Coming up with a great idea for a new product or service is only the beginning. The real first step in transforming your idea into reality is to create a formal business proposal. You need a business proposal in order to get money from a bank or investment firm to fund your business idea, or to convince your customers to patronize your business. Understanding how a strong business proposal can benefit your company is crucial to it performing well over the long run.
There aren’t any fixed rules as to how to write a formal business proposal but essentially, a business proposal is designed to persuade someone, and what this requires entirely depends on your audience. Here are some of the basic things a formal business proposal should include, and as well as basic guidelines for a compelling and winning proposal.
1. For each section of the proposal, make sure you state the who, what, where, how, when, and why.
- Who – The who states who is responsible for what: who will do the work, who will manage the tasks, who will the customer contact if things go wrong
- What – the what states what needs to be done: what the business can provide, what is required to do it, what services or products will cost, what the customer can expect
- Where – the where addresses where the tasks will be done, where the customer can access the business
- How – the how looks at how the work will be deployed, how it will be done, how it will be managed, how long it will take for products to arrive, how the products or services will benefit the customer
- Why – the why explains the vision of the business and a rationale of why you chose the approaches you selected. The why also states why the customer should patronize your business
2. Know your customer or the bank requirements, and only include exactly what is being looked for, such as details, references, pricing, contractual details, etc. Even the way the information should be presented must be up to the customer.
3. Be clear and articulate in describing your business and why the customer should choose you
4. Recognize your business’s limitations, challenges, and propose ways to overcome these. The bank or customer will appreciate your honesty, and listing down your limitations increases the credibility of your idea.
5. Your references must be relevant to your business and should sing praises for your business idea.
6. Include examples and experience citations throughout the proposal to prove that you know exactly what you are doing.
7. Your pricing data should be accurate and structured properly. Your pricing must be within budget and competitive while meeting your profit goals.
8. Relevant visuals and graphics will also help persuade your reader. Make sure there aren’t too many graphics; your proposal must be easy to navigate.
9. Before sending out your business proposal, proofread carefully for any disqualifying errors or grammatical errors.
This article gives you a great start on what you need to know to write a good business proposal; to learn how to best apply this to your company, it's a good idea to enroll in at least a few online business management courses.