A business proposal is a key document you’ll use to win new projects. Think of it as your formal pitch to a potential client, showing them you’re the right person for the job. You can send a business proposal after a client asks for one, or you can send one to a client you’d like to work with on a project they’ve advertised.
Any business can create professional business proposals to win more work.
What is a business proposal?
A business proposal is a written sales document you send to a potential client to win a specific project. It’s much more detailed than a simple quote or estimate because it outlines not just the price, but the entire scope of your solution. It’s your chance to show a potential client that you understand their needs and have a solid plan to meet them.
While the content can change depending on the job, most business proposals include:
- The project scope: A clear breakdown of what’s included and what’s not.
- Deliverables: The specific services or products you’ll provide.
- Costs: A detailed pricing structure.
- Timelines: An outline of when the work will be completed.
Proposals are perfect for jobs that are a bit more complex. They allow you to add more detail and specific information about the project. For example, you might need to show you have the right certifications for the job. A business proposal is the perfect place to attach documents like health and safety certificates or professional qualifications.
A proposal is also more exact on pricing than an estimate. However, a business proposal isn’t legally binding until the client agrees and it becomes a contract.
What is a request for proposal (RFP)?
A request for proposal (RFP) is when a client formally asks you to submit a proposal. They might send you a detailed document outlining what they need, the scope of the project, and a deadline for submission. This usually means the client is actively looking for someone to hire, so it’s a great opportunity. You can show them you’ve listened to their needs and can provide exactly what they’re looking for.
On the other hand, you might send an unsolicited business proposal. This is more like a sales pitch where you introduce your business to a potential client for the first time. Here, it’s a good idea to show how you’ve helped other clients with similar projects to build trust.
What is the purpose of a business proposal?
The main purpose of a business proposal is to win a contract for a new project. When you submit a proposal, you’re often competing with other businesses. Your proposal needs to stand out and clearly show the value you offer. This value could be saving the client time or money, or providing a higher quality service.
Including testimonials or case studies from past projects is a great way to provide social proof. It shows the client you can deliver the work to the standard they expect. Even if your proposal isn’t accepted, sending a professional document can get your business noticed and may lead to future work.
Learn more about RFP trends: loopio.com
What are the different types of business proposals?
Business proposals are not one-size-fits-all; the format changes depending on your industry. How you showcase your products and services will be shaped by what you offer. For example, if your work is visual, like design or landscaping, your proposal should reflect that with images and mock-ups. In contrast, if you’re a consultant, client references and past results are more powerful.
Sometimes, a written document isn’t enough. A follow-up meeting can give you the chance to connect with the client and demonstrate your communication skills and professionalism. In these situations, the written business proposal acts as a summary and leave-behind document.
Formally solicited proposals
This is when the client sends you an exact, formal document asking for a proposal. It usually comes as a RFP, as I mentioned above. They’ve defined the problem, the scope, the deadline, and the budget. Your job here is to follow their rules exactly. You need to show you read every detail, and your solution fits their requirements perfectly.
Informally solicited proposals
Sometimes, a potential client just says, “Can you send over a proposal for that?”. This is an informally solicited proposal. They asked for it, but they didn’t hand you a 50-page document telling you what to write. You have more flexibility here, which is great. You still need to be professional and address their needs clearly, but you can present the solution in a way that feels a bit more conversational and personal.
Unsolicited proposals
An unsolicited proposal is when you see an opportunity or a problem a potential client has, and you send them a proposal without them asking. You are being proactive here, which is a great way to grow your customer base. Because they aren’t expecting it, this type needs to be short, sharp, and focus on the tangible benefits of your solution. You are convincing them that they have a need and that you are the perfect person to fix it.
What is a business proposal letter or cover letter?
A business proposal letter is the cover letter that goes with your proposal document. It’s your introduction and sets the stage for the detailed information that follows. It should be brief and grab the client’s attention, making them want to read the rest of your proposal. Aim for one page, two at the absolute maximum.
What should be on the cover letter of a business proposal?
Your business proposal letter should be written in a standard letter format, using a professional yet friendly tone. Here are a few things to include:
- A quick note on why you’re sending it (e.g., “Following our conversation last week…”)
- Who prepared the proposal
- A brief summary of what’s inside
- Your contact information
- A heads-up about anything that might be different from what you discussed
What’s the difference between a proposal and an estimate?
Both business proposals and estimates are sales documents used to win a project, but they serve different purposes. An estimate is best for simple, straightforward jobs where the client just needs a price. A business proposal is for more complex projects that require a detailed plan and more convincing.
For many small businesses, a quick estimate is often enough, especially if work comes from referrals. But when a project is bigger, has more moving parts, or you’re up against a lot of competition, a detailed business proposal shows you have a clear plan and can deliver excellent results. Sources
