Being able to write a business proposal that works is crucial to the future success of any company. Without the capacity to write an effective business proposal, companies materially diminish their chances of growth due to the lack of collaborating with others or lack of securing investment. The lack of either can seriously impede a company’s ability to take advantage of one of the many ways to grow a company that requires funding or outside help.
Here, we examine what exactly a business proposal is so that writing one that works becomes that bit easier. We also investigate the different types of business proposals so that you can adapt your proposal to its aim. Finally, we provide a step by step guide as to what to include in your business proposal. Our article examines, as a result, how to write a business proposal letter as well as how to write a business proposal template that you can revert back to time and time again.
What is a business proposal?
A business proposal, in short, is a document that puts forward a sales pitch. It could regard a potential project which requires funding from investors or the prospect of two companies doing business together. Either way, it is meant to be a convincing document which seeks to persuade an individual or company to either buy products or services from a business, or provide funding or supplies for that business instead.
A business proposal should contain some basic information. For example, your business’s title and where to contact you. But it also needs to include what your pitch is and why that pitch is a good idea to take on. In doing so, you need to include information that explains fully why your business will be a success. That information can include sales figures and potential or pipeline business.
A proposal, in short, needs to make your underlying pitch highly persuasive by including facts and figures that prove your business will be an unbridled success.
To some, it may be tempting to simply use a business plan as a business proposal - or at the very least lift huge sections of the document into the other. However, a business proposal and a business plan are very different documents. A business plan is a factual outline of what and how a business operates. A business proposal, in comparison, is how a business will grow in the future and how its sales will grow. A business proposal is thus directed at outside investors or businesses calling for their action.
Different types of business proposals
There are various forms of business proposal. They are:
There are actually two forms of solicited business proposal - so ensure that you know which one you are writing before beginning the document. A formally solicited business proposal is in response to a request made by an outside investor, supplier or potential business partner. For that reason, these proposals will have from the outset many questions that need to be answered in response to the requirements set out in the request. It means you can tailor your proposal more specifically to the needs of what has been asked of you.
Secondly, an informally solicited business proposal is also possible. In this instance, you will not have been sent an official request for information. Instead, they will have highlighted their potential interest in your business in some other way. It is therefore up to you to take the proactive approach to send them a business proposal which will entice them to buy your goods or services.
Unsolicited business proposals are documents that you send to other entities in the hope that they will enter into your suggested transaction. They can take many forms, but owing to the unsolicited nature of them, they can often be a generic document that tends to advertise why doing business with you is a good idea - without being able to tailor the proposal to the outside party’s particular needs. Some modification can take place, but without being approached by a company directly, you may never know their specific circumstances. This can make writing such a proposal more difficult, but it is not impossible by any means.
Step-by-step: What to include in your business proposal?
Given that a business proposal is trying to persuade another entity into a business agreement, it can be prudent when writing one to use a sales contract or other legal documentation as its basis. A sales contract or cooperation agreement is a great place to start as those documents may well exist already at your company. Or, it can be beneficial to use a template from Contractbook’s extensive library. Using one will ensure that you will include all the information you should as well as making sure that any legal elements are taken care of from the outset.
Here is how you can write a business proposal template or how to write a business proposal letter to ensure success. You need to include the following:
- Who you are
It sounds simple, but it is essential to include both who you are and who your company is. This is particularly important in the cases of unsolicited proposals where a company or individual will not be expecting your contact.
- Identification of a problem
In your proposal, you need to identify the problem and then go on from there to solve it. Without laying out what you believe to be the issue in the first instance, the reader may not know what or why you are approaching them. And, crucially, they may miss the point of the proposal all together.
- Why and how your company answers that problem
In this section, you can get into the crux of your business proposal by going through why you are a good business to buy goods or services from or to invest in. You, therefore, will be detailing why you solve the identified problem and how your company provides a solution.
In fact, outlining how your company provides the solution is arguably one of the most vital bits of the document. It is what will set you apart from any competitors or will emphasise why your proposal is a viable solution to a hole in the market. It is what will make your proposal as enticing as it can be. It is in this section that you can really sell yourself and why you are such a great company or prospect.
- How much that solution costs.
Of course, when it comes down to it, a business proposal is only really viable if it is cost effective and profit making. As a result, it is essential to include all figures that you have that help support your proposal.
Such figures include any sales forecasts, balance sheets and cost savings that will transpire from doing business with you. These figures need to be as compelling as possible as they will be the final part of the puzzle that can help sell your proposal.
Be sure therefore that you explain anything that may appear negative, while really promoting the overall financial benefit of a business arrangement with your company.
Business proposals - overall takeaways
If you are serious about your business and its growth, finessing how to write a business proposal is crucial. Without doing so, it will make it that much harder for you to enter into profitable business dealings with other companies that could really harness what your own business is offering. Using a template or working from cooperation agreements or sales contracts can really help hone your craft and keep your writing tight and to the point.
Overall, remember that business proposals need to sell why you and your company are worthwhile doing business with. You need to be factual and accurate, but now is not the time to be modest either.