A business proposal is perhaps one of the most critical documents you need to learn how to write. It is what spells the difference between success and failure, whether you’re a freelancer or you have a business of your own.
What is a Business Proposal?
According to Inc.com, A business proposal is a written document sent to a prospective client in order to obtain a specific job. Proposals may be solicited or unsolicited.
Business proposals are designed to persuade an organization to buy a product or service.
A business proposal can be solicited or unsolicited. Solicited proposals are mostly requested by the client examples are Request for Proposal (RFQ), Request for Quotation (RFQ), Invitation for Bid (IFB) etc.
On the other hand, unsolicited proposals are not requested by the client. A typical example of an unsolicited proposal is a marketing brochure.
Business Proposal vs. Business Plan
Quite often, the terms “business proposal” and “business plan” are used interchangeably, giving you the impression that they are one and the same. But they are not.
A business plan is a “formal statement of a set of business goals” and how these would be achieved. These documents sometimes can be included in a business proposal.
A business proposal is a focused sales document intended to describe how a company will approach a project, state the value of the project to the client and solicit the client’s business.
Basic tips for writing a business proposal
1. Get the basics right.
Having your proposal well laid out and signposted is a must as it helps the reader to negotiate your document. Spelling and grammar have to be perfect. You might be quite relaxed about the odd typo or a forgotten semi-colon but that doesn’t mean to say your client will be and they could read into it that you are a sloppy worker. Remember your document is selling you.
2. Include clients testimonials.
Nothing would sell your business like credible customer testimonials. Include client quotes in your proposal and it will stand head and shoulders above the competition. Very few people do this but it brings the proposal to life and provides a third-party endorsement. It tells the reader that you know what you are doing.
3. Understand the customer needs.
The best thing you can do to win a business proposal is to thoroughly diagnose your client’s problems and write your proposal around solving those problems. What challenges is your client facing? Once you identify these, you need to figure out how your product or service can help. Then, frame your proposal in a way that shows how your prospect’s needs will be addressed.
4. Learn the art of sales persuasion.
One of the main goals of a business proposal is to offer a solution to a problem that potential client is facing or will face in the future. Cover all the benefits that the client might be able to extract from your product or service. One key aspect to remember is that you should make the proposal centered on the benefits that will be received by the client rather than what you can offer.
5. Be fair in pricing.
Always start with list prices in your initial proposal. Discounting your products in the first proposal basically says you don’t believe your products are worth paying list price for. You want to make a good deal, but don’t sell yourself short. Prepare a quote or invoice that is fair to your prospect, but ensures you sell for what your product is worth.
How to write a business proposal – Contents & Structure
Writing a successful proposal can be made easier through the development of a proposal checklist that contains the necessary standardized information that is typically contained in 80% of all of your proposals.
Vendors responding to a proposal submission must always follow the buyer’s preferred, stated format with the proposal. Common elements requested, which can also be used in unsolicited proposals, often include:
1. Cover letter
A cover letter is a brief introduction. Include a one-liner about your company, brief background info about how your company came to be, and a short overview of what makes your company better than the rest.
2. Cover page
Your business proposal should start with a cover page, which should include your name, the name of your company, the name of the person to whom you’re submitting your proposal, and the date submitted.
3. Table of contents
Depending on how long your business proposal is, a table of contents is a nice touch. Include it after your cover page, and before you launch into any details.
4. Executive summary
Introduce your proposal with a great executive summary, one that really sells your business and the products or services you provide. You can draw from your business plan’s executive summary here, too.
5. Overview or summary of the problem or need
Following your executive summary, go on to discuss the problem that the client is currently facing. Think of “problem” or “issue” loosely; after all, their main problem may just be finding the right person to complete their project.
6. Strategy or approach to solving the problem
This is where you’ll get into the nitty-gritty of how you actually plan to fulfill your client’s needs. While earlier sections might have been a bit surface-level, this section of the business proposal is where you’ll go into detail about what steps you’ll take to solve their problem.
Be clear about how long will your proposed project take? Making sure you and your prospective client are on the same page from the outset will help make sure that the relationship stays positive for both of you, and that you don’t set your client up with unrealistic expectations.
Here is where you get down to brass tacks and state the cost, and payment schedule if necessary. Always refer back to the client’s RFP whenever possible, to make sure you’re supplying them with all the information they need to help make their decision.
Even the most well-crafted solutions can get rejected due to a sub-par proposal. Writing a business proposal requires that you convincingly articulate your understanding of the potential client’s problem, as well as the reasons your company is the best choice.
A business proposal can make or break your chances of securing a new client. Write a great one, and you’ll likely snag their business. Write a poor one, and you might lose out—even if you’re offering the best service out there.