More than a great idea, the skills, relationship and agreement you set with your Provider will be key to the success of your project. Understanding what a proposal should contain and how to evaluate the information is an essential knowledge all founders should have.

Context

At its very core, a provider’s proposal should demonstrate an understanding of the context and objectives of the project. This will support the basic knowledge that the provider understands—the goals, potential challenges, and the key considerations about what is to be achieved.

The proposal should also include specific details about the functional aspects of development, essentially a list of what’s included and what‘s not. Since the whole point of this agreement is to ensure that both sides are on the same page, this breakdown is essential. As a founder, you want to ensure that you see clear goals for both front-end and back-office development.

Do not look for wordiness or eloquence here. What you want to see are specific points, even bullet points, that state specifics very clearly.

Technology

Because technology is at the heart of your development, you will expect a detailed and thoughtful outline of the technical components of the project. Here, you do not want a bullet point of what will be used, but rather a more thoughtful explanation of which technology and why it is suitable for this project. You also want to understand their expertise with this technology so you should also expect to see details of other similar projects they have undertaken pointing to why this technology is a good fit.

The plan

It is also important to ensure that the provider has shared their plan, from the methodology they will use (Agile is what you want to see explained) to the testing they will offer (development and a test environment). You also want to ensure that their plan for deployment is straightforward and will be easy to achieve.

Remember that it is always a good idea to ensure you have access to the progress of development along the way, even during a sprint, and this should be reflected in the provider’s proposal.

Who will take care of the server side, who will manage the cost to host and provide the manpower required, should also be part of the plan.

Detail

The more detailed a quotation is, the more confidence you will have in what you are agreeing to. For the price portion of the quote, be sure it has been broken down into line items that are based on tasks or phases, so you can see exactly the cost breakdown. Not only does this help you understand what you are paying for, but it shows that the provider has done the work, has considered what needs to be done and so knows what is expected.

Be sure as well that the price breakdown includes a holdback portion. This is an indication that a certain amount will be paid after the product is delivered and after the testing has been completed.

The details of the proposal should also include a timeline such as, “assuming the agreement is set by… the schedule of work will be as follows… with deadlines to be set at…”

The fine details should also outline the responsibilities of the owner and the developer, and may even include a requirement for the client to provide feedback within a specific timeframe to eliminate delays that could hold up deadlines.

They are applying for a job

Remember, the provider’s proposal is essentially their job application so it should include the essentials you might expect to find in other industries. This includes either past client feedback or referrals and, something that is all too often missed, a cover letter. This is key because it is an opportunity for the provider to explain why they want to be involved in your project, why the partnership makes sense, and what experience they have to meet the specific challenges that they expect to face. The cover letter shows that the provider has truly put themselves in the project and is interested in doing the work.

The differences in providers

Beyond understanding what you would expect to find detailed in a proposal, it is also important to understand the different responses you might see.

• The cursory:  The one-page cursory proposal is evidence that a provider did not immerse themselves fully in the project. I would not even spend time reviewing this because clearly the provider spent no time in putting it together and whatever they have shared will likely not be highly insightful or even relevant.
• The all-in:  This kind of provider will imagine themselves in your project and create a version, in principle, based on what they know. This provider is actually taking a risk by putting a price on something that is not yet well-defined but that they have a vision for.
• The hold back:  This kind of provider may not want to fully engage until a project is well-defined. They may suggest an hourly agreement until the end of the project is defined, or perhaps an investment in your end of a few hours for them to analyze the project and to develop the first set of specifications. I would not recommend entering into an agreement of this type with someone you do not know, but this can be a good way, if you have confidence in the honesty and ability of a provider, to set a more realistic plan moving forward.

I have developed many resources that will make evaluating a potential provider easy and that can potentially save you thousands of dollars by helping you avoid choosing the wrong one.

Check out my course on how to best evaluate a provider proposal here.

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