Article summary
When I first started helping with sales, lots of the language, acronyms, and documents associated with enterprise sales opportunities were a big mystery to me. Being observant and listening closely helped me quickly build my enterprise lexicon, but it was not until I had personally worked the full sales cycle all the way from new opportunity to completed product that I fully understood the reasoning behind all the extra enterprise stuff.
The goal of this post is to help demystify the terminology, documents, and process associated with an enterprise sale. I will cover the major components and documents. Please note, this is only a common case. Sometimes things happen in a slightly different order, and sometimes there are more mysteries to solve.
1. Sales Process
The documentation exchange between you and the enterprise is generally kicked off by you supplying a Proposal for a project.
The proposal generally outlines:
- Your Understanding of the Problem
- Your Proposed Solution
- Estimated Time and Cost
The enterprise client requests a proposal by either reaching out directly to you by building a relationship and describing the project, or through a more formal Request for Proposal (RFP).
An RFP traditionally:
- Gives Company Background
- Describes the Project
- Defines the Required Format for the Response
Some organizations require formal RFP responses from three or more vendors before they approve a project. This helps ensure that the project was competitively bid.
Atomic prefers engaging with clients through the personal relationship style. We rarely compete in RFPs if we haven’t first had personal contact with the client. In fact, we believe that the client should focus on the vendor and not on the project when vetting a technical partner. Carl describes our thinking on effective RFPs in this post.
2. Vendor On-Boarding
Say the client likes your proposal. Now they need to quickly shepherd you through their vendor on-boarding process.
The enterprise needs to legally accept your firm before you can proceed. You can pass through this gate by negotiating an MSA, or Master Service Agreement. Lucky for you, enterprises employ lots of lawyers so your main challenge will be negotiating on terms.
MSAs define the company to company relationship and generally contain:
- Non-competes
- Non-solicit
- Liability and Workers’ Compensation Insurance Requirements
- Project Cancellation Terms
- Payment Terms
- Termination Terms
- Warranties
- MSA Duration
Subsequent projects with the same enterprise clients will not require an additional MSA.
3. Starting the Project
Now you are in the system and almost ready to kick off the project. The next document that you need to execute is an SOW, or Statement Of Work. The SOW is essentially your original proposal parroted back into your client’s legal format.
The SOW outlines:
- Project Requirements/Objectives
- Timeline
- Cost
The SOW is the official guiding document for the project. After the SOW is executed, your client’s accounting department will generate a PO, or Purchase Order, for you. The PO is a simple document that allows you to invoice the client.
POs normally contain:
- Simple Description
- Quantity
- Max Amount that Can be Billed
Now that all the documentation is out of the way, it’s time to get to work on the project!