How to Write a Business Proposal

How to Write a Business Proposal

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. So, how do you write a business proposal? What is the proper format? What do you need to include?.

While it depends on your industry and whether you’re offering a product or service, writing a business proposal is straightforward. We’ll answer all those questions throughout this guide.

What to Expect with this Business Proposal Guide

Whether you’re starting fresh or need to look at a specific section, here’s what we’ll cover in this guide.

You can download a free business proposal template here to start writing up your own proposal as you work through this article. By the end, you’ll be prepared to develop a well-written business proposal that can explain your business clearly and win more clients. Let’s get started.

What is a Business Proposal?

A business proposal is a document you’d send to a prospective client, outlining the service you’re offering and explaining why you’re the best person for the job. It’s a pitch by a business or individual to complete a specific job or project, supply a service, or be the vendor of a certain product.

What are the Different Types of Business Proposals?

A business proposal can be either solicited or unsolicited. With a solicited proposal, the prospective client will put out a request for proposals. With an unsolicited business proposal, you are approaching a client in hopes of attracting their business, even though they did not explicitly request a proposal.

While both are commonplace, a solicited proposal is an easier sell, as your prospective client has already decided that they want to make a purchase or use a service and they’re evaluating possible vendors or businesses.

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Your prospective client might have issued an RFP, or “request for proposal.” This is exactly what it sounds like—they want you to send over a business proposal so they can take a look at it.

Differences between a Business Proposal and a Business Plan

A business proposal is not the same as a business plan. While there are areas of overlap (like your executive summary), the two are different.

That being said, you can pull information from your business plan while writing your business proposal. But don’t confuse the two; they are distinct and separate. A business plan represents the cohesive strategy of how your business operates and makes money. A business proposal is an official pitch to clients selling your products or services.

A business proposal outlines a particular product or service offered by an established business to a prospective client.

You’re trying to sell your prospective client on your product or service, not on your business itself. You’re not after funding, as you are with a business plan; you’re trying to make a sale.

A business proposal is also not an estimate; although you’ll likely touch on costs and pricing in your business proposal, an estimate is much more informal and just a quick look at the costs, not the whole picture.

What Goes into a Business Proposal?

Your business proposal should address the three Ps:

  • Problem statement: What your customer’s current problem is
  • Proposed solution: How your business solves that problem better than other solutions
  • Pricing: How much that solution costs compared to alternatives

If you’re stuck on how to start, maybe try brainstorming first; start with these three points, and you’ll have a rough, bare-bones version of your business proposal.

How to Write a Business Proposal

Once you’ve done that, if you’re ready to go more in-depth, here is a step-by-step look at how to format your business proposal.

Title Page

Your business proposal should start with a title page, including your name, the name of your company, the name of the person to whom you’re submitting your proposal, and the date submitted.

Table of Contents

Depending on how long your business proposal is, a table of contents is a nice touch. Include it after your title page, and before you launch into any details. If you’re delivering it as a PDF, include anchor links down to each section, so it’s easy to get to specific areas.

Executive Summary

Introduce your proposal with a great executive summary, one that really sells your business and the products or services you provide—it’s about why you’re the right company for the job. You can draw from your business plan’s executive summary here, too.

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Statement of Problem, Issue, or Job at Hand

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. But be sure you understand why they want the product or service they’re seeking. If the proposal is for developing a brand new website, make sure you understand what they want to get out of the site—better sales, more content management flexibility.

Show your new client that you understand their needs, and fully grasp the issue they are trying to solve. Restate the issue they are facing in your own words so that they know you understand what they are looking for.

Approach and Methodology

This section shows how you plan to tackle your potential client’s problem and the steps you’ll take to carry out your plan.

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 careful of going into too much detail, though—keep the jargon to a minimum. Your client should be able to follow along and get a clear sense of your plan, but you don’t want to drown them in minutiae.

Qualifications

Go ahead, brag a little—this is the section where you get to convince your potential client why you are the most qualified person to take on the job.

Mention any relevant education, industry-specific training, certifications, successful projects of a similar nature, years of experience, and so on.

Schedule and Benchmarks

Be clear with your potential client: How long will your proposed project take?

Make sure you and your prospective client are on the same page from the outset. This will help ensure that the relationship stays positive for both of you and that you don’t set your client up with unrealistic expectations.

While you might be tempted to underestimate how long it will take you to complete the project, don’t. Don’t promise what you can’t deliver!

If you’re offering a product, this section might not be applicable to you, so feel free to omit it. Tailor the business proposal format to suit your business and industry.

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Cost, Payment, and any Legal Matters

State the cost and payment schedule, if necessary.

How you structure this section will largely depend on the project or service you are offering. A section entitled “Fee Summary” may be sufficient if one-time payment is required; otherwise, a “Fee Schedule” list or pricing table might be more appropriate. 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.

If there are any legal issues to attend to, such as permits or licensing, include this information here. Add a section devoted to handling the legal side of the project if need be.

Benefits

This is your final sell—detail for your prospective client all they have to gain by choosing you to complete the project.

Impress upon your clients why you are the best choice and all the ways in which their business will benefit from choosing you and your business as their solution.

How Long Should a Business Proposal Be?

When it comes to the format of a business proposal, this is the million-dollar question without an answer. Remember asking your teacher how long an essay should be, and they’d reply, “as long as it takes to answer the question.”

The same applies to your business proposal. It ultimately depends on your industry, the project scope, and the client’s specifications in terms of detail and elements included.

The tighter your initial proposal can be and the more directly you can make your point, the easier it will be to pitch it to clients. Start by following the business proposal format above as a guide, and you’ll be well on your way to creating a winning business proposal and securing new clients.

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