Canadian Farm Business Advisory Services

Tips for Preparing a Proposal

Writing the contract

Normally, the service provider (the consultant) prepares the proposal or "letter of engagement" of services, not the client. It is important that you are familiar with what is in the proposal. A properly written contract clearly states who is responsible for what and helps prevent unpleasant surprises. When you and the consultant sign a contract or letter of engagement, you are both part of a legal agreement.

Ask specifically for everything you want from the consultant. If you don't ask for it, you may not get it. Specify everything you expect the consultant to deliver or produce.

Develop a specific action plan and time line. Outline what you want the consultant to do, when each task will start and end, and how much will it cost. These are the requirements for a proposal (please contact the Agri-Renewal office in your region should your feasibility assessment exceed 180 days)

Develop a cost breakdown and per diem rate for each task.

Define who will do the work. Have the consultant identify how he or she will address the elements of the feasibility assessment, who will work with the consultant and who will do the work, including associates, other companies, or other experts.

Specify who owns the work. Identify who owns what the consultant produces, what level of confidentiality is expected, and how information is to be released, if at all.

Specify reporting requirements. Specify when, how, and where reports will be delivered to you. You may want to receive interim reports as well as a final report.

Specify the payment arrangement. The consultant may be paid either a flat fee or an hourly rate for services. The consultant may ask for a deposit up-front and progress payments. Ensure that the consultant's duties are completed and invoices are paid in a manner as specified in the contract. While it is important that the consultant is paid in a timely fashion, be sure not to pay in full until the consultant's duties are completed.

Include provisions for non-performance or unforseen circumstances. Identify in the contract what you would consider to be non-performance and the consequences of non-performance. It is important to reserve the right to terminate the contract in the event of non-performance or other unforseen circumstances.

When to enter into a contract. Avoid entering into a binding contract until your proposal has been approved. The arrangements you make with the consultant should be subject to approval of your application.

Determine the cost of the consultant's services. Cost is important when selecting a consultant.

Negotiate the price. The price the consultant quotes may be negotiable. If possible, consider quotes from more than one consultant. You should expect all invoices and quotes to be itemized for easy identification and tracking. Note that consultants should not charge you for their costs before you enter into a contract with them (e.g., their time to prepare their proposal or to attend meetings to discuss their ideas with you).

Receive interim payments for Succession Plans and Follow-up Plans. AAFC can make interim payments for succession plans, as long as you provide a description of the deliverables and their cost and clearly explain the need for these payments in your proposal. Interim payments can also be made if you have included follow up in your initial plan. The consultant should provide you with a schedule for payment. Any payments during the course of the work are interim payments. If interim payments are requested in the proposal, you should make arrangements to allow for these payments. There may be breaks in the flow of work, (i.e., where a decision has to be made prior to continuing; or payment for hiring outside experts). Remember, reimbursement may take some time, cash flow may be a concern, and interim or "progress" payment is normal; however, progress payments must be specified in the original contract.

Include an explanation as to why a feasibility assessment is not required or that a previous assessment has been completed and attached to the proposal (only applicable if you are submitting a business plan).

Make the final payment. Ensure that the work is finalized as specified in the contract and has been approved by AAFC before a final payment is made. Trying to get someone to complete work on a contract after they are paid in full is more difficult.

Preparing the Proposal and Elements of Your Plan >>