Question:

I was just wondering if a Letter of Agreement and a Proposal could be one document? I guess what I am trying to ask is: Can I combine the two?

Answer:

The only time that would be acceptable is when you are doing a small job where you can add a few hours of your time to a product proposal.

Other than that situation, do not combine the two. Here’s why:

Generally, the public and your new clients don’t understand how we work or exactly what it is that we do. The more we can clearly educate them how our design services work, and help them understand the benefits of our purchasing services, the better off we all will be.

It is important to clearly separate and define the design portion of your work. This is the part that utilizes your creative genius and develops that “one of a kind” space for your client. This takes a considerable amount of time to work out all the details.

The time that it takes to develop all the purchasing specifications is part of the Letter of Agreement. This includes a description of everything that needs be purchased, who it will be purchased from, and how much it costs – all of which is outlined in the scope of work in your Letter of Agreement.

The Proposal to purchase merchandise comes after the design work has been completed. This is an agreement to buy the merchandise that has been specified in the Letter of Agreement above. A purchasing/procurement fee may be added to the merchandise to cover the administrative work to produce the purchase order, track the incoming order and set up delivery.

When you clearly separate the two tasks your pricing remains transparent and your clients are well informed and happy.