What is a business proposal?
A business proposal is a document that is used to secure work. A document that is officially used to pursue an organisation(sometimes even an individual) to buy a product or service.
A business proposal is either solicited or unsolicited, that is, the purchasing company is either actively seeking a proposal that meets a specific need or is responding to an offer, often from a salesperson to consider a business proposal.
Let’s get a clearer view of it-
The solicited proposal comes with a description of what the client or buyer wants, the client has requested the business proposal- so it comes with formatting instructions and the criteria that will be used to make a selection.
But when it comes to an unsolicited business proposal- these are sent to the clients who have not requested them, more like an offer. Unsolicited business proposals are submitted on the proposer’s own initiative.
Keep in mind, the difference between Solicited and Unsolicited Business Proposal is something that you always need to remember while crafting a Business Proposal.
Let’s take a look
First, it is important to be clear about what a business proposal consists of, Solicited or Unsolicited-
- Title or Cover Page
- Table of Contents(Optional but useful for longer proposals)
- Executive Summary
- Acknowledgement of the Problem
- Proposed Solution/Outline of approach
- Company Information
- Case studies and/or testimonials(recommended)
- Terms and Conditions
- CTA/How to proceed
Keep in mind that a Business Proposal is not a Business Plan. A business plan is all about you- the document would provide details about your company’s strategy and demonstrates how you intend to grow. A business proposal, on the other hand, is all about your client- it is a document designed to sell your service(s) to someone else(your client)
A business proposal hence should focus on how you intend to meet the client’s needs and how you can help them out and provide value to their business. While you certainly can use some information about your company to pursue the client to buy your services, the focus of the proposal is your client, not you.
Solicited Business Proposal
The customer has a need and the proposal is sent as a response to the need.
Here are the three types of business proposals you need to know about-
1) Invitation For Bid(IBF)
This is a competitive process for awarding contracts. The customer knows the products and services they want to purchase- they are very clear about the scope of work they require and what is expected to be delivered.
In this situation, potential service providers differ principally on price and financial viability of what you are offering. A business also has to show that it can handle the required task- the client will then delve further into your organisational capability, resources, sustainability principles and value addition.
2) Request For Proposal(RFP)
In this case, the customer does not know the solution they want. This prompts the buyer to approach the market for a solution-oriented approach to service(s) and product delivery. It is your responsibility to develop them and provide a cost estimate.
The proposal you submit will include the details of your solution, your plan and other such information to portray your capability to complete the contract. Here, the scope is more valuable and the business submitting the RFP has more flexibility.
3) Request For Quote
Here, the customer intends to find the best pricing of the product or services they are seeking. This is mainly used to determine the prevailing market rates.
Unsolicited Business Proposal
In the case of an unsolicited business proposal, your goal is to introduce the product to the client. Here, it is not the client that has requested for the product/service, it is you who has to pursue the client and convince them that they should be using your product/service.
The client is not anticipating the proposal and no budget has been set aside.
Unsolicited business proposals are circulated targeted email marketing, brochures, leaflets and even fliers. But a business just can’t promote its product, you need to consider a customer’s specific needs, concerns and environment.
Unsolicited business proposals are free from competitive pressure- you can take advantage of this to improve your company’s visibility in the market and widen your client base.
But before you make your submission, you need to make sure that your customer accepts unsolicited business proposals. Some companies accept unsolicited proposals and review them throughout the year.
Now that you know what is a solicited business proposal and what is an unsolicited business proposal, here are the crucial steps to write a compelling business proposal
How to write a business proposal in 6 steps.
Step #1:Gather Up Information
You will need details about the targeted client and the first thing you are supposed to do is to gather up all the information you need to form your business proposal.
You don’t want to spend your time putting together a proposal only to later realise that you have missed a detail- so you need to be meticulous.
You can speak to the client beforehand to gain all the necessary details- this will be exceptionally good in case you are preparing a solicited business proposal. But you also need to make sure that you fully understand the requirement. You have to make sure that you know exactly what your client wants and needs and what is being expected from your company.
Step #2: Sketch Out the Scope of the Project
Once you have all the information, you should have everything you need to outline the scope of the project. The scope of a project refers to the amount of work that is needed to be completed.
You should understand what work is to be put into the proposal, you can note down the various tasks to be completed along with the resources you will need. You should also take into consideration the amount of time the project needs and take in the net cost into account.
Step #3: Estimate the Cost
That is very important- to estimate the net cost, try pricing the job once you’ve decided on the scope. The best way is to first estimate how much it is going to cost your company to do all the work. That would decide how much you are supposed to charge. But make sure your pricing is reasonable, your company is not the only option your client has after all.
Step #4: Start Writing
The planning is done, time to act on it. Start writing the business proposal- as simple as that. We already have discussed the content above- you can check that out and simply start with the work.
As intimidating the first step seems- it is a cakewalk if you make sure that you have everything you need and you put the necessary information into the proposal.
The design is important for a business proposal and you don’t want to put off the client- work on it, the appearance matters and your company is going to be judged by them. Poorly formatted proposals can be unappealing, confusing and hard to read and you might lose your client even before you have them.
Try putting up a catchy title but let it not be too funky- sticking to the standard way of writing the title yet being witty enough does the trick.
Add your company’s name and contact information, your client’s name, the name of the person you are submitting this to, the date of submission and some useful reference number- that will do
Having an introduction or cover letter will be very useful, it would provide the client with a detailed view of your business and workings.
It is more about selling than summarising. While you want to summerise your proposal, your main goal is not to just give an overview of the project but rather to highlight why your proposal is the best suited for them.
A good executive summary needs to be persuasive and benefit focussed. You need to press more on persuasion than the description- in a subtle and if possible, fun way, so start with something that grabs their attention and make them want to keep reading.
So choose your words wisely.
Table of Content(optional)
This depends on the length of the proposal and as mentioned, it is not a necessity, but in case your proposal is lengthy, it is advisable to have a table of content.
This section will make up the majority of your proposal-
-The approach and solution
-About the company
-Clients and references
-Terms and Conditions
Step #5: Edit and Proofread
Finally, when you have the draft of the proposal- it’s the time to edit and proof-read. You would not want to lose your client over simple grammatical mistakes and we all make mistakes, you could have missed something, or maybe some words need to be taken out?
There is so much scope for mistakes and in today’s business world, perfection is almost a commodity.
Step #6: Send Your Proposal
That’s it, you have edited the proposal- time to send it to the client and you are done- If you have an RFP, make sure you read and follow the instructions on how to submit your proposal. Some companies even use submission guidelines to test your diligence, adhere to the company guidelines, that will help.
And finally, follow up, they might have several proposals in line- so it can take some time, be patient and once you have sent your proposal, drop an email or give them a quick call and make sure that they know that you are available to answer any question that they may have regarding the proposal.
That is all you require for a compelling business proposal and the rest is how you handle competition and your clients.
Read More: Vervelogic