- A business proposal introduces your company, goods, and services to prospective clients or partners.
- Contact potential clients or partners about their needs before sending a proposal so you can customize it.
- Craft a relevant proposal that includes your availability, a fee breakdown, and an expiration date.
- This article is for entrepreneurs and small business owners who want to write effective business proposals.
Securing clients is a top priority for entrepreneurs and small business owners. However, earning prospects’ trust can be challenging. A business proposal is a way to introduce your company to potential customers and demonstrate what you can contribute to their success and growth.
Writing a business proposal – not to be confused with writing a business plan – allows you to explain who you are and what you offer in a single document. Creating business proposals requires time and thought but is essential for business growth. We’ll explain what you should know about writing effective, efficient business proposals.
If your company is in the early stages of speaking to investors, you need a business plan, not a proposal. Ensure your business plan includes an executive summary, product analysis, market analysis, and an overall marketing plan.
What is a business proposal?
Before signing a contract, you must ensure you and your client are on the same page. According to Crystal Richard, president of Crystal Richard & Co, a business proposal aims to discuss and negotiate both sides’ needs.
“A business proposal ensures that both you and the potential client are well aware of the scope of work that you are negotiating and all of the tasks, goals, and outcomes within it,” Richard explained. “Depending on the level of your service offering, it’s incredibly important to be clear about what you will be doing for the client and what you won’t be doing.”
There are two types of business proposals: solicited and unsolicited.
- Solicited business proposal. A solicited business proposal follows interaction with potential customers. “A solicited business proposal typically follows an initial email or phone conversation where a potential client has expressed an interest in working with you,” Richard noted. “They have openly shared that they are interested in your services and would like more information.” A prospective customer may ask for a solicited proposal through a request for proposal (RFP). This is typically an easier pitch to sell because the customer is already interested in your business.
- Unsolicited business proposal. An unsolicited proposal, also known as a cold proposal, is presented to a qualified lead that hasn’t asked for one and doesn’t expect one. Your goal is to reach out and pique a potential client’s interest in your products or services.
How do you format a business proposal?
Your business proposal should be concise and organized. Proposals are generally formatted in this order:
- Title page
- Table of contents
- Executive summary
- Statement of problem, issue, or job at hand
- Approach and methodology
- Schedule and benchmarks
- Cost, payment, and legal matters
However, there’s no one-size-fits-all format, and the layout doesn’t need strict categories. For example, Jessica Lawlor, president and CEO of Jessica Lawlor & Company, typically includes the following in her business proposal:
- Business summary
- Management team (including photos and bios)
- Why a client should choose the business
- Package and pricing options
- Additional notes
“I keep my proposals short and to the point,” Lawlor noted. “A proposal is meant to serve as a conversation starter, not a be-all and end-all document. My proposals are typically no more than four pages long.”
To improve customer communication, save your business proposal document as a PDF before sending it. You won’t have to worry about formatting and design issues that could detract from your message.
What to include in a business proposal
While there’s flexibility in how you format and present your business proposal, every business proposal should include the following elements.
1. Include your availability in the business proposal.
Ensure your clients know when and how often you and your team will be available to offer your services to them. They’re likely not your only customers, so scheduling specific time with each client will ensure you’re equally dedicated.
Richard says setting availability parameters holds you accountable and lets clients know precisely how much of your time they’ll get. “Especially if you have other clients, you don’t want one thinking they have you 40 hours a week when in reality, you’re only working on their account for 10,” Richard explained.
2. Include a fee breakdown in the business proposal.
Don’t commit to a client before sorting through costs. Discuss what’s included in your fees, extra costs, invoicing practices, and more.
For example, as a PR professional, Richard’s services don’t include the cost of distributing on a newswire. It’s essential for clients to understand that, if interested, this service comes at an additional cost.
When creating an invoice for a client, include the date, a unique customer identifier, payment terms, and complete contact information.
3. Include the business proposal’s expiration date.
Details change, including costs and services. Your current business proposal might not be relevant in the months, or even weeks, to come. Make this known in your document.
Include the business proposal’s expiration date to protect yourself. “This way, a prospective client can’t come back to you three or six months down the line and expect the same pricing,” Lawlor explained. “I typically include an expiration date of two to three weeks from when the proposal is sent – this also puts a bit of pressure back on the prospective client to make a decision, as the new business process can sometimes take a long time.”
Business proposal tips and best practices
Consider the following tips and best practices when creating your business proposal.
1. Meet in person before creating a business proposal.
A formal meeting will help your prospect become familiar with you before diving into a business contract.
“A proposal, in my opinion, should never be a first point of contact,” Lawlor advised. “I send a proposal to a prospective client after an initial conversation and ensuring the project seems like a good fit on both ends. At that point, the prospective client already has an idea of my personality and what my company can offer.”
While a proposal introduces you and your product or services, nothing beats an in-person consultation.
When meeting with prospective clients, follow business meeting etiquette best practices, including being timely, greeting all participants, listening, and asking thoughtful questions.
2. Simplicity is crucial in business proposals.
Your proposal doesn’t have to be an elaborate persuasive essay or art project. In fact, it’s better to keep it succinct. Richard said her best feedback came from business proposals where she focused on quality over quantity, cutting additional fluff.
3. Add a personal touch to your business proposals.
When you present your document, ensure you set yourself and your business apart from the competition. Commit to your personality, whether leveraging your quirky design skills or expressing your character in a conversational tone.
“I make sure that the first page of each business proposal I create has a warm welcome about how I’m excited at the idea of working together, what I loved most about our initial conversations leading up to the business proposal, and, of course, I insert a few fun one-liners that fit my branding so they get a true idea of my personality and why I’m different,” said Richard. “Show them what makes you special.”
4. Showcase your successes in your business proposal.
Showcase your success by displaying previous work you’ve done for clients. This will give prospects an idea of your capabilities without openly sharing your process.
“Don’t be afraid to showcase your successes, even if it feels a little braggy,” Lawlor advised. “This is your time to shine and to show a prospective client all that you’ve done and all that you can accomplish on their behalf. Now is not the time to hold back or be humble.”
5. Schedule a follow-up call after submitting your business proposal.
Reaching out after sharing your proposal is crucial to securing clients. A follow-up can answer client questions, clarify your pricing, and give you a chance to sell your business further and connect with potential customers.
“It’s helpful if you can schedule a call for the day you send the proposal,” said Lawlor. “This way, you can walk through the sections of the proposal and explain items in further detail before a prospective client digs in on their own.”
After prospects accept your business proposal and you close the deal, it’s crucial to manage your customer relationships to boost retention, loyalty, and satisfaction.
You have the tools to write a business proposal
If writing a business proposal seems daunting, remember you already have all the necessary tools. You know what you want to sell, what you can and can’t provide, your costs, timeline, project hurdles, and what you’re willing to change.
A business proposal puts all these things in writing while highlighting your company’s successes and capabilities. Understand your prospects’ needs and ensure you’re not overpromising.
Now you’re ready to hit “Send.”
Ross Mudrick contributed to this article. Source interviews were conducted for a previous version of this article.