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How do I draft a proposal to the MD of a mining company?

I would like to write a proposal to one of the Coal Mines to prove a service of dump management. There is no one who is providing this service to mines, and it will be for the first time that someone will be providing the services.

Kindly assist me on how to structure my proposal so that it can be accepted or at least be considered,

Warm Regards
Sibusiso

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Dear Sibusiso

I have been selling business solutions since 1986 as well as being on the other side of the desk being sold to since 2001. Despite all the changes in technology and advancement of the tools we use, one thing will never change and those are the reasons businesses buy solutions.

There a number of primary drivers in any business purchase decisions and your proposals must address all of these:

1. Legislative – When companies have to buy solutions including services so the compelling reason is there, which means you just have then sell why your offer is better than others.

2. Cost Reduction – When you can show a definitive cost reduction in business operation. Remember this is different to “Efficiency” (covered below). Here you must be able to show precise monetary value in savings. These must be easily quantifiable and realistic, as any pie in the sky scenarios will undermine your credibility and hence any substance of your proposals.

3. Efficiency Gains – This is about productivity or reduction in process, which downstream will provide either cost savings or deliver customer satisfaction/experience. This one is a harder sell than number 1 and 2, as you have to have a deep understanding the customer's business. These types of sales are always easier when you are incumbent suppliers with a close relationship with the client and good insight into their specific business needs.

4. Innovation – Where you can show new ways of doing things and could deliver either or all of 2 and 3.

5. Diversification – This is when you can show an opportunity to diversify or create revenues from new avenues. This is very much a consultative process and again you need the trust of the customer from the get-go.

In all these scenarios with the exception of Legislative drivers, you really need to differentiate “Prospects” from “Suspects”, and “Needs” from “Wants”. The difference between “Prospect” and “Suspect” boils down to whether the company has a “Compelling Reason” to buy, and if so whether they have the “Resources” to buy.

Let's simplify this by an example of someone who needs to by a “house” (compelling reason as they need to live somewhere) vs if they have the cash or can obtain a loan to buy one. If they cannot raise the funds to buy a house, no matter how compelling the need, they are not a "Prospect".

On the other hand, where to buy your property assuming that you have the funds, is about “Wanting” to live somewhere vs “Needing” to live somewhere (due to your funds, schools catchment areas, your work, etc.).

You need to know these points as you need to address these issues in your proposals. In our own business our proposals follow a simple structure:

1. Salutation - This is the social norms that are different in different countries but you must obey these conventions. However, you must always refer to your meetings as your proposals are based on what you have gained in your meetings or conversations. This gives you a reference point, which means you are emphasizing “I am not making this stuff up, but you told me how things are in your business!”. If you have not met them or had a conversation with them, then you should ask yourself "Why am I doing this?". You do not know the company well enough, and nor do they know you, so you are wasting your time. We never send a proposal unless we have a "Discovery" meeting with the client. In our case, most of these are on Skype as 70% of our customers are International and would be impossible for us to meet in the flesh.

2. Current Situation – Set out the current status of the company (and if it is Legislative then you must start with changes in law and the need for compliance).

3. Current Challenges – Describe the current “Downsides” what they are doing and the costs or disadvantages of the status quo.

4. Benefits – How will the customer benefits from changes including cost savings, etc.

5. Solution – How you will achieve these with your proposed solutions. Don't get into speeds-and-feeds, this is about overview and not technical details of your solution. These come later if the customer wants to take it further. You are not tendering, you are proposing.

6. Summary – Recount the current disadvantages and advantages, and always ask for a second meeting or a call to go through your proposals in detail. The suggestion here is that you never put down 100% details of your solution on paper. If you do, a) it can be shown to your competitors so that they can discover your approach and get into a Dutch auction, b) if you tell someone how to do something, why do they need you afterward?

This is, of course, a general guideline and each industry has it's own unique situation, as well as cultural influences in the sales process, so you must consider these in your approach.

I hope this helps.

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