A well-thought-out and well-written proposal is critical to your company’s ability to get work and successfully complete the work at a profit. So here are the first steps you need to take to learn how to write a proposal letter.
You have to make sure your proposals have a professional look. That means your company name and the name and contact information for your salesperson can be easily identified and found.
The questions you need to ask BEFORE you can answer, “How to write a proposal letter.”
Do you know what it actually costs you to complete a project? If over the past few months or more, your actual costs to complete varies greatly, positively or negatively, from your projected costs, you may not be identifying all of your project costs. To help identify all your project cost you need to start by first: Looking back at a representative number of completed projects to determine your actual costs. Did you include an adequate allocation for office overhead? Perhaps you under-estimated or over-estimated your labor costs or the estimate did not account for all of the materials needed to complete the work. What are your insurance costs, such as CGL, worker’s comp, and vehicles? How much supervision will the project require? What is the level of technical detail? Where is the project located? Be sure you are properly calculating your rental costs, even if you are “renting to yourself.” Know your fuel/maintenance costs. Answering all these questions will help you know how to write a proposal letter specific to each project.
What you need to include when writing a proposal letter
Don’t forget! It’s very important to carefully review the project plans and specifications and recite them in your bid. Simply saying “all labor and materials to complete XYZ project” is not adequate. Anyone reviewing your proposal should be able to identify, with specificity, what your bid includes and whether it is a complete proposal. Is there are choice of materials? If so, what brand are you proposing? Do you plan on protecting surrounding work or excluding that from your bid? Are you replacing the decking? Are you completing the work in 3 days or 3 weeks? Can you start tomorrow or is there a lead time for your crew or the materials? Specifically identifying all labor and material warranties and who is providing the material warranty can help you write a proposal letter that’s inclusive of everything you and your clients need.
It is as important to specify your exclusions as well as your inclusions. Are taxes included or excluded? What about permits and fees, trash hauling, or storing materials? Is the owner responsible for protecting surrounding work? Note any materials whose colors may be subject to variation. Note any limitations on warranties.
What else should be included?
Always include a deadline to accept your bid. Crew and material availability, as well as fluctuations in material costs, are not constants and must be managed. Don’t forget to include payment terms in all proposals, including whether you offer a discount for early payment. It’s also important to make sure your proposal notifies your potential customer that interest, at the highest rate allowed by law, will be charged on all accounts which remain unpaid for more than 30 days following presentment. Also include a signature block, because you want to make it’s easy for your customer to accept your proposal and get you started with the work. Now you have a better idea on how to write a proposal letter. If you have questions or would like help writing your proposal letter, reach out to us! We’re very experienced in contract writing and construction law.
Ensley Benitez Law, PC
© Karen Ensley and Scott Colley, Ensley, Benitez Law, PC., 2021. All rights reserved. This article is provided for educational reasons exclusively and is not meant to be construed as legal advice. Ensley Benitez Law, PC, will represent you only after being retained and that agreement is made in writing.