One of the biggest problems faced by a firm, an entrepreneur or a freelancer is getting clients to buy their products or services. The main problem arises when there is an abundance of sellers or firms in the market for a specific product or service. When a client has multiple options, they often try to evaluate each of them based on their qualifications and services.
In such a situation a business proposal comes in very handy. It helps firms and individuals to put their best foot forward in front of the client.
But what is a business proposal? What should you include in a proposal to persuade the client? Is it the same as a business plan? Read on to find out!
What Is A Business Proposal?
A proposal or a business proposal is a document that a firm, an entrepreneur or a freelancer puts together to make a sales pitch to a potential client and to give a brief overview of the product or service they are offering. In other words, a business proposal is a sales pitch in the form of a document where a firm or an individual persuades a prospective client to buy the respective product or service from them.
Basically, a business proposal gives a basic outline of
- What a firm or an individual can do for the client or how they can fulfil the potential’s clients needs,
- The budget they require for the same,
- The timeline to complete the respective project,
- Their approach towards the project and
- Why the customer should go for this particular firm or individual.
What Is The Objective Of A Business Proposal?
A business proposal is a very important document that helps in the conversion of a client. It creates a great impact on a prospective client and portrays responsibility as well as accountability on the firm’s part. The main objective of a business proposal is to provide the client with an outline of how the respective project would be completed and why the said firm is most suitable for doing the job. A proposal assists the client in making the decision as well as comparing various firms and individuals for the given project.
What Are The Types Of A Business Proposal?
There are essentially two types of business proposals- solicited and unsolicited.
Solicited Business Proposals
A solicited business proposal is delivered when a prospective client or business formally asks one to submit a proposal so that they can evaluate one’s services or products.
Prospective clients could either formally request a proposal or it could be an informal request. However, there are certain terms that are commonly used when a formal request is made including:
- RFP: request for proposal is a document that outlines the customers’ needs. Moreover, an RFP also indicates how the prospective client wants the information in the proposal to be structured. An RFP allows a business to learn a lot about a client and curate a proposal according to their needs.
- RFI: The request for information is used as a screening tool by the companies. In this document, the firm is just required to provide its information to a prospective client so that they can compare and analyse various firms suitable for the project.
- RFQ: A request for quotation is a document that is sent by the potential client when the price is an important factor in the decision-making process. The proposal sent in response to an RFQ majorly includes the budget outline of the project along with other information about the project.
- IFB: as is evident by the name, the invitation for bid is a document that requests bids from various firms and individuals.
Unsolicited Business Proposals
These proposals are the ones that are sent even when there is no request from the client’s side. Just like cold emails or marketing brochures, unsolicited proposals usually follow a generic approach. However, even unsolicited proposals can be personalised to suit the needs of a specific firm or individual.
The main objective of such a proposal is to introduce one’s product or service to a prospective client in the hope of persuading them.
Components Of A Business Proposal
Most proposals are client-specific and industry-specific. They focus on catering to the client’s needs more than anything else. An average business proposal usually contains 9-10 pages including a cover letter and a cover page. Firms usually try to keep their proposals short and concise so as to provide a brief overview to the client in a short amount of time. However, even if a proposal exceeds 10 pages, it should work as long as it provides added value to the client.
The main contents of a business proposal include:
- Cover letter– describes why the firm is sending the attached proposal. This page serves as the first point of contact between the firm and the client.
- Cover page- includes the proposal title and basic company information
- Executive summary- a brief summary of the whole proposal to convey the main information. The most important document of the whole proposal.
- Content table
- Overview of the problem- outlines the main problems and needs of the client. Portrays that the firm understands what the client requires.
- Approach to solving the problem- describes how the firm plans to solve the client’s problems. This document mainly includes the services or products offered by the firm and how they can help the prospective client.
- Approximate budget and costs
- Approximate deadline and schedule- a brief timeline to complete the project.
- Company information and qualifications- this part of the proposal outlines the firm’s qualifications and may even include some of the employees that will be working with the client.
Difference Between A Business Plan And A Business Proposal
A business proposal is often confused with a business plan by many people. However, the two documents are very different and serve different purposes. A business plan is a document written to provide a blueprint of a business, its goals and a roadmap of how to achieve those goals. This document serves as a roadmap for the business owners, giving them direction and clarifying the long term goals of the venture.
While the goal of a business proposal is to inform and persuade a client, the main goal of a business plan is to provide an overview of a business, its goals, aspirations and vision to prospective investors, banks, managers, employees, desired partners, and so on. A business plan provides direction to a business and sets future targets and goals while a business proposal is usually a client-specific document describing how a business could cater to the clients’ needs.
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An enthusiastic human being with determination and zeal to explore new ventures. Tanya is an entrepreneurial spirit searching for changes and learning to exploit them as opportunities and impacting people for good.