A business proposal is a bid to attract/woo potential partners, to whom you can sell/share your core competencies and create a mutually-beneficial relationship. Learning to write a business proposal isn't difficult, but to learn how to properly present it and maximize its benefits, you'll probably want to take a few online business classes.
Business proposals can be broadly categorized into two distinct categories:
Solicited business proposals are typically when the initiative is taken by the party who is in need of the product or services to achieve their own business objectives. E.g. a soft drink manufacturer may float a tender inviting companies to provide them with bottling capabilities for their product. In this particular instance the core competency of the company is manufacturing the soft drink, but the drink has to be packaged and then it becomes viable for sale. This is where they need other proficient companies who have the requisite set up to provide them with bottling capabilities for their soft drinks.
Unsolicited proposals are when a company is trying to sell its product or service to a target segment market who they know will require their product or services, e.g. corporate offices require facility management expertise to maintain their premises. This work is usually outsourced to facility management companies who provide a range of facilities right from keeping the premises clean to providing ‘room service’ kinds of facilities. These types of proposals have to be well-researched, as more often than not, the target customers are already availing of similar services from the competition.
Some key points which have to be addressed while writing a business proposal are listed below:
Understand the requirements of the potential business partner
This is the most important part, and in fact, the starting point of any business proposal. More often than not companies desirous of winning bids of partner companies make the elementary mistake of focusing excessively on their own core competency rather than on the requirement of the company who they have bid their services for. This is suicidal; it is as simple as a visit to a doctor. When one visits a doctor, the expectation is for the doctor to understand the ailment one has rather than the expertise of the doctor and his qualifications. A patient is much more at ease and confident with a doctor who has the ability to accurately pinpoint the ailment and then proceed with the treatment.
Similarly it is absolutely imperative for the bidding company to thoroughly research the company to whom the proposal is being made. Some of the things which the bidding company should know about the counterparty are:
- What is the nature of business of the company?
- Behavioral pattern if any, from the past where the company has employed companies for similar services or products.
- If the company is replacing its current business partner, what are the reasons for choosing not to continue with the current company?
- How critical is this particular product or service for this company in its whole scheme of operation? E.g. from the earlier stated example, if a soft drink company is inviting bids for bottling capabilities, this service is very much the core requirement for them. The packaging, look, feel, etc, all go a long way in the successful selling of the soft drink, because it is the visual appeal that will enable the decision of potential consumers of the soft drink.
- Bridge the gap between expectation and what is proposed to be provided.
This is the key element of any business proposal, while the potential company is aware of the product or service it requires, the onus is completely on the bidding company to bridge this gap and ultimately lead to an inference that if they are awarded this contract, they do have the wherewithal to deliver on the requirements consistently.
Understanding the requirement is the key here. Is the potential company looking merely at a cost cutting option or do they want to employ an expertise which they do not wish to cultivate within their organization, or is it a combination of both?
Keep it Simple
The document should be very lucid and should clearly outline the benefits the company will ultimately enjoy, and if there is a possibility of monetary benefits, those have to be highlighted with data.
It is a matter of conviction of being able to provide superior products or services to the potential customer which needs to be conveyed effectively via the medium of the business proposal, which will make an effective business proposal. One has to remember that all bids may not be won, but it’s important to be noticed and considered, which can be only achieved through an effective business proposal.
Now that you have the basics of composing a business proposal down, you may want to consider taking some online business classes - especially in marketing or business management - to ensure that you'll be able to use this information to the best possible effect.