Business Proposal: Definitive Guide

Creating a compelling business proposal is essential if you want to win new customers and establish fruitful partnerships. Whether you're a startup seeking investors, a freelancer pitching to a client, or an established business looking to expand, a well-crafted proposal can make all the difference. I have been helping my clients write winning business proposals to gain more value and investments.

This guide is kind of like a summary of how I write a business proposal for my clients.

In this comprehensive guide, I will walk you through the steps to writing a successful business proposal, covering everything from understanding your audience to polishing the final draft. Before we begin, let’s understand what a business proposal is.

Introduction to Business Proposals

A business proposal is a formal document that outlines your business idea, the problem it addresses, your proposed solution, and the benefits to the client or investor. It is a crucial tool in the business world, serving as a means to persuade the reader to take a specific action, such as investing in your business, partnering with you, or purchasing your product or service. Therefore, your business proposal must also adequately explain how you will provide a solution, its cost, and qualifying information such as your background and prior work experience.

There are two primary types of business proposals:

1. Solicited proposals

A client or investor requests these through a Request for Proposal (RFP).

The RFP outlines the client's needs, and your proposal should address these requirements in detail.

2. Unsolicited proposals

Such proposals are not requested but are sent out by businesses to potential clients or investors in the hope of generating interest. Needless to say, they must be particularly compelling to grab the reader's attention.

Regardless of the type, a business proposal should be clear, concise, and persuasive, providing all the necessary information for the reader to make an informed decision.

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The Process of Writing a Business Proposal

Now, let us look closely at the actual process of writing an effective business proposal.

Ascertain Sales Proposal Requirements

First of all, you must know what to include in your business proposal. For example, most public universities, government agencies, and large corporations typically use requests for proposals (RFPs) – formal solicitation requests for products or services wherein the requirements are meticulously laid out and precisely followed.

While writing a proposal for a potential customer, you should add useful details such as timelines, pricing, and the proposed solution regarding quantities and the mode of product or service delivery.

Understand Your Audience

Understanding your audience involves researching your client or investor's needs, preferences, and challenges. The more you know about your audience, the better you can tailor your proposal to meet their specific requirements. Therefore, you must gather information about your client or investor's business, industry, and market position.

After that, identify the specific needs and challenges that your proposal aims to address. Understand who the decision-makers are and what criteria they use to evaluate proposals. By doing so, you can address their concerns and highlight the most relevant benefits of your proposal.

Tailor Your Proposal

Once you have a clear understanding of your audience, you need to tailor your proposal to their needs and preferences. Always try to use language and terminology that resonates with them, and focus on the benefits that are most important to them. Such personalization demonstrates that you have taken the time to understand their business and are genuinely interested in helping them succeed.

Calculate Pricing

Formulating the costs to mention in your proposal’s pricing section can be rather tricky due to the various factors you must consider, such as product cost and other expenses. Therefore, you must accurately communicate those details to avoid losing a deal for overcharging or, even worse, winning a deal with underestimated costs. After pricing everything, you can do a per-unit charge, hourly rate, flat fee, or even a combination of the three. 

Draft Your Business Proposal

After completing the previous steps, you are ready to draft your business proposal. A well-structured business proposal is easier to read and more likely to persuade the reader. While the exact structure may vary depending on the type of proposal and industry, most business proposals include the following sections:

1. Title page: The title page should include the proposal title, your company's name, the client's or investor's name, and the date. It should be professional and visually appealing.
2. Table of contents: A table of contents helps the reader navigate the document easily. It should list all the sections and subsections with corresponding page numbers.
3. Executive summary: The executive summary is a brief overview of the proposal. It should summarize the key points, including the problem, your proposed solution, and the benefits. This section should be concise and compelling, as it is often the first part the reader will see.
4. Introduction: The introduction provides background information about your company and the purpose of the proposal. It should set the stage for the rest of the document and establish your credibility.
5. Problem statement: Here, you should clearly articulate the problem or need that your proposal addresses. Provide evidence and data to support your claims and demonstrate the significance of the problem.
6. Proposed solution: In this section, you must describe your proposed solution in detail. Explain how it addresses the problem and outline the steps you will take to implement it. Include any relevant technical specifications, timelines, and resources required.
7. Benefits: Highlight the benefits of your proposed solution and focus on the value it will bring to the client or investor, such as cost savings, increased efficiency, or improved outcomes.
8. Implementation plan: This section should demonstrate that you have a clear and feasible plan for executing the project. You should provide a detailed plan for implementing the solution and include timelines, milestones, and responsibilities. 
9. Budget and financial projections: Here, you must outline the costs associated with the project and provide financial projections. Always remember to be transparent about pricing and justify your costs with detailed explanations.
10. Conclusion: Finally, you should summarize the key points of the proposal and reiterate the benefits. Don’t forget to end with a strong call to action, encouraging the reader to take the next steps.
11. Appendices: You can include any additional information that supports your proposal, such as resumes, case studies, references, or detailed data. This section should be well-organized and easy to navigate.

Proofread and Edit Your Draft

After completing the first draft of your proposal, you must run it by various departments to ensure it is accurate and comprehensive. Some important things you must consider while reviewing it for potential revisions are:

• Readability: Your proposal must use an appropriate tone, style, and structured sentences to create a clean flow of information that your reader can easily understand. You can use short paragraphs, bullet points, and visuals to organize the text better and improve readability.
• Grammatical and technical errors: The proposal must avoid spelling, punctuation, and other errors related to proper writing mechanics.
• Addressing requirements: It is crucial for the proposal to contain all the information and sections needed to meet your reader’s objectives and requirements.

I advise you to use editing tools like ProWriting Aid and Grammarly to improve the quality of your business proposal writing.

Also, you should ensure that your proposal looks professional and polished by using a high-quality layout, a professional font, and consistent formatting.

If you’re going to submit a physical copy, don’t forget to bind or package the proposal professionally using a binder, folder, or other professional packaging.

Send Your Proposal

Now that you’ve drafted and edited your proposal and ensured that it has all the aesthetics it needs, you can send it for review. You may have to submit more formal submissions for RFPs in person, electronically, or both, so remember to review everything carefully before sending them in.

Also, some sales plans offer unsolicited proposals to new leads to current problems they didn’t know existed. In such cases, they use the proposal to create eleventh-hour sales opportunities. If you opt to do this, you must add context to the unsolicited proposal, explain why you specifically wanted to send a proposal to them and inform them that they can contact you if they want to discuss it further.

Follow Up with Your Recipient

After sending your proposal, you must put in effort to follow up and confirm that your contact received the proposal. Ask them if they have any questions regarding the same. Due to the proposals’ details, the procurement process generally has other clarification steps such as client meetings, interviews, or sales presentations before the work actually begins.

You can also try using a customer relationship management (CRM) system with task management capabilities to ensure that sales reps remember to reach out to a prospect after the proposal is initially sent out. Using a CRM such as Hubspot, Pipedrive, ZohoCRM etc., you can design and assign tasks to your team members from within a project and create projects linked to open or won deals.

Best Practices in Writing Sales Proposals

We’ve now discussed the entire process of writing a business proposal in detail. Let’s now look at a few handy tips to produce effective and prudent proposals.

Maintain Simplicity

When creating your proposal, try to write short and simple sentences. Make sure it is straightforward, easy to understand, and not overloaded with business jargon or fancy words.

Outline Major Sections and Crucial Information

It is crucial to outline all the major sections of your business proposal, including all the necessary information that you need to convey. Doing so will enable you to concentrate on the main points of the document and prevent your ideas from drifting away.

Add Data and Graphics

You can effectively hold the reader’s attention by including quantitative data and figures highlighting your offerings and your company’s value. For example, you can display your monthly sales trends as evidence of your exceptional performance. Similarly, you can make your proposal more striking by adding visual elements such as charts and graphs.

Use Social Proof to Increase Credibility

A lot of potential customers won’t easily believe your claims about your business. Instead, they’ll likely listen to their own peers and other customers. Therefore, you must assert your credibility and gain their trust by adding social proof such as testimonials and reviews from your own customers.

Use a Call-To-Action (CTA)

Once the prospect has read your proposal, you should use a call-to-action (CTA) with a verb that indicates what they must do to benefit from your proposal. Some examples of CTAs include “Sign up for free” or “Buy now for 40% off”. As seen in the latter example, you can also create a sense of urgency to make your prospect feel that it is best to subscribe to your service right away. 

Stay True to Your Brand

By staying true to your business brand, you will be able to stand out among your competitors. For example, if your company sells trendy clothes for young people, you should use language that your potential customers can relate to, such as “elegance in style” or “fashion for every mood.” Likewise, companies selling office attire must use a more formal tone of voice in their proposals.

Conclusion

Writing a successful business proposal is a critical skill for any business professional. The steps I’ve described in this article will help create a compelling document that persuades the reader to take action. You must remember to tailor it to the specific needs and preferences of your audience, and to polish the final draft to ensure it is clear, concise, and professional. With these tips, you can put together an effective business proposal that stands out and helps you achieve your business goals.