How to price a proposal

Start from cost, then look at value

Every price needs a floor, and the floor is cost. Count the hours each task really takes, including meetings, revisions and admin, and cost them at a rate that covers your wages, superannuation and overhead. Add direct costs such as materials and subcontractors. That number is what the job costs you to deliver. Margin sits on top. How much depends on the risk, how unusual the work is and what the outcome is worth to the buyer. A website that will generate leads for a law firm is worth more to that firm than the hours suggest, and pricing a share of that value is legitimate if you can explain it.

Fixed, itemised or time and materials

A fixed price is the easiest for the buyer to approve and the riskiest for you, so use it only when the scope is truly defined, and list exclusions. Time and materials suits uncertain work but needs a cap or an estimate range, or the buyer will hesitate. Ongoing services are usually a monthly fee. Whatever the model, present the price in line items, because a single number invites the question of what it includes, while a short itemised list answers that question before it is asked.

Options without a menu

Three full packages labelled bronze, silver and gold work on websites with thousands of visitors. In a proposal to one buyer they often cause the buyer to choose the cheapest and question the rest. A better pattern is one recommended scope plus one or two optional items the buyer can tick: extra pages, a training session, a maintenance month. The core price stays intact and the buyer gains a feeling of control. Price psychology research on anchoring suggests the first number seen sets expectations, so lead with your recommended scope.

Common mistakes

Underpricing to win is the commonest, and it is hard to raise a price with an existing client later. Forgetting GST, or not saying whether prices include it, causes disputes at invoice time. Hiding assumptions means scope creep comes out of your margin. Listing dozens of tiny items invites line by line negotiation. And omitting the deposit and validity leaves cash flow and cost risk unmanaged. Each of these is fixed by writing the price section as carefully as the rest.

Where it shows up in the product

The generator's brief takes price hints, and every number given becomes an item at exactly that price. The single pricing table shows Item, Qty, Unit price, Tax, Discount and Amount, followed by Subtotal, Discount, the tax line, Total, then Deposit due now and Balance when a deposit is set. Items can be optional, selected by default, or have an editable quantity with a minimum and maximum, and a proposal holds up to 200 items. The default currency is AUD with GST as the tax label. There are no recurring invoices; a monthly fee is one line item with month as its unit.

Questions people ask