To keep your business growing, you need to always be adding to your client portfolio. In order to keep landing new clients, you have to be able to sell them on your business and what you can do for them. One way to do so is by preparing a business proposal. Business proposals not only allow you to include the details of the project, your proposed solution and prices, but also give you the leeway to sell the benefits of your solution and your company. The business proposal is your opportunity to shine and, hopefully, acquire a new client in the process.
What is a business proposal?
A business proposal is a multipage document detailing 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 client’s need and send it to the client to capture their attention and win their business. Unsolicited proposals are generally less specific because the prospective client has not told you anything about its needs.
- 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 proposal, or RFP. There is a deadline by which the proposals are due so the client can compare them to each other, and there may be specific specifications that the solutions need to conform to. Sometimes, companies whose proposals are attractive to the client are called in and asked to make a presentation on their solution so that the client can ask questions. After reviewing all of the proposals, the client will make its choice.
Business proposals should demonstrate your company’s understanding of the client’s problem or need, your expertise and experience in addressing this type of need, your proposed solution and recommendations, your unique selling points, how much you are charging, and what the terms and conditions will be if the client chooses your company for the project.
Business proposals can be printed on paper, in the form of a presentation using software such as PowerPoint (sent electronically or printed), or via proposal software that allows clients to accept the proposal electronically.
The ideal length for a proposal, on average, is six pages. This gives you enough space to adequately cover the essentials but is short enough to keep the client’s attention.
When do you need a business proposal?
Business proposals are not appropriate and 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. The reasons for this are twofold. First, to justify a business proposal, the size of the project must be fairly significant, at least $1,000. Second, the project or challenge must have some level of complexity where it needs a custom solution, not something ready-made.
These are some industries that typically require business proposals:
- Landscape design
- Property management
- Market research
- Coaching (business or personal life coaching)
Before you start writing your proposal
Writing 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 will want to develop a sound, clear and precise business proposal. To do so, there are many pre-planning activities you will want to conduct.
1. Do your research.
If you don’t know much about the potential client, you need to study. Go to the website and read everything. Get names of decision-makers, an idea of its business model, how long it’s been in business, its goals and its financial picture.
2. Arrange a meeting with management.
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 goals and needs, so be a good listener and take notes! You also want to 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/industries.
3. Develop your solutions.
Once you understand the client’s goals and needs, you are prepared to brainstorm and develop the most effective and cost-effective ways to serve them. For example, if you are 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 meet with that owner or their rep. You ask about their issues and problems and what made them unhappy with the previous management. These will be critical points in your solution proposal. [Related article: Your Guide to Creating a Small Business Marketing Plan]
What to include in the proposal
Writing a business proposal can be a lengthy and time-consuming process. If you don’t know how to write a proposal, you need to be a quick learner. There are templates and samples online that you can study, or you can visit a fellow entrepreneur who has experience and ask for their help. Generally, though, your sections will be as follows.
- Introduction: This should summarize the client’s needs, what your company provides and your top selling points.
- Description of the client’s current situation: This is a way to describe the need you are trying to solve for. This shows the potential client that you understand what their needs are.
- Solution: State your solution, including the goals, objectives and methodologies for meeting the client’s needs and remedying the current situation.
- Timeline: This is where you say how quickly you can get started once the client accepts your proposal, when each of the steps you are proposing will take place and the date when the project should be complete.
- Proof: Do not be afraid to praise yourself. What are the benefits of choosing your company? Point out your successes with similar projects and provide references.
- Pricing: This is where you detail how much the project with the currently described scope will cost. Critically important, the costs must be carefully and clearly broken down so that each facet of your solution methodology has a specific cost. This way, if the client has to cut back on something, they can make informed decisions.
- Guarantee and terms and conditions: If you are offering a guarantee or warranty, this is the place to include it. You should also include 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 with a lawyer.
- Next steps: At the end of the proposal, include a call to action. How can the client say yes to this proposal? Most proposals include a signature page that allows the client to accept the bid, while some proposal software allows clients to not only accept the proposal electronically, but also pay for it online. In addition, say what will happen next. For example, you might say that you will set up a meeting with the point person at the client company to get more specific information on their needs, or the next step may be for your team to create a proposed design for discussion.
To establish your credibility, include testimonials, examples of similar projects and client references, and awards and press your company has received.
How to write the proposal
If you are not a good writer, get someone who is. You never know who will be reading your proposal, so make sure there are no grammatical, punctuation or spelling errors. And above all, keep it simple. Write it in a conversational tone. No one wants to struggle through long and complex sentences with academic-level vocabulary. As an extra check, have someone else read it over to catch mistakes and points that need clarification before you send it to the client.
You may also want to get input from your marketing and sales team. They specialize in communicating with prospects and know their pain points and priorities. So they can help you emphasize the right things and get your message across in a way that will be effective.
In addition to the content of your proposal, the way it looks makes a difference. An attractive graphic on the cover page can catch the eye of the client, and high-quality images, charts and layout make your proposal easier to read and more compelling. A well-designed proposal also tells the client that your business is professional and that you took your interaction with them seriously. You can use a business proposal template or software, or you can engage the services of a graphic designer to make your proposal look its best.
Proposals with an attractive cover page tend to convert 45% better than those without one, according to Better Proposals.
How to write different types of business proposal letters
Business proposal solicitation letter
A business proposal solicitation letter sets the stage for an unsolicited business proposal and is a formal and much more dignified cold call or cold email. You are trying to drum up business by introducing yourself to potential clients who may or may not have heard of you before. The letter should, of course, be business formal and impeccable in grammar and style. Here are some pointers:
- Find out who the decision-maker is before you write the letter. It should be addressed to that individual.
- Your opening paragraph should catch their attention quickly. The potential to lower their costs will usually do the trick, so tell them that you can save them money and/or make their operations more cost-efficient.
- The next paragraph should provide more detail about your product or service and describe how it saves money or is more efficient.
- The third paragraph should speak to your qualifications. How long have you been doing this? Name past and current clients who have experienced cost savings and greater efficiency with your help. Be certain that you have permission to use their names, as they may be contacted.
- The closing paragraph should be short and give some call to action. Either ask them to call you or tell them you will call in a few days for an appointment.
Business proposal cover letter
Once you have written the business proposal, it is time to send it to the client. Even when the client is expecting to receive it, you should still 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 that you have the ability, expertise, experience and creativity to successfully solve their problem. Throw in a few examples, 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 that the proposal is enclosed or attached, and encourage them to reach out to you if they have any questions.
Chad Brooks contributed to the writing and research in this article.