Write Your Way to a Win: Business Proposal 101

What is a business proposal?

A business proposal is a multipage document that details how your business can solve a problem or fill a need for a customer. Business proposals can be unsolicited or solicited.

• Unsolicited: With an unsolicited business proposal, you create the proposal on your own based on your understanding of the prospective client’s needs and send it to them to capture their attention and hopefully win their business. Unsolicited proposals are generally less specific because the potential customer has not told you anything about their preferences.
• Solicited: With a solicited proposal, the customer identifies its own need or challenge and then asks companies like yours to submit proposals with solutions and costs. This is called a request for proposals (RFP). These proposals have deadlines so the client can compare them before making a decision. There may be other specifications the proposed solutions must meet. Sometimes, companies with attractive proposals are asked to present their solution so the client can ask questions and engage with you. After reviewing all of the proposals, the client will choose which firm to hire.

Business proposals should demonstrate your company’s understanding of the client’s challenges, your proven track record in solving similar problems, your strategic approach and methodology, your competitive advantages, detailed pricing structure, and clear terms for project execution and delivery.

Business proposals can be printed on paper, provided as a presentation (such as PowerPoint), or created and shared via proposal software that allows clients to accept the proposal electronically.

When do you need a business proposal?

Business proposals are not appropriate or necessary for all types of businesses, but in some industries, they are a crucial way to get new clients. They are almost exclusively used in business-to-business (B2B) sales. There are two main reasons for this.

First, to justify a business proposal, the size of the project must be fairly significant — at least $1,000, which is common for B2B projects. Second, the project or challenge must be complex enough that it requires a custom solution, which is often the case in the B2B world.

These industries typically require business proposals:

• Construction
• Landscape design
• Architecture
• Property management
• Engineering
• Consulting
• Marketing
• Market research
• Coaching
• Software development
• IT services and cybersecurity

What to do before you start writing your business proposal

Preparing a business proposal involves a lot of initial legwork. Once you become aware that a potential client is looking for proposals in your business niche, you’ll want to develop a sound, clear and precise business proposal that appeals to their needs. There are many steps you should complete before you start writing the proposal.

1. Do your research.

If you don’t know much about the potential client, you need to study them. Go to their website and read everything. Get the names of decision-makers, an idea of the business model, how long the company has been in operation, its goals and its financial picture. This is especially important if you’re sending an unsolicited proposal. You can start by analyzing the potential client’s annual reports, press releases, etc. Review their competition, recent strategic initiatives and publicly stated goals. For public companies, SEC filings provide valuable insights into financial health and strategic priorities. This intelligence helps you align your proposal with their business objectives.

2. Arrange a meeting with management.

For solicited proposals, you may not get in to see the CEO, but you should make an appointment with the highest-level manager possible. During this meeting, you want the client to clarify their goals and needs, so ask probing questions, be a good listener and take notes. You should also get clear budget parameters so you have a financial framework for your proposal. While the focus of this meeting must be on the client, try to tout yourself a bit. Talk about your successes with similar organizations or industries.

3. Develop your solutions.

Once you understand the client’s goals and needs, you’re prepared to brainstorm and develop the most helpful and cost-effective ways to serve them.

For example, if you’re in the property management business and have become aware that a large apartment complex owner is looking for a new outside property management firm, you would meet with the owner or another company representative. You’d ask about their issues and problems and what made them unhappy with the previous management. Based on their responses, you would craft custom solutions to include in your proposal.

How to write a business proposal and what to include

Writing a business proposal can be time-consuming. If you don’t know how to write a proposal, you can study templates and samples online or ask for help from a fellow entrepreneur who has experience with writing business proposals. 

Generally, though, a business proposal should be organized into these sections:

1. Introduction: The introduction should summarize the client’s needs, what your company provides and your top selling points.
2. Description of the client’s current situation: This is a way to describe the need you are trying to address. This shows the potential client that you understand their challenges.
3. Solution: State your solution, including the goals and methodologies for meeting the client’s needs and remedying their current situation.
4. Timeline: The timeline states how quickly you can get started once the client accepts your proposal, when each step you’re proposing will take place and when the project should be complete.
5. Proof: This section highlights the benefits of choosing your company. Do not be afraid to praise yourself. Point out your successes with similar projects, and provide references. [Learn why who you use for job references is important.]
6. Pricing: Structure your pricing transparently with itemized costs for each project phase or deliverable. The costs must be carefully and clearly broken down so each facet of your solution methodology has a specific cost assigned to it. This way, if the client has to cut back on something, they can make informed decisions about how it will affect the project. Consider offering tiered pricing options — basic, standard and premium — to give clients flexibility while potentially increasing project value.
7. Guarantee and terms and conditions: If you’re offering a money-back guarantee or some sort of warranty, this is the place to mention it. You should also include any terms and conditions, such as how much will be charged if the scope of the project changes and how often the client will be billed. You should also outline how approvals and disputes will be handled. To write this section, you may want to consult a business lawyer.

Next steps: At the end of the proposal, include a call to action that specifies the next steps. How can the client say yes to this proposal? Most proposals include a signature page that allows the client to sign to accept the bid, while some proposal software allows clients to not only accept the proposal electronically but also pay your initial fees online. In addition, say what will happen after that. For example, you might note that you’ll set up a meeting with the point person at their company to get the information you need to formally begin the project, or the next step may be for your team to create an updated blueprint.

Business proposal best practices

Creating an effective business proposal can take some time and effort, but it’s important to do it right. There are many best practices that will set you up for success.

Proposal writing best practices

Here are some writing best practices to follow when you’re creating a business proposal:

• Find a good writer. If you’re not a skilled writer, get someone who is to draft the text.
• Keep it simple. Write the content in a conversational tone. No one wants to struggle through long and complex sentences with academic language.
• Check for errors. Make sure there are no grammatical, punctuation or spelling errors. As an extra check, have someone else read over the draft to catch mistakes and note points that need clarification.
• Seek input. You may want to get input from your marketing and sales team or agency. They specialize in communicating with prospects and know their pain points and priorities, so they can help you emphasize the right points and get your message across in an impactful way.

Proposal design best practices

The design of your proposal also makes a difference. An attractive graphic on the cover page can catch the recipient’s eye, and high-quality images, colorful charts and a smart layout make your proposal easier to read and more compelling. A well-designed proposal also signals to the client that your business is professional and that you’re taking this opportunity seriously.

Here are some design best practices to follow when you’re creating a business proposal:

• Use a clear and professional layout. Use a clean and professional design, and ensure sufficient white space for readability. Be sure to use a consistent font style and size throughout the document. Use bold or italicized text sparingly for emphasis.
• Incorporate visual elements strategically. Include visuals such as graphs, charts and images to illustrate key points and data. Ensure that the visuals are high quality and relevant to the content. Using color to strategically highlight important information can be helpful as well, but avoid excessive use that can be distracting.
• Format it in a logical structure. Organize the proposal into sections with clear headings and subheadings. Use bullet points and numbered lists to break down complex information and improve readability.
• Include your company branding. Weave in your company’s branding elements, such as your logo, colors and style guide. Maintain a consistent brand image and tone throughout the proposal.

Consider using professional proposal software that offers customizable templates, collaboration features and analytics to track when clients view your proposal. You can also hire a graphic designer to make your proposal look its best.

How to write business proposal letters

Once you have written your business proposal, you need a way to call the potential client’s attention to it. That’s where business proposal letters come in. Unsolicited business proposal letters are your chance to introduce yourself and your proposal, while solicited business proposal letters allow you to formally submit your proposal for what’s previously been discussed.

Unsolicited business proposal letter

An unsolicited business proposal letter serves as your strategic introduction to potential clients who haven’t requested your services. This letter must quickly establish relevance and credibility while demonstrating clear understanding of their business challenges. The letter also should be business formal and have impeccable grammar and style. 

Here are some pointers:

1. Find out who the decision-maker is before you write the letter. It should be addressed to that individual.
2. Your opening paragraph should lead with a specific, quantifiable benefit relevant to their industry. Reference a recent company announcement, market trend or regulatory change that creates an opportunity for your services.
3. The next paragraph should provide more detail about your product or service and describe how it will save money or be more efficient.
4. The third paragraph should speak to your qualifications. How long have you been doing this? Name past and current clients that have experienced cost savings and greater efficiency with your help. Be certain you have permission to use their names, as they may be contacted.
5. The closing paragraph should be short and include a call to action. Either ask them to call you or tell them you will call in a few days for an appointment.

Solicited business proposal letter

Even when the client is expecting to receive your proposal, you should include a cover letter as an introduction. If the client has issued an RFP or specifically asked you for a proposal, refer to this and express thanks for the opportunity. Let the client know you have the ability, expertise, experience and creativity to successfully solve their problem.

Throw in a few details, such as how many years you’ve been in business, similar problems you have solved for other companies in the industry and how long clients tend to use your services. Finally, tell them the proposal is enclosed or attached, and encourage them to reach out to you if they have any questions. Include your direct contact information and availability for follow-up discussions or presentations.

Skye Schooley and Chad Brooks contributed to the reporting and writing in this article.