Firstly, a business proposal may be required for either of these two purposes:
• To convince a prospective investor why your business idea needs the funding you are seeking. And in some cases what they stand to gain if they invest in your idea.
• To convince a company/organization/individual to award a contract to you.
As the name implies, the word proposal is from the word ‘propose’ which means to present something for consideration or examination. It is therefore a formal presentation of facts and figures relative to the context of business discussion (investor or client). And the aim of every proposal is to convince the recipient to choose you, sometimes out of other available applicants.
People often ask me whether there is a difference between a business plan and a business proposal. I would say the two mutually exist. Because a business proposal (whether to an investor or prospective client) is a presentation of a plan in itself and often than not, it contains certain elements also present in a properly written business plan.
Hence they are similar, but a sharp contrast is the fact that a business plan is most likely your own personal document detailing how you as an entrepreneur intend to run a business with the aim of achieving certain business goals. While on the other hand, you write a business proposal with the goal of convincing a second party about your business plan.
In any case, you need to firstly have a clearly written business plan before drafting a business proposal, especially if your business proposal is intended for an investor. As an entrepreneur, proposal writing is one of the numerous skills you must possess.
WHAT TO INCLUDE IN A BUSINESS PROPOSAL
Firstly, please note that this article is not the standard for every fund request. This guide is best used when writing to individuals or some certain organizations. In other cases, some organizations will release a guide as to what they want you to include in your business proposal.
Having said that, when sending out a business proposal for funds, you will need a detailed copy of your business plan attached to what is commonly called a funding request. See it this way, it’s like you are applying for a job; the business plan is your curriculum vitae, while the funding request is your cover letter.
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The funding request must contain the following:
• Business Outline
This is a summary of the core details of your business plan. More of what you have in the executive summary section of your business plan goes here. Ensure you make reference to the fact that your business plan contains express details of what you have summarized here.
• Current financial situation of your business.
• How much money you need now and later for the business to run smoothly and profitably.
• How the money will be used.
• Your current and future financial plan.
For instance if it’s a loan you want to explain how it will be raised and paid back by the business. If it’s not a loan you still need to explain how you intend to use the money to keep growing your business.
Note: The use of bullet points is to identify the important details. The list should not be numbered in your funding request. However, you will have to creatively outline each subject in separate paragraphs for clarity.
WHEN WRITING TO SEEK FOR A BUSINESS/CONTRACT
This type of business proposal is slightly different from when writing to seek for funds. Here, no one needs your business plan (in the sense of the usual business plan) even though you are still required to outline your plan on how your competence and experience will be harnessed to deliver the project.
Writing this type of business proposal requires that you show a very deep understanding of the potential client’s problem, as well as your credentials in handling such issues as a way of pitching your company as the best choice for the project.
The first thing to do before writing this kind of proposal is to carryout a thorough research on your prospective client; find out their history, reputation, their products/services, their organogram/company hierarchy, and their current challenges/needs. You may also need to carry out a little research on your competitors so you understand their background, their pedigree and what they are offering. That way you can come up with a robust proposal, one that answers relevant questions in the minds of your client and also shows you have done your homework.
COMPONENT OF THIS PROPOSAL
This page contains the title of the document, information about your company like name, address, contact details (which may include telephone nos, email, website, social media handles), and if your company is registered it might not be a bad idea to showcase that detail on this page.
Remember, while writing the other proposal I said your funding request is like your cover letter while your business plan is your curriculum vitae, but here, this type of proposal doesn’t need your business plan, so your cover letter comes to play. It must begin on a fresh page on its own and must give a brief introduction of your company, how long it’s been in existence. If you have worked with big brand before, this is where to subtly brag about that.
Here your goal is to delve into the problem or project being discussed while also stressing your company’s service/products that readily solves the problem.
This is the heart of the business proposal. Here you want to finally make your presentation on how you intend to handle the project/contract. Highlight the solution you are offering to the client’s problem/challenges. Be clear and convincing enough that you are fit for the job.
Your proposal must have highlighted what you want to do, so here, you will highlight the methods you intend to use and the results to expect step by step. Be as detailed as possible.
Time to throw a brag party; ensure you brag about similar jobs you have handled, if possible highlight the results you got. However, make sure the ones you cite are verifiable. Some clients will go as far as verifying your claims and you don’t want to be found untruthful. Also when making reference to past jobs, ensure you stay within the limits agreed with your former employer on privacy and agreements.
Here, state expressly how much it will cost you to execute the job, your fees, etc. Make sure you talk about every financial details of the job because outside this document, every other discussion about money is invalid. If it’s products, specify quantity and prices.
Beware of underquoting what’s needed to execute the project as this may mean a huge loss for you as a business.
T&C, & AGREEMENT
Never jump off your proposal without spelling out the terms and conditions of the contract. State expressly what the duties and responsibilities of both parties will be, the duration of the project, how you expect funds to be released, etc. Make sure you think this through before sending out your proposal because once the contract is signed, any error or omission on your path will bounce back on you and in some cases may result in a lawsuit.
At the end of the terms and conditions, there would be a statement of agreement where you invite your client to append their signature if they approve every details of the proposal or ask them to reach out where clarification is needed.
There, you have your business proposal ready for dispatch.
ABC of a good business proposal is an excerpt from my e-book titled “Mini Business Plan & Proposal Writing Guide.
I do hope this guide gets you some accolades, contracts and funding, whatever your use of it is.
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If you also desire to write a business plan like a pro without having to pay heavily to get one, do get a copy of my Mini Business Plan & Proposal Writing Guide, also hosted on Kobocourse.com or use this link https://bit.ly/3bHE0qh