PSA: Your Contract is NOT your Proposal
This hot topic has come up enough times over the last few months with coaching clients that I feel compelled to put out a Public Service Announcement for interior designers everywhere. 👩💻
PSA: Your Contract is NOT your Proposal.
In fact, these are two distinct documents that, while symbiotic in nature, should be stand alone. Today I’ll define the difference and what each document entails.
Why is this so important? Simply put, it’s just easier for clients to digest the proposal first. It’s something that can be negotiated where your contract can not. Your proposal should be exciting! It’s a warm and friendly invitation to work with you. You want to get your client excited and to see the potential at the end and the value in working with you. Your contract on the other hand, is boring, albeit very important, legal ease. Let’s dive into the details.
When do you send these documents? With full-service clients, after I’ve had an in-person consultation I will prepare and send via email the Proposal and Contract for approval.
E-Design and Designer-for-a-Day Clients will receive these after a phone consultation.
Related Posts:
How to Define Your Design Services
Creating Your Services & Pricing Guide
How to Run a New Client Discovery Call
The Proposal
Your Proposal is a customized document (from a template of course) for each project that includes 4 key elements:
Welcome Letter
Description of the Scope of Work
Overview of the Design Process with anticipated deliverables
Overview of the Design Fees.
Just like I have Contract Templates for the different services I offer, I also have Proposal Templates for the different services that can be quickly customized.
Let’s look at these in a little more detail:
Welcome Letter: This is a friendly, short letter that thanks the client for the opportunity to serve them, a brief statement of what’s included in the Proposal, and the next steps.
Scope of Work: This section outlines what has been discussed as part of the design work you will be doing for your client. For example
Example A - Kitchen: Complete renovation of existing kitchen. New flooring, cabinetry, counters, backsplash, plumbing, hardware, lighting, and new appliances. New layout to be determined in Concept Design Phase.
versus
Example B - Kitchen: Cosmetic makeover of existing kitchen. New flooring, reface and paint existing cabinetry, new counters, plumbing, hardware and lighting. Existing appliances to remain. Existing layout to remain.
Overview of the Design Process: This section outlines how the design process will unfold. It generally remains the same for different project types but it’s easy to edit and add/remove services based on the project’s needs.
Project Fees: The final section should outline how you will charge your client for services, such as flat fee, hourly, hybrid, etc. It includes your design rates, any staff/subs rates, and when those fees are due. You can see why a Proposal Template makes sense here because you wouldn’t charge an E-Design Clients the same as a Full-Service or Designer-for-a-Day Clients. When it’s a good fit, you may also offer Pricing Options to your clients.
It is SO important no matter how you charge (flat fee, hourly, etc.) that you tie your Scope of Work to the Design Fees. In the kitchen example, it will take considerably more time to design a completely new layout than it is to work with the existing layout. Therefore, your fees will reflect the scope. Should your client later decide to change the scope of work, such as want all new cabinetry, you can easily reference your Proposal to let them know an additional service fee (“Add Service”) will need to be collected.
A final note is that the Project Fees are reiterated in the contract. So if I send a Full-Service Proposal, it will be sent with a Full-Service Contract which states how/when fees are collected.
The Contract (aka “Agreement”)
Your Contract (sometimes called an “Agreement” or “Letter of Agreement”/ LOA) is your legal agreement that should remain the same for all clients - barring a few fill-in-the-blank spots. You may, however, have multiple Interior Design Contracts. For example, I have 3 different Client Agreements:
Full-Service Agreement
E-Design Agreement
Designer-for-a-Day Agreement
Each of these Agreements is similar, however, they have a few different sections based on the type of service being provided.
The Contract is the legal language that protects your interior design business and lets your client know how to work with you. It includes a range of policies such as payment, photography, communication, and purchasing policies. It references the Proposal so they are legally tied together but separate. Many of my key policies are reiterated in a Client Welcome Package. The contract is where they will acknowledge and accept these terms with a signature.
How to Deliver the Proposal and Contract
In terms of how these documents are created and delivered, I use Dubsado to help organize and track all my client interactions. I’ll use it to send the proposal which is tied to the contract.
The client will digitally approve the proposal which automatically takes them to the contract to sign, then to the payment portal to pay the retainer. It’s extremely efficient and I can see at a glance if I have any unsigned/unpaid clients. The best part is if they haven’t completed the process, Dubsado automatically sends them a reminder email that I’ve set up to go out after 3 days.
If you’d like to try Dubsado, you can get 20% off your first month/year with the code designersoasis20
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If you’re not quite ready to jump on the Dubsado bandwagon, simply send an email and attach both as a PDF. You can also send the contact with any of the contract signing tools available such as Hellosign.
Getting crystal clear on your interior design processes, services, terms, etc. is going to set you up for success for years to come. If you don’t already have templates for your Proposals and Contracts, make time to do it so the next time you have a new project on the horizon, you can quickly put together the information you need to get the job.
