Difference Between Proposal and Quotation: Explained 2025

The difference between a proposal and a quotation lies in their purpose and content. A quotation provides a detailed cost estimate for specific services or products, often used in straightforward transactions. In contrast, a proposal is a comprehensive document that outlines a solution to a client's problem, including methodologies, timelines, and pricing. It is typically used in complex sales processes. Understanding when to use each is crucial for freelancers and businesses to optimize resource allocation and client communication. Use a quotation for clear, price-focused transactions and a proposal for projects requiring detailed planning and negotiation. This distinction helps streamline business operations and improve client satisfaction.

As a freelancer, you probably know the feeling of getting outshined by competition. In a world where independent professionals vie for contracts with businesses (with more and more joining the scene each day), it can be difficult to stand out. And even if you do put in the effort to appeal to the client, there’s always that possibility of them going for someone else instead.

Fortunately, that doesn’t have to be the case. By knowing when you’ll need to put in the effort, you can save time and resources. You don’t need to do a full-blown proposal template or quote template every time you want to strike a deal with a client, though it could help. In many cases, all you need to do is provide a detailed quote for your services. However, not many freelancers know when they should use proposals versus quotes.

Sure, you could play it safe by going all-out and drafting a freelance proposal every time you’re working with a client, but all the added effort could go to waste if you don’t land the deal. In a similar way, providing quotes can be a great method of simplifying the process, but you aren’t exactly selling yourself that way, either.

This blog tackles proposals versus quotes and explains the differences between the two. They are more different than you might think.

The benefits of proposals vs quotes

Let's start by having a look at reasons to draft and send a proposal or a quotation.

1.1. They’re comprehensive and transparent

Let’s say that you’re part of a company, and are tasked to find a freelancer to provide assistance with one of your projects. Browsing through a list of applications, you notice two that stand out. You contact them and ask them what they can offer to your team. One explains their services and hands in a quote, while another gives you a detailed proposal that covers every aspect of the project.

If both applicants offered similar services, then the one who submitted a proposal would be the better choice. Quotes are great for number-crunching and forecasting. However, proposals take things to the next level. They include the information present in quotes and also cover more abstract aspects of the project, such as workflow.

The main challenge with proposals or quotes is the effort required to create them properly. That’s why hundreds of thousands of professional freelancers worldwide use Bonsai, a tool that simplifies creating everything from basic proposals to contracts. You can sign up and try Bonsai for free to elevate your freelancing career.

1.2. They’re persuasive

Numbers aren’t the only way to convince clients to work with you. You could have the most affordable quote among the client’s shortlist, but if you don’t sell yourself, another freelancer may take your spot. In competitive situations, proposals serve as a vital persuasive tool.

It doesn’t take years of experience and an innate knack for business to write a stunning marketing proposal. And when done right, proposals can strengthen your relationship with the client, which can allow for smoother sailing, and potentially the job. When comparing proposals vs quotes, you’ll find that quotes just don’t have the same amount of persuasive power as proposals do.

What is a quote?

Understanding the purpose of a quote

A quote is a formal document that outlines the estimated cost for specific goods or services. It serves as a clear offer from a freelancer or business to a potential client, detailing prices, quantities, and terms. Unlike a proposal, a quote focuses mainly on pricing rather than project scope or strategy.

For example, a graphic designer might send a quote to a client stating that a logo design will cost $500, including two revisions. This helps the client understand the financial commitment before agreeing to the work. Quotes are often legally binding once accepted, so accuracy is crucial.

To create an effective quote, use tools like HelloBonsai or QuickBooks, which allow you to customize pricing and terms easily. Always include clear payment deadlines and any conditions to avoid misunderstandings later.

How to create a clear and actionable quote

Start your quote by listing the exact services or products you will provide, paired with their individual prices. Clarity here prevents confusion and sets client expectations. For instance, a web developer might break down costs into design, development, and testing phases.

Next, specify the validity period of the quote, typically 30 days in 2024, to encourage timely client decisions. Including payment terms such as:

• 50% upfront
• 50% upon completion

can also streamline cash flow. Tools like FreshBooks and HelloBonsai offer templates that automatically include these details.

Finally, review your quote for completeness before sending. A well-structured quote not only speeds up client approval but also protects you legally. Save a copy in your project management system for future reference and invoicing.

When to use a quote instead of a proposal

Use a quote when the client requests a straightforward price estimate without detailed project planning. Quotes work best for well-defined tasks like fixing a leaky faucet or delivering a set number of marketing materials. This makes them ideal for freelancers and small businesses handling repeatable or simple jobs.

In contrast, proposals are better suited for complex projects requiring detailed explanations, timelines, and strategic approaches. For example, a marketing consultant pitching a full campaign would send a proposal rather than a quote. Understanding this distinction helps you respond appropriately to client inquiries.

To decide quickly, ask clients if they want just pricing or a full project plan. Using the right document saves time and improves your professionalism, increasing the chances of winning the job.

The disadvantages of proposals vs quotes

There are certain aspects worth considering when it comes to creating and submitting either a proposal or a quote.

2.1. They’re time-consuming and require a good amount of effort

If you’re relatively new to the freelancing lifestyle, then there’s a good chance that you’ve never made a proposal before. At first glance, it may seem like nothing more than gathering data that you already have, and providing it in a persuasive format to the client, but it’s a lot more complicated than that. While proposals and quotations achieve the same thing, proposals require a lot more effort to pull off successfully.

Think about it. Freelancers already put in a lot of effort just to make themselves look more appealing in their social media profiles so that they look competent and experienced. It’s no different with proposals - you not only need to pull up figures and estimates but also qualitative analysis and a good case to explain your worth to your client. Doing this for every client that you work with will not only affect the time it takes to complete tasks but also add an extra layer of stress.

2.2. They’re risky if not done right

Taking time to construct a proper proposal brings along its own set of risks. Not only do you need to get everything prepared beforehand, but you also need to successfully deliver the proposal itself. Any sort of mistake or misunderstanding that arises from your proposal could ruin all the effort you put into it, along with your chances of landing that deal.

Now, let’s imagine that instead of making a proposal, you handed in a quote instead. You’d save yourself the extra work, and you’d have more time to focus on your current tasks. That could potentially improve the final result of your projects, and even open up the chance to work with your existing clients in the future, should they need your assistance. When one door closes, another opens.

Now that we know the ups and downs of proposals when exactly is the best time for freelancers to make use of quotes instead? Here are some general guidelines to get you started.

Who should use a proposal vs a quote?

When freelancers should use a proposal

Freelancers should use a proposal when their work requires detailed explanations, customization, or multiple options. Proposals allow freelancers to outline project scope, timelines, and deliverables clearly, which helps manage client expectations from the start. For example, a graphic designer creating a brand identity might include mood boards, design concepts, and revision policies in their proposal to demonstrate value beyond just pricing.

Using a proposal is especially beneficial for freelancers working on complex or long-term projects where negotiation and collaboration are expected. It helps build trust by showing professionalism and thorough planning. Tools like Bonsai’s proposal templates can streamline this process, allowing freelancers to customize and send professional proposals quickly in 2024.

To take action, freelancers should assess the complexity of the project and the client’s need for clarity. If the project involves multiple phases or deliverables, drafting a proposal will reduce misunderstandings and improve client satisfaction.

When small businesses should use a quote

Small businesses should use a quote when the service or product offered has a fixed or straightforward price and scope. Quotes provide a clear, simple cost estimate that clients can review quickly. For instance, a landscaping company offering lawn mowing services with set prices per hour or per visit benefits from sending quotes rather than detailed proposals.

Quotes are ideal for transactional or repeat business where the client already understands the service and only needs price confirmation. In 2024, tools like Jobber and QuickBooks can generate and track quotes efficiently, helping small businesses close deals faster without overwhelming clients with extra details.

To implement this, small businesses should establish clear pricing structures and use quotes for standard services or products. This approach speeds up the sales process and reduces administrative overhead, allowing business owners to focus on delivery.

How to decide between a proposal and a quote

Choosing between a proposal and a quote depends on the project’s complexity and the client relationship. If the job requires negotiation, customization, or detailed explanations, a proposal is the better choice. Conversely, if the service is straightforward with a fixed price, a quote is more appropriate.

For example, a web developer building a custom site should send a proposal outlining features, milestones, and payment terms. Meanwhile, a cleaning service offering a standard package can send a quote with a clear price and service description. This distinction helps avoid confusion and speeds up client decisions.

To decide effectively, evaluate the client’s needs and the project scope before preparing your document. Using software like Bonsai or Jobber can help create both proposals and quotes tailored to your business style in 2024, ensuring you communicate clearly and professionally every time.

When should you use a proposal vs quote?

Quotes, or quotations, may not be as comprehensive as proposals, but they are not obsolete. Quotes and proposals each have their respective uses. Freelancers can save time and effort by knowing when to use each properly.

To understand when to use quotes, you need to recognize the importance of convincing your client for the current task. Putting in too little or too much effort can ruin your chances or waste valuable time.

Companies usually ask for proposals or quotations depending on the information they need. Quotes are more common when clients base decisions on costs. Proposals are requested when clients have a shortlist of options for the task.

Clients often don’t ask for a quote or proposal at all. When getting to know you, they typically request estimates instead. But what makes quotes, estimates, and proposals different?

What are the differences between proposals vs estimates?

Estimate templates are less restrictive than proposals or quotations because they don’t have a fixed price. Quotes have a set price for a certain period, while estimates provide a general price range that considers uncertain variables like sudden price fluctuations.

In general, the differences between proposals vs estimates are almost identical to that of those between proposals vs quotations. Both estimates and quotations are nothing more than values, whereas proposals take these values to the next level with added information.

When to use proposals vs quotes

There’s no need to worry too much about comparing quotes, estimates, and proposals. All are useful tools in building relationships with potential clients, each with its advantages. Using Bonsai, you can create any of these in just minutes. Sign up for the free trial and see for yourself.

Whether choosing proposals vs estimates or proposals vs quotations, select the option best for your career.

What is a proposal?

Understanding the purpose of a proposal

A proposal is a formal document that outlines how you plan to meet a client’s needs by describing your approach, timeline, and costs. Unlike a simple price quote, a proposal explains the value and details of your service or product, helping clients understand why they should choose you. This makes it a powerful tool for freelancers and small business owners aiming to win projects in competitive markets.

For example, a freelance graphic designer might include a project overview, design concepts, milestones, and payment terms in a proposal. This clarity helps the client see the full scope and benefits, rather than just the price. Using tools like HelloBonsai or PandaDoc in 2024 can streamline proposal creation with templates and e-signatures, saving you time and improving professionalism.

To make your proposals effective, focus on addressing the client’s specific challenges and how your solution stands out. Tailor each proposal rather than sending generic documents. This targeted approach increases your chances of approval and builds trust from the start.

How to structure a winning proposal

A well-structured proposal typically includes:

• Introduction
• Project scope
• Deliverables
• Timeline
• Pricing
• Terms

Starting with a clear summary helps clients quickly grasp your offer. For instance, small business owners might begin by restating the client’s problem, followed by a detailed plan and expected results.

Including visuals like charts or timelines can make complex information easier to understand. For example, a web developer could add a Gantt chart showing key milestones. Additionally, specifying payment schedules and legal terms protects both parties and sets clear expectations.

Using proposal software such as Proposify or HelloBonsai in 2024 allows you to customize templates and track client engagement. This data helps you follow up strategically and improve future proposals based on what works best.

Why proposals matter more than quotes

Proposals matter more than quotes because they communicate your expertise and build confidence beyond just pricing. While a quote lists costs, a proposal explains how you will deliver value, which is crucial for winning complex or high-stakes projects. This distinction is especially important for freelancers and small businesses competing against larger firms.

For example, a contractor bidding on a remodeling job might provide a quote with prices, but a proposal will include design ideas, materials, timelines, and warranties. This comprehensive approach helps clients make informed decisions and reduces misunderstandings.

To leverage proposals effectively in 2024, combine clear explanations with competitive pricing. Always follow up with clients after sending a proposal to address questions and demonstrate your commitment. This proactive communication often seals the deal where a simple quote falls short.