So far, The Webmaster BUSINESS Masters Course has covered business setup, marketing secrets, designing for success, advertising tips and good client communications. This chapter deals with proposals and contracts.
Proposals are the tools you use to get work. Contracts are the tools you use to get paid.A good proposal gives your prospective client evidence that you understand the work to be accomplished and that you can deliver in a timely manner. It will also give you a chance to outshine your competition and get the job.
Once you have the job, you need to document your business agreement with a contract.Your contract will define in detail what tasks are to be done, who is to do them, when they are to be done, what is not going to be done… and most importantly, what and when you get paid!
We’ll begin with…A Proposal
During your initial contacts with a new client, you will determine the requirements of the new Web site. After you have discussed this in some depth, you should have a good concept of what your client wants and what you intend to provide.
The proposal puts this understanding in writing. It shows that you understand the client’s needs and explains how you intend to go about meeting those needs.
Special warning… One of the mistakes that beginning designers make is to design the client’s new site during the proposal phase. It is very tempting to try to impress your prospective client with the splendor of your work.
Don’t do this! Prospective clients do not always become paying clients. Sometimes they change their minds and decide not to get a site after all. Sometimes, they find someone cheaper. And very often, they are just gathering pricing information and have no intention of getting a Web site.
But there’s more…If you provide too much information, your prospective client won’t need you. He will also have the option of sending your proposal (with your beautiful design) to another designer who can do it cheaper (because the design is already done).
Working without being paid and giving your work to your competitors are not good business-sustaining practices. You can’t pass the buck and blame someone else. Your business depends on your decisions and actions.
So be disciplined. When a client asks for a proposal, work out the details and give him a proposal, not a design.
Almost everything in the proposal will be copied into the contract, so you want to capture as much detail as possible. If you are clever, your proposal will even be structured so that most of it can be incorporated directly into the contract. This lets you reduce the time required to write the contract and allows you to give your client a contract that contains information in a familiar format.
At a minimum, your proposal should include these six items…• Statement of the Work
• Basis of your cost estimate
• Exclusions
• Site Map
• Schedule
• Fees
You can change the order and give them different names if you wish. Just be sure to include all of them somewhere in your proposal. Here’s a quick overview of the six…
1) Statement of WorkThe Statement of Work defines the tasks required to complete the Web site design from start to finish.
You may wish to divide the Statement of Work into several sections. The individual sections should include a description of the final product as well as a description of the work you are going to do. (If you are using SBI!, remember to include the value-added features that fit for that particular client.)
2) Basis of Cost Estimate
When you quote a price for a Web site, you have to be able to justify it to your prospective client. Your justification comes in the form of a list of services you are going to provide, and lists of conditions and constraints.
The “services” list should include a description of every service you intend to provide. Typical services include…• Developing a page layout to be used throughout the site.
• Designing the navigation scheme.
• Developing graphics required to support the page layout and navigation scheme.
• Submitting the Web site to Search Engines
You should also include a list of assumptions (conditions and constraints) in your proposals. This is how you build flexibility into the proposal but still maintain reasonable limits on what you are going to do.
As an example, if you agree to build a site with photos of the client’s products, you have to place a reasonable limit on the number of photos. Let’s say that you based your quote on two or three per page. Then you get an envelope in the mail with 4,271 photographs to scan, edit, and incorporate. You need to be able to pull up the proposal and point to the line that says “…up to two photographs per page, not to exceed 12 total.”
The same sort of logic applies to the amount of text you will write, special features on the site, additional services, etc.The Basis of Cost Estimate is there to show the client exactly what you are going to do. It is also there to limit you client’s ability to add surprises or extra work without paying additional fees.
3) ExclusionsEverything up to this point has been describing what you will do. The Exclusions section describes what you will not do.
Exclusions are an essential part of the proposal because many of your clients are not computer literate. Even those that have some computer skills don’t know much about Web site design (or they would do it themselves).
Before you know it, your clients will start asking you questions about setting up their e-mail and problems with their computers. They will also start forwarding SPAM (that shows up in their inbox) to you for your comment. (Yes, they really do this!) You will also get questions about Web site design, HTML, and other Web sites. You certainly want to provide a high level of support to your clients, but you need to be able to put reasonable limits on that support. With the incorporation of the Exclusions paragraph, you can point out to them that these questions are beyond the scope of the agreement and you can justify charging an hourly consulting fee to address them.
Be sure to include something like this in every proposal you write…This proposal does not cover:
• HTML instruction
• Computer instruction
• Web site design instruction
• Web site and computer support beyond that specified herein
4) Site Map
The site map is a list of pages that you expect to include in the new site. It should also include a brief description of each page and a list of special features that will be found on that page.
Define the site map as accurately as possible because the size and complexity of the job are defined here. If this is not done correctly, you may not be paid what the job is worth, or you may have to increase the client’s cost. Both scenarios are not pleasant.
The site map in your proposal can be very simple…• Home Page -- introduction to the client’s business and products
• Article Pages -- up to six article pages, written by the client
• FAQ -- Frequently Asked Questions
• Guarantee -- product warranty information
• Testimonials -- comments and feedback from customers, includes a feedback form
• Contact Us -- company address, phone, fax, e-mail link, map, contact form
5) ScheduleBoth you and your client need to know how long the work is going to take.
And just so you know, it will take longer than you expect, especially if you are just starting out. (Unless, of course, you are using SBI! which will look after much of the tedious, time-consuming work.)
You need to be very careful with the schedule. It will eventually be incorporated into the contract and will become legally binding. You don’t want to commit yourself to any dates you can’t achieve. You also don’t want to miss any contract dates because of things you can’t control.
There are easy ways to deal with this…First, break the job into three or four major sections and define the tasks to be done within each section. This will give you bite-size pieces. It is much easier to estimate the time required for small tasks.
Next, use approximate estimates (3-4 days, 2-3 weeks, etc.). This will give you a lot of breathing room in your schedule.Finally, include the following paragraph in your proposal…
This schedule defines the major tasks to be completed during the life of the project. Individual tasks may be added, deleted or moved as required to meet the demands of the design. The elapsed times are estimates and may vary depending on workload, changes, customer submissions, and third-party service providers.
Unless your client is working against a specific deadline, he will probably accept these parameters.6) Fees
How much is it going to cost? This is the most important thing your client wants to know.
You have to make this part very clear. No matter where you put it in the proposal, the cost quote will be the first thing your client reads. In fact, it may be the only thing your client reads.
Your cost quote must be very easy to understand…Web site Development (80 hours @ $75.00/hr.)$6,000 Search Engine Registration Fees $ 449 Domain Name Registration Fees $ 30
Total $6,479Generally, the payment schedule follows this pattern… 1/3 advance, 1/3 midpoint (client approval) and 1/3 delivered (client approval).
You should also include a separate section for recurring fees (hosting, domain name renewal, etc.).
7) Submitting Your ProposalAfter your proposal is complete, you need to submit it to your prospective client.
Your proposal is a marketing document. It can make the difference between working (i.e., $$$) and not working.
Make it impressive. It should be visually appealing, clear and easy to read, and free of typos and errors in grammar. If you have difficulty with any of these things, get someone to help you. Your client will make his final decision based on your proposal. It would be very sad to lose this job because of a few spelling mistakes.
You must also make sure that the proposal addresses all of the client’s requirements and that it answers all of his questions.
• Mail
• E-mail
• Deliver in person
If you choose e-mail, don’t just copy it into the email, send it as an attachment so your prospective client can see your proposal in all its glory on the screen. If you just paste it into the e-mail, it will be sent as simple text and all of your layout efforts will be lost.
If you deliver it in person, be sure to present a professional appearance.The proposal should include a cover letter that introduces the proposal and perhaps highlights some special features or skills that your design and/or company has to offer. Anything that you can do to make yourself stand out from the competition will work to your advantage.
After you send the proposal, call your prospective client to tell him that it is on its way. Offer to go over it when it arrives so that any questions can be cleared up quickly. If you don’t get a call in a day or so, follow up with another phone call to verify that the proposal was received and to answer any questions.
8) Contract
Whereas, the party of the first part, hereafter known as The Party Of The First Part, shall agree to enter into agreement, hereafter known as The Agreement, with the party of the second part, hereafter known as The Party Of The Second Part…
What does it all mean? Why is it so confusing?As a designer, you speak one language (HTML, CSS, Search Engine positioning, etc.). Lawyers speak a different language. They don’t have to learn yours, but because you are the party of the first part (or is it the second part?) and you will be issuing contracts, you should learn to understand theirs.
So let’s start with some contract basics…
A contract is a signed, legally binding agreement between you and your client. It defines your responsibilities (design), the client’s responsibilities (payment), and the requirements and limitations of the job.
As a professional designer, you will have a standard contract. It will have a large section of “standard legal stuff” where you fill in the blanks (your name, client’s name, etc.). It will also include a place where you will insert the specifics of the job from the proposal.
Here is some sample information that should be in the “standard legal stuff” section of your contract…a) Who’s who…
Your name and client’s name, or the names of your businesses
b) Responsibilities of both parties…
What services you are going to provide (Web site design, Search Engine submission, graphic design, etc.)
What your client will provide so that you can complete your task (graphics/photos, information, etc.) and what your client will pay you for your services.
c) Special considerations…Limitations on the work you will do, fees for additional work, etc.
d) Confidentiality…
You agree not to give any of the client’s proprietary information to anyone. Your client agrees not to give any of your proprietary information to anyone.
e) Copyrights…
Who owns the work products (Web site, graphics, text, etc.) when the work is done? Does the client have unlimited rights to sell and distribute these, or is he limited to just the one copy on the Web site? Do you have the ability to use the same design and graphics for another client?
f) Indemnification…If your client gives you material to use on the site that belongs to someone else and you get sued, what happens? The contract should include a clause that says the client will assume financial responsibility if you are sued because of his actions. He should also be protected from you.
g) Termination of contract…What happens if one party wants to end the agreement? Do you get paid? Suppose you are the one who wants to quit? Can you?
h) Limited warranty…
If you run into problems and cannot deliver the final product, what are the client’s legal options? Can he sue you for millions of dollars? Your contract should limit your liability to just the value of payments that were made to you. The client should be able to get his money back, but no more.
i) Governing law…Contract laws vary from country to country and state to state. Where is your contract defined?
j) Severability…
If one paragraph of this agreement is declared invalid, the rest of the agreement is still in effect. This is necessary in the event that a court declares part of your contract invalid.
k) Force Majeure…The client cannot hold you responsible for events beyond your control (earthquakes, floods, personal tragedy, etc.). However, you are still responsible for completing the work after the problems have passed.
When you take all of this legal stuff and incorporate the contents of your proposal, you will have a very complete contract to give to your client. It will define who is responsible for what, what work is to be done, how much you are to be paid, etc.
Some designers prefer to work without contracts. They feel that contracts are impersonal and that a handshake is sufficient. This sounds great until you get a client who decides not to pay you. It happens all the time. And if you get stuck in a position like this, there is little you can do about it.
And don’t even consider writing your own contract. Contracts are written in a very specific language that only lawyers and judges speak. The language is very clear to those who speak it. Many words that you and I use everyday have a completely different meaning when used in a legal context.
If you write your own contract and you have to go to court to enforce it, the slightest mistake in the legal language can render it invalid -- or may even turn it against you. Your contract should come from a lawyer and it should reflect the conditions and events found in your business. But having a lawyer write a Web site design contract for you can be fairly expensive.
There are some free contracts available on the Internet. They tend to be very simple and most don’t address all of the problems you will run into. There is also no guarantee that these freebies were written by legal professionals. Do your research carefully.
“Start Your Own Home-Based Website Design Business” includes a contract that my lawyer and I developed specifically for my business, Website Design Biz.com (http://websitedesignbiz.com/).
We started with a standard services contract, and then I had my lawyer add clauses to address every problem that I ever faced and every problem that I heard that other designers had to face. And when it was complete, I went through it clause by clause and translated the “legalese” into English.
You are free to customize this template for your own use.
Well-written legal proposals and contracts are essential to the longevity of your business. They protect the obvious -- your time and finances. However, they also protect your enthusiasm -- a precious asset that is not always valued in the early days of your business.
A constant struggle to make ends meet, due to avoidable mistakes or omissions in either the proposal or contract, is psychologically draining. This type of situation can make you question your ability to run your own business.
Don’t get caught in a downward spiral. Spend the necessary time to get things right at this critical beginning stage!
There are so many variables to consider when you are starting up your own business. This Course highlighted a few of the more important ones to get you off on the right track. It’s now in your hands.
OK, a few final words and then you’re off…