Business proposal and how to write it
A business proposal is a request by a business or individual to complete a specific job or project; to supply a service; or in some instances to be the vendor of a certain product. It is not a business plan.
While you might use your business plan to help inform your business proposal when you’re writing it, these documents are not one and the same.
In its simplest form, a business plan is a guide for your business, a roadmap that outlines goals and details how you plan to achieve those goals. It is used to keep you on track and to support any applications you might make when seeking investors or when applying for commercial loans.
A business proposal on the other hand is used to try to attract and acquire business. It pitches your business, product, or service to a potential client, vendor, or supplier. A client, vendor, or supplier might also request a business proposal from you when trying to evaluate whether or not you’re someone they want to work with, or whether or not you can provide the services or products they require.
There are usually two types of business proposals:
- Solicited business proposals– There are two types of solicited proposals:
The first is in response to a Request for Proposal (RFP), where a government agency, a nonprofit organization, or a large company asks several companies to send them a business proposal to try to win their business, which is usually a large contract. When responding to a Request for Proposal, it is your job to write a business proposal that answers all the questions and requirements listed in the Request for Proposal.
The second type is less formal and much more common, and this is when a client who is interested in buying your product or service asks you to send them a proposal outlining the terms of the sale.
- Unsolicited business proposals– These are submitted to potential clients or buyers who have NOT asked you for a proposal. These are used to try to drum up business at companies you think will receive value from buying the products or services you sell.
Ultimately, a business proposal is comprised of three parts:
- A problem statement
- A proposed solution
- A pricing estimate*
An effective business proposal must be able to demonstrate to the buyer how your product or service can solve a major problem they have or fulfill a major need they have
The main goal of presenting a business proposal is to provide solution to a problem faced by a potential buyer. This section should be as comprehensive as possible, and able to address all the needs that you have pointed in the first section.
The way you write this section will depend on the solution you propose, how long it will take to implement, and your pricing model. If your solution will only take a short period of time, a fee summary will be adequate. For projects that are longer and take months to complete, you may want to divide when payments are due to correspond to completing project milestones.
Important Things to Remember When Writing a Business Proposal
If you want to make your business proposal really stand out and give you the best chance at winning a sales contract from your prospective client, we recommend that you do the following:
Conduct Your Research
Not all clients will provide you with clear details of their problems, needs and wants, especially if you are submitting an unsolicited business proposal. When writing your business proposal, study your competitors and the solutions they offer, and how what you offer provides a superior solution. Before a client buys from you, they will probably research your main competitors to see if what you offer is truly the best solution. You need to be one step ahead of them and prove how your solution is the best solution for their particular needs and that they will benefit far more if they buy from you than if they buy from one of your competitors.
Put Yourself in Your Client’s Shoes
Another key thing to remember when preparing a business proposal is to always put yourself in the shoes of your potential clients. By doing this, you will be able to give them intelligent answers to common questions they may have, such as “Why should we pay X amount of money for your solution? What is the return on investment we will receive? Can you prove to us that buying from you will be more advantageous to us than if we bought from XYZ Company instead?”
The number one question your prospective client will have is why should they buy from you instead of from one of your competitors? You need to be able to explain and prove why you offer the best solution. Usually the best way to do this is to highlight your experience and expertise, and provide case studies that detail how you helped other similar companies and how they benefited from buying from you.
So if you are thinking of writing a business proposal to a potential buyer it is necessary that you understand what’s required of you in order to prepare a proposal that will be of interest to your potential buyers