Business Proposal

What Is a Business Proposal?

Human beings, despite their differences in location, gender, preferences, and languages, have familiar and particular needs and desires. From ingredients in meals to celebrities starring in movies, everyone has their favorites and inclinations. Like how ordinary people choose specific things over another, businesses also tend to prefer one material from a list of items. For entrepreneurs who own a growing corporation, it is crucial to stand out among thousands of competitors. Additionally, having a varied number of clients can boost the reputation of companies.

To pitch the products and services, business owners and planners need to have proposals. A business proposal has three components and uses for the convenience of business folks. It has a professional introduction, an outline of the sales pitch, and a formal conclusion. Furthermore, the material is used for a possible partnership, specific project collaborations, and branding. In the simplest terms, business proposals help companies find suitable enterprises that accept their services and products. Moreover, it is an excellent way to have an alliance for future business ventures.

According to the Small Business Statistics article provided by the Chamber of Commerce in 2018, over 30.2 million small enterprises are active in the US

The United States Small Business Administration Office Advocacy reports that in the 2019 Small Business Profile, The United States had 30.7 million small businesses.

According to the same report, the small business industry employs 47.3 percent of the private workforce. 

business-proposal

The Proposition: Four Types of Business Proposal

The concept of business proposals centers on a purposeful partnership between two different companies. As both entities benefit from the proposal, the usefulness of the material plays an important role in pushing both corporations forward. For instance, we take a look at how music streaming app Spotify and its partnerships with other businesses, have been positive over the years. The application, which contains almost all genres and songs ever created in the music industry, has millions of listeners worldwide. Going into collaborations with Uber (2014) and Starbucks (2015) has brought the company farther by garnering more audiences and reaching better relationships. On the other hand, partner enterprises enjoy the liberty of mixing music for the convenience of their customers. Business proposals can improve many aspects of the company. So, what are the types of business proposals?

Solicited Proposals: A company that needs goods or services from another business asks for the submission of proposals. In solicited proposals, the buyer sends out letters with requirements to qualified manufacturers or providers. Then, the company submits the proposals to the client. Solicited proposals can be RFP (Request for Proposal), IFB (Invitation for Bid), RFQ (Request for Quotation), and RFI (Request for Information). After meetings, presentations, and plans, both businesses can continue with the proposed partnership.Informally Solicited Proposals: Sometimes, companies are unaware of their professional business needs until having a conversation with a provider. An informally solicited proposal happens when an unexpected dialogue turns into a fruitful business plan. Upon reaching an agreement, they can continue the arrangements through more appointments. Whether it’s a construction project or a temporary program plan, if both parties receive benefits, then it works.Unsolicited Proposals: In this setting, the manufacturer conducts a survey to determine the number of companies that would require the retailer’s services or products. The business would try to sell the products by presenting the advantages and benefits of choosing them as the service provider—through email, meetings, and brochures. The responsibility of figuring out the needs and maintaining the partnership falls under the retailer. The chosen enterprise can either accept or reject the proposal of the service provider.Grants: Unlike the other proposals, grants focus on providing sufficient funding for specific innovative goals. In most cases, these people send proposals to private companies hoping that they would consider the drafts and plans of the individuals. Government agencies can also give grants to appropriate projects and the right people. The benefactor who provides grants to the selected personalities (or groups) wants to see useful results from their investment.

Essential Points in a Business Proposal

Many individuals aspire to be entrepreneurs in the future. Some are close to their dreams, while others are still starting their journey to success. To reach greater heights, people have to try different methods to find an approach that fits well with the current situation. According to the small business statistics article provided by the Chamber of Commerce in 2018, over 30.2 million small enterprises are active in the US. The numbers show how people see business ventures as an opportunity to grow. Several business owners are young, and some are older than usual. But it does not stop them from trying to open a store or boutique. Therefore, here are key points that will help entrepreneurs when making their business proposals.

Executive Summary

In simple terms, this part contains the overall summary of the essential discussion points in the business proposal. This portion has crucial information that provides enough details to push the reader to move along. The executive summary, as a whole, invites the prospective client to continue browsing the document. After the table of contents, this section of the proposal appears to provide an overview for the viewers.

Scope of the Deal or Proposal

The company should allocate enough pages and paragraphs to provide enough information about the range of the deal. But why is it an essential point? By giving valuable details and comprehensive background information, you can assure the clients that their investments are safe. Instead of leaving the possible business partner in the dark, you include sufficient details to guarantee returns on the said investment. The scope of the deal comprises drafts of schedules, contingency plans, plausible amendments, and marketing plans.

Methodology or Approaches in Business

For this section, the focus will be on how the two parties can proceed with the agreement if they accept the proposal. The methodology considers the situations of the parties involved and identifies what approaches can ease tensions or avoid problems with the plans. This part of the business proposal looks ahead in the future to make sure that the future collaborator can feel secure with the partnership. All possible and practical methods are considered in this section.

Terms and Conditions

Similar to agreements and contracts, proposals also include terms and conditions that affect the decisions of both parties. By listing down the predetermined conditions for the projects and plan, the two entities can refrain from doing activities or actions which could negatively affect the situation. Moreover, this protects the respective assets of the two companies. Although this is already part of the proposal, this is open for revisions, especially if some components can have better phrases and deals.

Appendix

Despite being considered as an optional section for a business proposal, an appendix has a particular purpose which can affect the decision of prospective clients or partners. The appendix holds the compilation of different documents that are relevant to the proposal but not stated in the table of contents. Some examples are application forms, complete cost estimation reports, and verification letters. If the useful material cannot fit in the proposal, it can be placed in the appendix.

How to Make a Comprehensive Business Proposal?

Entrepreneurs want to make a pretty good first impression when it comes to meeting potential clients and partners. On many occasions, the first situations where businesses interact can be the set appointments or the initial document sent for business dealings. Hence, the business owner should ensure the reliability of the material he or she will send to the customer or company when the chosen one is the latter option. Thinking about this, how do we create a professional and informative business proposal?

Step 1: Discuss the Business Objectives and Opportunities

When making the business proposal, the first step is to list down the objectives and opportunities of the potential business partnership. While this concerns you, the supplier, the receiver also needs to have adequate satisfaction from the agreement. In many cases, companies look at the statement of the problem to come up with the solution. So, discuss the goals of the two parties and enumerate the favorable results of the proposal.

Step 2: Include the Benefits

In the following paragraphs or pages, you have to go in detail about the rewards of the business proposal. By pinpointing the benefits, you can encourage the other party to consider the offers of the business. For instance, catering and coffee shops converse about the health and logistics benefits of their products. When the planner points out the positive benefits, the reader can also see it.

Step 3: Provide the Rundown of Costs

Whenever businesses make investments to projects and plans, it comes with costs and resources. So, in the business proposal, you should provide an estimation of the expenses that each party has to cover. In other circumstances, the rundown of costs is not applicable, especially when it’s a grant. However, if the proposal shows the involvement of the other company, the list of fees has to be in the final document.

Step 4: Finish with an Intriguing Conclusion

After all the necessary information, the planner should end the business proposal with an exemplary and profound conclusion. Business proposals must entice the other party to invest, purchase, or partner with the other company. Therefore, the end part of the document needs to contain crucial notes and words of encouragement. Both the introductory statements and closing points should suffice as excellent pointers for your business objectives.

FAQs

Do I need to include my resume in the business proposal?

Adding a resume in the business proposal depends on the preferences of the entrepreneur. Some business proposals contain the resume of the owner and management officers as proof of competence, while others have none. Nevertheless, resumes and reports can showcase the capabilities of the people running the business.

Can statistics and data be part of my business proposal?

At times, including research results can support claims of the business. Statistics coming from reliable sources may improve the face value of the enterprise looking for clients and collaborators. However, business owners have to certify the authenticity of the references to avoid miscalculations. Choosing unverified authors and statisticians can harm the reputation of the growing business.

What is the use of timeline schedules?

Timeline schedules will help the readers understand the focus and goals of the retailer. In the proposal, the schedules enable the purchaser or partner to determine the viability and benefits of the proposal. Additionally, it also helps identify settled dates that coincide with the plans of the other party.

Can I back out from continuing my business proposals?

The intention of business proposals has been to provide in-depth details about forecasted plans and projects. But it’s not the final agreement. In fact, it’s the earliest stage of the business dealings. Hesitant business owners and planners can back out from the venture with prior notice to the other group. If no agreement has been signed, then ending the plans is easy.

It takes a massive amount of effort, hundreds of hours, and different resources to reach the peak of success in the field of entrepreneurship. The battle may be long, but the rewards are worth it. In taking the first step to making it big in the industry, you have to arm yourself with the right tools and knowledge. Continue to learn various techniques and ideas and build your empire. Success entails challenges and failures, so do your best in the field and keep trying.