Learn how to write a business proposal with our comprehensive guide, including essential elements, practical tips, and a step-by-step process. The business world is hyper-competitive, and seizing the next big thing hinges on one crucial document: a business proposal. A vessel for your company’s promise and potential, this tool attracts new leads, accelerates growth for your start-up team, and helps you land exciting new opportunities. Below, we’ll teach you how to write a business proposal in eight simple steps. From the different types of proposals and their purposes to their must-have components and best practices, we’ll equip you with the know-how you need to structure your own. Prepare to captivate clients with help from these actionable insights and practical tips.
What is a business proposal? ✏️
At its core, a business proposal is a persuasive document. It establishes a business arrangement between two parties, typically in a business-to-business (B2B) scenario. It outlines your company’s offerings to a prospective client or partner and details how you can meet their needs or solve problems.
A business proposal often focuses on a specific project and shouldn’t be confused with a business plan, project plan, or project roadmap, which outlines a business’s overall strategy, operations, and goals.
There are a few reasons why companies write letters of proposal:
- Attracting new clients: Writing a proposal attracts new clients by showcasing your ability to address their needs.
- Securing funding: Businesses often write proposals to potential investors, explaining how they’d use investment funds provided to them and the possible return on investment (ROI).
- Establishing partnerships: If a business wants to work with another company, a proposal helps outline how that relationship could be beneficial.
- Requesting changes: Large companies sometimes use business proposals to suggest policy and procedure changes or new projects.
- Responding to requests for proposals (RFPs): Companies submit business proposals in response to an RFP to demonstrate how they can provide the service or product needed.
Types of business proposals 📁
Just like other business-related documents, a business proposal is not a one-size-fits-all. Based on your type of company and client needs, you can pick and choose a business proposal. Since each proposal for work has its own purpose and characteristics, understanding these variations is essential to effectively communicate with a wide range of clients or colleagues.
Here are three business proposal examples:
Formally solicited business proposal 📒
These proposals respond to specific public requests, often an RFP, a request for quotation (RFQ), or an invitation for bid (IFB). Here, business owners must comply with the provided guidelines while articulating how to fulfill the project’s requirements. These clients frequently receive several proposals and choose the one that’s the best fit.
Informally solicited business proposal 🗒️
Less formal, these proposals aren’t written in response to official requests. Instead, they’re created to acknowledge conversations or casual meetings with vendors or potential clients. Despite lacking a formal request, this business proposal provides a comprehensive solution to the client’s needs. In this scenario, clients and vendors typically don’t receive multiple bids.
Unsolicited business proposal 🗂️
An unsolicited proposal is a proactive approach to landing jobs. Here, a business identifies a potential client’s needs and proposes a solution (without an explicit request from the client). These proposals showcase a business’s products and services, marketing to new opportunities. Because the client hasn’t explicitly requested this proposal, it must be persuasive.
Things to know before writing a business proposal 🖊️
Before fleshing out a business proposal idea, learn as much as you can about your potential client. This information provides a framework to tailor your proposal effectively, ensuring it resonates with the prospect’s needs and expectations.
Here are four key questions to ask:
- What’s the prospect’s requirement or problem? Understanding the prospect’s problem or need, which your business intends to address, is vital. This allows you to tailor your proposal’s solutions and benefits directly to the client’s circumstances.
- Who are the decision-makers? Learning who holds the ultimate power within the potential client’s organization helps you customize the proposal’s tone and content.
- What’s the budget? Knowing how much your potential client is willing to spend helps you create a realistic proposal matching their resources. A client’s budget (or lack thereof) may also impact their ability to pay you promptly.
- Who are the contenders? Knowing who you’re competing against helps you appropriately highlight your unique selling proposition (USP), differentiate your solution, and explain why your business is the best choice.
How to write a business proposal step by step💻
Writing a business proposal requires following a series of essential steps. These steps build on one another, creating a compelling narrative that convinces prospective clients to hire your business. If you feel stuck, review business proposal templates online to find a free template. You can rely on a program like Canva to create visuals for your proposal.
Follow these steps to write a job proposal:
- Do your research and create an outline: Consider the potential client’s needs and how to meet them. Next, chart your business proposal’s structure, including an executive summary, project details, deliverables, budget, and conclusion.
- Include a title page: Brainstorm an interesting, unique title that captures the essence of your proposal. And don’t forget to add a table of contents, helping the opposite party take a glimpse of your comprehensive file.
- Add a compelling summary: Similar to a cover letter, an executive summary is a snapshot of your proposal, highlighting the problem statement, your solution, and the expected benefits for the potential client.
- Outline the project scope: Next, elaborate on the pain point, your proposed solution, your value proposition, and your qualifications. Clients are the happiest when they see a realistic, attainable solution to their problems.
- Clearly mention the details: Explain the specific outcomes (deliverables), project timeline, key project stages (milestones), and a transparent breakdown of pricing. Give an overview of every process step, and always keep it professional. Remember, the tone should align with your client’s voice.
- Add a conclusion and appendix: Summarize your proposal's key points, and add a robust call-to-action (CTA) and your contact information. Add an appendix with supporting documents like reference materials, case studies, methodologies, social proof, and testimonials if desired.
- Edit the proposal: Thoroughly review the submission to refine the language, correct any errors or typos, and highlight the important points. A professional presentation is key.
- Make the final changes: Before sending it off (PandaDoc is a great option), have a friend or colleague review the proposal for clarity, coherence, and persuasiveness, and use their feedback to make any last revisions.
Tips for a winning business proposal 🏆
A winning business pitch requires an in-depth understanding of the client’s needs, clear communication, and strategic positioning. Create persuasive, engaging documents with these four tips:
- Understand your client: Before you start creating the proposal, ensure you thoroughly research the client’s industry, business, challenges, and goals. The more you understand their needs, the better.
- Include your USP: A primary goal of a business proposal is demonstrating how your product or service will solve the client’s problem. Why are you different from your competitors? That one (or more) differentiator could persuade the client to make the final decision in your favor.
- Be precise and concise: Your business proposal should be clear and to the point. Skip the jargon, and add bullet points, infographics, and headings.
- Proofread and edit: Only send your business proposal out after reviewing it for mistakes. A polished proposal enhances your trustworthiness and credibility, so don't let a typo slip past.
Following up on a business proposal is just as critical as writing it. Here are a few tips for after you’ve sent it out:
- Don’t wait too long: Follow up a few days after sending your proposal. Confirm receipt, and ask if they have any questions, but don’t be too pushy.
- Keep it professional: Maintain a professional, appreciative tone in your follow-up, and let clients know you’re available to discuss their needs.
- Be open to feedback: If the client declines your proposal, request feedback to understand how to improve.
Hire Independents on Contra 🤩
In the high-stakes small business world, mastering the art of crafting persuasive business proposals is vital. With knowledge of the proposal types, the writing process, and essential tips for creating and following up on a winning document, you’re now equipped to land new business.
If you require specialized expertise, the commission-free Contra platform is for you. Join Contra today and tap into our network of top Independents who are ready and waiting to help you create deliverables for your company. It’s time to transform your business with the help and services of a freelancer.