According to research from the RAIN Group, you’ll likely need to speak with a prospect at least eight times before they convert to a paying client. One of those touchpoints involves developing and sending a business proposal that outlines how your product or service can help solve this potential client’s pain points. Our guide goes through what a business proposal is, why they’re important, and each component of this vital document.
What Is a Business Proposal?
A business proposal is a document that small business owners like yourself submit to business prospects to show how your company will serve the prospect. Business proposals can be either unsolicited or solicited – the former is essentially a cold call, and the latter follows a conversation with a clearly interested lead. Both types of proposals should follow the same approximate business proposal outline.
Why Do You Need Business Proposals?
Whereas an ordinary consumer can just walk into a store and pick up whatever items they need, B2B client relationships are more complicated, and business proposals help to demystify them. For example, if a small business approaches your advertising firm for help exposing their brand to a certain segment, then saying “we’ll advertise to that segment” tells the prospect next to nothing. A business proposal fills in all the gaps.
Namely, a business proposal outlines how you’ll do what you do. In the advertising example above, a business proposal might outline the ad types implemented, the ad budget required, the duration of the ad campaign, your client reporting commitments, and more. Later in this article, you can find a basic business proposal outline that you can adapt to fit the needs of any client no matter your industry.
Business Proposal vs. Business Plan
Before you look more closely at business proposal outlines, you should make sure you understand that business proposals and business plans are not one and the same. The two terms are commonly conflated, but a business plan’s scope is far broader than just sales.
A business plan outlines how your whole company will function so that investors and lenders can decide whether to fund your business. A business proposal, as described above, is only pertinent to sales prospects, and you’ll need to develop a different business proposal for every prospect. A business plan, on the other hand, remains relatively constant as you pass it among potential funding sources.
Business Proposal Outline
A rough business proposal outline is as follows:
- Identify the prospect your problem wants to solve.
- Discuss relevant solutions that your company offers.
- Share your qualifications.
- Share your prices or estimate for service.
The above is just the broad order in which you should present your proposal. A more organized and compelling business proposal outline that follows the above structure might look as follows:
1. Executive Summary
The executive summary briefly tells your prospect about the solution you’ll offer in your business proposal and why it stands out from other solutions. In just a paragraph or two, this section gives an overview of your company's services and explains the problems that these services solve. The goal of this section is to give your prospect a general idea of your proposal before getting into the specifics.
2. Problem Statement
After your executive summary, describe your prospect’s problem in a few paragraphs. Although doing so might seem like telling your prospect something they already know, it instead shows the prospect that you’ve listened to them and thoroughly considered their situation. It also sets you up to deftly walk the prospect through your solution.
3. Services Proposed
Once you’ve briefly described your proposal and outlined the prospect’s pain points, get into how you’ll solve these problems. Start by naming all the relevant services that your company offers, then get into the details of each service. For example, don’t just say “media outreach” – detail to whom you’ll reach out, which channels you’ll use to reach out, and how often you’ll do so.
4. Service Timeline
After you detail how you’ll meet the prospect’s needs, present a timeline for doing so. This timeline should include dates for major milestones such as campaign launches and ends, deliverables, and reports. You should also indicate what each of your deliverables will comprise when crafting this business proposal section.
Anyone can propose a way to solve a problem, but only so many people have the skills and connections to actually solve the problem. That’s why sharing your qualifications is as important as explaining your solution.
In the qualifications section of your business proposal, you should discuss your company’s background. You should also share company case studies, success stories, awards, and accreditations, but try to avoid sharing personal awards and accreditations unless you think doing so is absolutely necessary. Choose what you present to best build trust with your prospect and increase your chances of making the sale.
No business proposal outline is complete without a pricing section – after all, no matter how passionate you are about your work, you do have to get paid. A fee table is likely your best route for sharing your prices since it breaks down your costs by service.
You can also offer several pricing packages and add discounts for additional services as you add more services to higher-tier packages. This structure can make prospects more likely to hire you for services they might otherwise decline.
7. Terms and Conditions
All proposals should end with a terms and conditions section. In this section, you can include terms such as:
- A confidentiality agreement
- A non-disclosure agreement
- A payment amount that the prospect must make to initiate services
- A proposal or services cancellation policy, if applicable
- A firm statement of the date range for which your service agreement will apply
- An expiration date for how long the prices in the business proposal outline are relevant
Additional Business Proposal Considerations
In addition to the above business proposal outline, keep the following in mind as you create business proposals:
- Cater each proposal to each client.
- Develop a buyer persona that you’ll compare and contrast with your prospect.
- Know why you’re sending the proposal, whether to see a sales call through to its logical end or establish your brand with a newer prospect.
For more on these business proposal considerations, read the SmartBiz Loans Blog How to Write Compelling Business Proposals to Win More Clients.
Need funding to rebuild your business? Don’t waste time going from bank-to-bank filling out multiple applications. SmartBiz helps you find the best financing for your unique needs whether that’s an SBA loan, Bank Term loan, or other financing. About 90% of qualified applications we refer to banks are funded and our financial professionals are on hand to answer your questions. Discover if you’re pre-qualified here without impacting your credit scores and read the SmartBiz 5-star customer service reviews on TrustPilot.
*We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.