13.3 Business Proposal
- Describe the basic elements of a business proposal.
- Discuss the main goals of a business proposal.
- Identify effective strategies to use in a business proposal.
An effective business proposal informs and persuades efficiently. It features many of the common elements of a report, but its emphasis on persuasion guides the overall presentation.
Let’s say you work in a health care setting. What types of products or services might be put out to bid? If your organization is going to expand and needs to construct a new wing, it will probably be put out to bid. Everything from office furniture to bedpans could potentially be put out to bid, specifying a quantity, quality, and time of delivery required. Janitorial services may also be bid on each year, as well as food services, and even maintenance. Using the power of bidding to lower contract costs for goods and services is common practice.
In order to be successful in business and industry, you should be familiar with the business proposal. Much like a report, with several common elements and persuasive speech, a business proposal makes the case for your product or service. Business proposalsDocument designed to make a persuasive appeal to the audience to achieve a defined outcome, often proposing a solution to a problem. are documents designed to make a persuasive appeal to the audience to achieve a defined outcome, often proposing a solution to a problem.
Common Proposal Elements
Effective business proposals are built around a great idea or solution. While you may be able to present your normal product, service, or solution in an interesting way, you want your document and its solution to stand out against the background of competing proposals. What makes your idea different or unique? How can you better meet the needs of the company that other vendors? What makes you so special? If the purchase decision is made solely on price, it may leave you little room to underscore the value of service, but the sale follow-through has value. For example, don’t consider just the cost of the unit but also its maintenance. How can maintenance be a part of your solution, distinct from the rest? In addition, your proposal may focus on a common product where you can anticipate several vendors at similar prices. How can you differentiate yourself from the rest by underscoring long-term relationships, demonstrated ability to deliver, or the ability to anticipate the company’s needs? Business proposals need to have an attractive idea or solution in order to be effective.
You can be creative in many aspects of the business proposal, but follow the traditional categories. Businesses expect to see information in a specific order, much like a résumé or even a letter. Each aspect of your proposal has its place and it is to your advantage to respect that tradition and use the categories effectively to highlight your product or service. Every category is an opportunity to sell, and should reinforce your credibility, your passion, and the reason why your solution is simply the best.
Table 13.2 Business Proposal Format
|Cover Page||Title page with name, title, date, and specific reference to request for proposal if applicable.|
|Executive Summary||Like an abstract in a report, this is a one- or two-paragraph summary of the product or service and how it meets the requirements and exceeds expectations.|
|Background||Discuss the history of your product, service, and/or company and consider focusing on the relationship between you and the potential buyer and/or similar companies.|
|Proposal||The idea. Who, what, where, when, why, and how. Make it clear and concise. Don’t waste words, and don’t exaggerate. Use clear, well-supported reasoning to demonstrate your product or service.|
|Market Analysis||What currently exists in the marketplace, including competing products or services, and how does your solution compare?|
|Benefits||How will the potential buyer benefit from the product or service? Be clear, concise, specific, and provide a comprehensive list of immediate, short, and long-term benefits to the company.|
|Timeline||A clear presentation, often with visual aids, of the process, from start to finish, with specific, dated benchmarks noted.|
|Marketing Plan||Delivery is often the greatest challenge for Web-based services—how will people learn about you? If you are bidding on a gross lot of food service supplies, this may not apply to you, but if an audience is required for success, you will need a marketing plan.|
|Finance||What are the initial costs, when can revenue be anticipated, when will there be a return on investment (if applicable)? Again, the proposal may involve a one-time fixed cost, but if the product or service is to be delivered more than once, and extended financial plan noting costs across time is required.|
|Conclusion||Like a speech or essay, restate your main points clearly. Tie them together with a common them and make your proposal memorable.|
Ethos, Pathos, and Logos
Ethos refers to credibility, pathos to passion and enthusiasm, and logos to logic or reason. All three elements are integral parts of your business proposal that require your attention. Who are you and why should we do business with you? Your credibility may be unknown to the potential client and it is your job to reference previous clients, demonstrate order fulfillment, and clearly show that your product or service is offered by a credible organization. By association, if your organization is credible the product or service is often thought to be more credible.
In the same way, if you are not enthusiastic about the product or service, why should the potential client get excited? How does your solution stand out in the marketplace? Why should they consider you? Why should they continue reading? Passion and enthusiasm are not only communicated through “!” exclamation points. Your thorough understanding, and your demonstration of that understanding, communicates dedication and interest.
Each assertion requires substantiation, each point clear support. It is not enough to make baseless claims about your product or service—you have to show why the claims you make are true, relevant, and support your central assertion that your product or service is right for this client. Make sure you cite sources and indicate “according to” when you support your points. Be detailed and specific.
A professional document is a base requirement. If it is less than professional, you can count on its prompt dismissal. There should be no errors in spelling or grammar, and all information should be concise, accurate, and clearly referenced when appropriate. Information that pertains to credibility should be easy to find and clearly relevant, including contact information. If the document exists in a hard copy form, it should be printed on a letterhead. If the document is submitted in an electronic form, it should be in a file format that presents your document as you intended. Word processing files may have their formatting changed or adjusted based on factors you cannot control—like screen size—and information can shift out of place, making it difficult to understand. In this case, a portable document format (PDF)—a format for electronic documents—may be used to preserve content location and avoid any inadvertent format changes when it is displayed.
Effective, persuasive proposals are often brief, even limited to one page. “The one-page proposal has been one of the keys to my business success, and it can be invaluable to you too. Few decision-makers can ever afford to read more than one page when deciding if they are interested in a deal or not. This is even more true for people of a different culture or language,” said Adnan Khashoggi, a successful multibillionaire.Riley, P. G. (2002). The one-page proposal: How to get your business pitch onto one persuasive page (p. 2). New York, NY: HarperCollins. Clear and concise proposals serve the audience well and limit the range of information to prevent confusion.
Two Types of Business Proposals
If you have been asked to submit a proposal it is considered solicited. The solicitation may come in the form of a direct verbal or written request, but normally solicitations are indirect, open-bid to the public, and formally published for everyone to see. A request for proposal (RFP), request for quotation (RFQ), and invitation for bid (IFB) are common ways to solicit business proposals for business, industry, and the government.
RFPs typically specify the product or service, guidelines for submission, and evaluation criteria. RFQs emphasize cost, though service and maintenance may be part of the solicitation. IRBs are often job-specific in that they encompass a project that requires a timeline, labor, and materials. For example, if a local school district announces the construction of a new elementary school, they normally have the architect and engineering plans on file, but need a licensed contractor to build it.
Unsolicited proposals are the “cold calls” of business writing. They require a thorough understanding of the market, product and/or service, and their presentation is typically general rather than customer-specific. They can, however, be tailored to specific businesses with time and effort, and the demonstrated knowledge of specific needs or requirement can transform an otherwise generic, brochure-like proposal into an effective sales message. Getting your tailored message to your target audience, however, is often a significant challenge if it has not been directly or indirectly solicited. Unsolicited proposals are often regarded as marketing materials, intended more to stimulate interest for a follow-up contact than make direct sales. Sue Baugh and Robert Hamper encourage you to resist the temptation to “shoot at every target and hope you hit at least one.”Baugh, L. S., & Hamper, R. J. (1995). Handbook for writing proposals (p. 3). New York, NY: McGraw-Hill. A targeted proposal is your most effective approach, but recognize the importance of gaining company, service, or brand awareness as well as its limitations.
Sample Business Proposal
The Writing Help Tools Center is a commercial enterprise, and offers a clear (and free) example of a business proposal here:
Business proposals need to target a specific audience.
Click on this link to see a sample request for proposal from the American Institute of Public Accounts.
- Prepare a business proposal in no more than two pages. Follow the guidelines provided in the sample letter for CPA services on the American Institute of Public Accountants Web site. Do not include actual contact information. Just as the example has employees named after colors, your (imaginary) company should have contact information that does not directly link to real businesses or you as an individual. Do not respond to point 12.
- Search for an RFP (request for proposal) or similar call to bid, and post it to your class. Compare the results with your classmates, focusing on what is required to apply or bid.
- Identify a product or service you would like to produce or offer. List three companies that you would like to sell your product or service to and learn more about them. Post your findings, making the link between your product or service and company needs. You may find the Web site on creating a business plan (http://www.myownbusiness.org/s2/#3) useful when completing this exercise.