What is a Project Proposal and Why is it Important?
Understanding what a project proposal is, why it’s important to your business and your clients, and how to approach a project proposal successfully can help you more effectively write and deliver a project proposal.
What is a Project Proposal?
A project proposal is a document that describes a proposed project and its purpose, outcomes, and the steps that will be taken to complete the project. Not to be confused with a project contract, which is the formal agreement between two parties to complete a project, a project proposal’s purpose is to communicate how a company, team, or individual plan to approach a project.
While the actual elements of a project proposal differ depending on the project itself, there are several key elements of a project proposal, including:
- Project Background: What problems, challenges, or opportunities exist that create a need for this project?
- Objectives: What are the intended outcomes of this project?
- Project Scope: What are the steps or stages of the project? What elements are included in this project? How will the objectives be reached through this project?
Why is a Project Proposal Important?
The purpose of a project proposal is to describe services and outcomes from a potential service provider so decision-makers can compare vendors and pick the best provider for their needs. It should be considered a sales document that persuades the decision-maker or stakeholder that the prospective provider has the skills and expertise needed to complete the project to their satisfaction. It should also set expectations, detail budget and timeline, as well as set expectations for what delivery would look like.
1. Improved Vendor Comparison
One of the most important purposes of a project proposal is to allow decision-makers to more objectively compare vendors. With a project proposal, decision-makers can compare prices, processes, and projected outcomes. If there are price differentiations, the decision-maker can also see what aspects of service may differ to create the difference in price. This detailed information helps decision-makers make more informed and objective vendor decisions.
2. Project Understanding
A project proposal outlines the purpose and scope of a project. This is helpful before a project takes place since it ensures both parties agree about what the project itself will include. It states to the decision-maker or stakeholder that the service provider understands the scope of the project. This helps establish trust between the parties to facilitate a transactional agreement.
3. Establish Credibility
A project proposal should be seen as a sales tool that helps establish credibility. It should communicate to the decision-maker or stakeholder that the service provider is capable of completing the project and fulfilling expectations. This is done by detailing how the project will be completed. The project proposal may also include potential risks or complications and how the service provider would overcome those challenges.
4. Propose an Estimated Timeline & Budget
A project proposal also proposes a timeline and budget for the project. While this document is not a formal contract, it provides stakeholders enough information about budget, timeline, and outcomes to determine whether or not to move forward with a project and, if so, to make an informed contractor or vendor decision.
5. Set Expectations
In addition, a project proposal also sets expectations for the client relationship. This includes having a mutual understanding of deliverables, timelines, and budget. While the project proposal is not a contractual agreement, it does set a preliminary agreement that the details in the project proposal will be put into the contract if the project moves forward.
6. Inform Project Planning
Finally, a project proposal also helps to inform project planning. Once the project is approved, this document will be used to finalize timelines and budget for the contract as well as to complete resource scheduling.
Do You Have Confidence in Your Project Management Platform?
The right project management platform can make writing professional, effective project proposals easier than ever. It also seamlessly bridges estimating jobs and scheduling resources. How can Mavenlink make you a more powerful project manager? Learn more about our professional suite of tools here: