Writing a business proposal can seem intimidating, but it’s one of the most important steps in the B2B customer life cycle. It’s your chance to show why your products and services are the right choice for the client’s need. And once you know how to write a business proposal, you’re going to have a much better idea of how to talk to that client and close the deal.
Here are eight easy steps to write a business proposal that will set you apart from the competition and give you the best chance to make the sale.
What Is a Business Proposal?
Plainly stated, a business proposal is a written document that outlines your service or product to a potential client or buyer.
Generally, there are two kinds of business proposals: solicited and unsolicited.
When a company is looking for a vendor to help them fulfill a need, they’ll often put out an RFP (request for proposal) that outlines the time frame for consideration and what solicitors should include in the pitch. This kind of situation is great because the RFP gives you a clear idea of how to make a business proposal to this client. However, it also means other companies will be actively bidding for that contract, which means more competition and pressure to offer a more “competitive” contract (i.e. cut your price).
You can also make an unsolicited business proposal to a company that has not put out an RFP. This kind of proposal has a higher chance of being ignored, especially if you don’t put in the work to figure out how to make a business proposal stand out to that potential client. But when an unsolicited business proposal letter gets a response, that prospect is likely not talking to other vendors, and you have a great opportunity to build a lasting, profitable client relationship.
Be careful not to confuse a business proposal with a business plan, which serves a different purpose. A business plan is a roadmap for your company that outlines goals and the specifics of how you plan to reach these goals. They are used internally, as well as to get small business funding. A business proposal is made to a sales prospect, and is used solely to procure business. It’s a pitch that explains why your services are best suited for a particular client—and it can be the difference between closing a deal and having a client walk away.
How to Write a Business Proposal
The 3 P’s of Business Proposal Writing
Whichever business proposal format you choose, whether that be a business proposal letter or a more traditional pitch, you must make sure to address the three P’s:
- Problem statement
- Proposed solution
- Pricing information
Addressing the problem, solution and pricing, in that order, allows you to align your pitch with the prospects needs. It means, first you talk to them about their pain points, then you talk about how you can alleviate those pain points and the value of your solution. And finally, you discuss the price, which should take advantage of the expectations you set while discussing the value of your solution.
Note that pricing a proposal is an art in its own right. Sometimes it’s a good idea to oversell the value and come in with what seems like a very cheap price point to win the business as a bargain; other times this can make your solution look cheap. Sometimes it’s better to set a price that presents your solution as a premium and worth the money; other times this can price you out of that market. It’s a delicate balance that relies on your understanding who you’re pitching, and that brings us to our next section:
Know Your Audience
You want your proposal to appeal directly to your audience, so here are some important questions to keep in mind as you put it together:
- Who will read your proposal?
- Are they familiar with the problem?
- What are they interested in hearing?
- What do you want them to take away from your proposal?
- What will encourage them to take action after reading it?
Clients want to see that you’ve tailored the proposal to them, so make sure you know the company you’re pitching and their pain points. This will allow you to create a business proposal that feels personal and resonates the way you’ve intended.
Make sure you know what else they’re seeing in the market, too. You don’t want to come in with a pitch that doesn’t stand out from the crowd, and you also don’t want to come in with a price that’s too low or too high compared to the market price range. A mistake in either direction can make your business look bad.
Visual Content Counts
A guide on how to create a business proposal wouldn’t be complete without talking about how you present information. Visual content is essential in marketing, which is why we recommend making your proposal as visually stimulating as possible.
Wherever possible, aim to include graphics that help the client better understand the document. Things like tables and charts, when used correctly, are highly effective in assisting them to retain information. Graphics make the proposal appealing and easy to digest, so use them to your advantage.
8 Steps to Create a Business Proposal That Stands Out
Success in proposal writing depends on your ability to address the client’s issue(s) thoroughly. We’ll go through writing a business proposal step by step and, in the end, give you some ideas that will make the finished product stand out.
It’s worth mentioning that there’s no one right way to create a business proposal, and yours may look different depending on your product or service. We have created a basic business proposal outline that you can tweak depending on your needs.
1. Title Page & Table of Contents
The title page should include relevant information, such as your company name, logo and contact information, as well as your client’s name and contact information. The title page is your first impression, so it should be organized and eye-catching.
Your client will also appreciate a table of contents to help them navigate the proposal. If you are sending it electronically, make the table of contents clickable for easy navigation.
2. Executive Summary
The executive summary is a critical part of your proposal. Contrary to what you might think, it’s not a summary of the entire document; instead, you are setting the scene for what the client will read.
What’s the goal of the executive summary? After reading it, even if the client doesn’t read the entire proposal, they should know exactly how you will help them.
An excellent executive summary will explain to the customer why you’ve created this particular proposal. It will outline the benefits that you provide, how you will solve the problem, and why you offer the best solution.
3. Problem Statement
You can’t write a business proposal without clearly defining, in your own words, what the client’s need is. This section is essential to convince a client to hire you—if you haven’t shown that you’ve grasped their problem, you won’t close the deal.
Make it clear you understand what that need is. Also, keep in mind that the client’s main issue may just be finding the right person for the job.
4. Deliverables & Milestones
Remember how a proposal should feel customized to each client? This is the section that, if done correctly, will achieve that goal. You’ve identified the need, and now you have to offer a strategy tailored to meet that need.
In this section, you will outline deliverables, the methods you will use and project milestones. While you want to go into detail about how you’re going to solve their problem, be careful to avoid being overly technical. This section should be easy to follow without overwhelming the client with particulars.
5. Resources & Qualifications
You’ve shown the client you understand their pain point, and you’ve specifically outlined how you will solve that issue. Now it’s time to explain why your company is the perfect resource for the job.
This is your chance to show off, so don’t be shy! Ask yourself, why should this client trust our company? Talk about what qualifies you above others in your field. Mention things like years of experience, past completed projects, relevant certifications and any noteworthy clients you’ve had.
Outlining a budget is a delicate balance. You don’t want to scare the client with an estimate that’s too high, but you also don’t want to mismanage cost expectations with an estimate that’s too low. And as discussed previously, the budget can have a big impact on how the client sees your business and these services.
We recommend being as exact as possible when setting forth a budget. List each item the client may need and include the most accurate pricing available. You may want to add some pricing models to help them see various options. Do your homework and know where your price is coming in against the market.
7. Terms and Conditions
As its name suggests, the terms and conditions sections should spell out the project specifics, including pricing, project timeline, project duration and payment dates. This section lays out what both you and the client promise if you agree to the proposal.
The last part of a business proposal, the agreement section is where both parties give explicit approval to the terms and conditions by signing on the dotted line. Your proposal should include a signature box, as well as a friendly prompt for them to contact you if they still have questions.
How Long Should a Proposal Be?
There’s no hard and fast rule to answer this question. Proposal length depends on many factors, including the sector you’re in and the complexity of the project. It helps if you have an idea of what other proposals in your market look like, too.
The short answer to how long a proposal should be is that you want to be as concise as possible while leaving no doubt in the client’s mind that you are the best solution.
Things to Keep in Mind When Creating a Business Proposal
You know that building relationships with customers and clients matters for sales, so be careful with the relationship you’ve cultivated when writing a business proposal.
You’ve taken the time to craft a highly effective proposal. Don’t let specific details slip by you—details that show your client that they matter.
Polished Proposals Seal the Deal
Knowing how to write a business proposal means learning how to polish. Make sure the document you’ve worked so hard on is fully refined by:
- Proofreading; poor spelling and grammar make the wrong impression
- Writing in the active voice
- Saying what you mean, and saying it clearly
Final Thoughts on How to Make a Business Proposal
A highly customized business proposal is the first time you showcase your dedication, commitment and unique selling proposition to a client. Do your homework on the company, the industry and your competitors so you can talk specifically about the business situation and bridge the gap between you and prospective clients.
Make this first impression count, and your chances of success will increase many times over.