all items, tax amount, and validity of the quote. Offer a call-to-action such as their signature.
#2. Visualize the project
To describe your product in a way your client will understand, you may have to use consider including a few pictures or videos. This is especially true if your product is new and has some unique features uncommon for the market.
If your company provides clients with specific services, you can also visualize them by including videos, photos, and graphs that best reflect both process and result. This can make your product stand out from the competition as not many companies do this.
#3. Build a template with a strong brand identity
In creating a Quote, make your template unique and demonstrate your brand identity.
So how do you make these documents look styled in a short amount of time? It makes take hours or even days to design templates. In other to save time, use Quoting softwares. They allow you to choose readymade templates and fully customize it according to your needs and the needs of your customer.
#4. Use Quote-to-Cash software
Quote-to-cash software comes with a lot of features; Clients can sign, accept the quote, and also pay immediately upon signing. It is a fast and convenient way to land a new contract and customer.
Of course, it’s impossible to pay for a hand-written document received via mail, so quoting software will help you achieve quote-to-cash functionality.
How to Write a Winning Business Proposal
Before you create a proposal, you must understand and learn the basics of it. Let your proposal communicate the wants and needs of your prospective client and how your product or service meets those needs better than any of your competitors.
Here are basic tips on how to create a compelling proposal.
Structure
In creating a proposal, you begin by introducing your company and your product or service and how you help your clients achieve their goals. Try to be creative and attempt to grab the attention of the potential client.
You can share a few snippets about your business, this will help build a personal relationship and create a sense of trust in the client’s mind.
Persuasion
Remember that the main goal of a proposal is to offer a solution to a problem that a potential client is facing or will face in the future. So when creating your proposal, state all the benefits that the client might be able to extract from your product or service.
Make the proposal centered on the benefits your clients will receive rather than what you can offer. Indicate how your company will suit their unique needs.
Solution
Once you’ve highlighted the problems that your client is facing or may face in the future, it is time to suggest how your company can help overcome those challenges. Ensure to back up your solution with credible facts and figures. Include proof, testimonial of benefits you provided to other clients to add credibility to your claims.
Never include fake testimonials as it can kill your brand reputation and make you lose the respect built over the years.
When you’re are done, include a call to action to convince your client to take action.
If you submitted a proposal on Writergig freelance platform as a seller, you can learn How To Know When Your Proposal Is Accepted By A Buyer.
Conclusion
Quotes and proposals are different, despite the overlap between these documents. It’s essential that when you submit either of these documents to a client, you take the time to understand what they’re expecting to receive. With this, you’ll be able to deliver based on what the clients want and not based on what you think.
Reference
- blog.pandadoc.com– How to write a professional quote: 4 proven means to stand out
- hellobonsai.com– Proposal vs quote explained: 5 must-know facts
- freshbooks.com– What’s the Difference Between an Estimate, Quote, Bid and Proposal?
- investopedia.com– What Is a Quote?
- channelonline.com– What is the difference between a quote and a proposal?
- clientpoint.net– How to Write a Compelling and Effective Business Proposal
