What is a Bid Proposal?
Bid Proposal or just proposal is an offer by the service provider or freelancer in response to a project s/he is interested in working on. Usually the mandatory components of a bid are: the bid amount (hourly or fixed), the proposal and time to complete. Other things like attachments (for sample) are usually optional. It thus follows that the differentiator (in your bid) is the proposal.

So here is how to write a proposal which will stand you a greater chance in winning the bid.

- Read the Project Description. Before you begin writing the proposal, read the project description in detail and any associated files to understand the requirements. Obvious, isn’t it? But in my experience as a service buyer (and I have posted more than 170 projects), more than half of the bidders just don’t read the requirements. There is nothing more annoying than having to waste time discussing a project with freelancers who have not understood the requirements. The description will give you an idea of how much effort is required and hence the amount to bid. Is this amount within the budget of buyer? If not, are the project returns worth the effort? Are there any implicit requirements (e.g. I want a standards compliant website will mean different things to different clients)?

- Do your homework. This is where you try to read the project buyer’s mind. The buyer may post link/s to website/s he likes, or a lawyer may have given a sample data entry for contact info of accountants, or a consultant has given some logo concepts she has in mind…you get the idea. View the links, samples etc and if a small sample or design comp can be given in short time of say, 30 minutes, do it and attach it with the proposal. This will instill confidence in the buyer about you.

- Tailor the Proposal. As a buyer, I just delete meaningless bids like “I can do it” or 900 word long templated proposals. If they don’t have time for my project bid, I don’t have time for them. Period. Moreover, no employer will go through lengthy proposals for a low budget project (< US$ 250). As a freelancer, you must appear interested in the project; this is done by addressing the requirements and may be even recommending an alternate solution or pointing out some discrepancies. Tell them how you intend to program that software, or what camera you will use to get those photographs and other resources which you will use for the project.

- Provide details of Relevant Skills and Experience. Instead of tooting your entire resume, just mention those skills that will be advantageous to the employer’s project. When listing experience, for instance don’t send a list of 20 websites you have designed, if the requirement is for WordPress blog. Just 4 or 5 of your best projects will be enough to gauge your ability. Be careful of sending data (e.g. Research Reports) that may be confidential. If in doubt ask the past clients.

- Answer Employee Questions. If there are any. Preferably bullet point them to separate each of the responses.

- Mention Deliverables. Be very explicit here. Specify what the deliverables entail e.g. logo in JPEG, GIF and CDR format or research article with online references only etc. If the buyer does not understand some aspects, take it upon yourself to explain them – this will save you a lot of frustration later and possibly even avoid arbitration or unpaid invoices.

- Cost and Payment Terms. Specify whether the bid price is tentative (to be confirmed say, pending certain clarifications) or final, fixed / flat or hourly and the currency. Try and convert it into the approx local currency of the buyer (http://www.xe.com/ucc/ is a good converter). Then mention the payment schedules / terms – escrowed amount to be released at which stages of the project e.g. 25% at the beginning, 40% at alpha stage and balance when the software is delivered. Also mention what out of pocket expenses may be required to be reimbursed (stock photos, music etc)

- Time Schedules. Inform the buyer as to how much time this will take. If the project can be broken into various stages, do so. e.g. first website design comp within x days, changes to the design within y days (for each change), slicing the design (upon approval) within z days.

- Last but not the least. Greet the buyer; if he writes his name at the end of project description, do use a simple “Hello Greg” or “Greetings Mr. Smith”, rather than “Hey There!”. On the same line, please never use slang or SMS or such language- leave out all “gr8″ and “lol” for your forum posts. Use simple language that focuses on the buyer and his project. And yes, do check for any typos.

This might seem a long bid proposal, but once you put it into words, it will be just under 350 words. Ofcourse very small projects (like making a form work or touch up an image) merit a not-so detailed proposal.
Each project buyer will receive many proposals. And one of the reasons s/he is outsourcing the project is to save time. So it is logical that s/he may not have enough time to read all 900 word proposals. Make yours stand out.