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What is a Business Proposal?
A Business Proposal is a document you send to prospective clients with the goal of obtaining a specific job. Business Proposals can be sent unsolicited to try to gain new clients, or you can send one in response to an official or unofficial Request for Proposal.
A Business Proposal can also be used in the process of seeking funding from investors to support a specific business need. It includes routine information such as your company's address, business description, executive summary and market advantages, which you can likely pull from your Business Plan. But you'll also need to respond uniquely to the parameters of the job or business need.
Whatever the case, Rocket Lawyer can help you easily create a Business Proposal with our online template. Get started now!
When to use a Business Proposal:
- You are a business owner trying to obtain a client job.
- You were asked by a client to provide a Business Proposal during the sales process.
- You are seeking funding for your business from investors.
- You are trying to find a partner for your business.
Sample Business Proposal
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Prepared for:, located at , , ,
Prepared by:, located at , , , .
Description: is seeking funding from for . The funding request, market analysis, and return of investment analysis of the project are included in this Proposal. is seeking the flexibility, guidance and funding of for growth of business in order to benefit both the parties.
Executive Summary
The purpose of this proposal is to forge a strategic relationship between and to leverage the customer base for 's newly developed product.
The Business has developed a new which has the following specifications and advantages over similar products in the industry:
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The Business has a window of opportunity to introduce its products and gain a significant piece of the market share. The new product/service caters to a wide range of customers and is expected to hold a market share of %.
Project Description
The project will be completed at follows:
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is planning to .
Sales and Marketing Strategy
The main target markets for the business include:
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It is estimated that there are potential customers within the Business's defined trading area that are estimated to spend . To seek the most profitable market segments in the target markets overall, the Business will focus on the following areas within the target market:
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Financial Summary
The Business is expected to generate in the first year and gross profit is expected to be . Out of the gross profits % will be earmarked to pay back loans. will also get a share of profits generated every year, which shall be determined on a consensual basis. Fixed costs are limited to our office space and equipment lease at per month. Variable costs include repair and maintenance, sales and marketing expenses. Regular monthly expenses are estimated at for paying the employee salaries and meeting the administrative costs.
Closing Section
Future growth prospects are extremely positive for the new business venture. The strategic partnership between and should ensure a % of increase in the total revenue from the new business.
About Business Proposals
Learn about how to send prospective clients a proposal for business
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How to use a Business Proposal to respond to a Request for Proposal (RFP)
If a company or government entity has sent your company a Request for Proposal, they want to know exactly how your company can satisfy their needs. They want to know much more than just the bottom line. Often, organizations – especially government entities – are required to go through a thorough bidding process and will ask for proposals from many of your direct competitors.
Response Tips
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Understand the customer's needs. Each client has specific needs and different ways in which you can help them. Your potential customer wants to see how you can address their unique issues, not a generic version of how you would solve the problem. You may even benefit from simply printing the Request for Proposal and going through it line by line to ensure you meet every request.
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Do not underestimate the unknown. An experienced company will know how to best anticipate and avoid common issues and project changes. The ideal scenario is most often not what actually ends up happening. Show the client how you can manage typical issues well.
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Don't underbid. While it may be tempting to lower your bid to get the job, the price is not always the deciding factor on how your client may determine who wins the bid. Include in your Business Proposal a fair market price that doesn't cause you to short-change yourself. The cheapest is not always the best, and clients know this, so you are not necessarily doing yourself any favors by bidding unusually low.
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Edit your proposal. The proposal should be easy to read and understand. Your value should be obvious, realistic, and simple to envision. Ask a colleague or non-interested party to review the proposal for clarity and obvious errors. If necessary, you can ask the editor to sign a simple Non-Disclosure Agreement (NDA) to protect your proprietary interests. If you have legal questions, reach out to a Rocket Lawyer network attorney for affordable legal advice.
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Include additional resources. Often it helps to include supporting documentation such as organizational charts, graphs, images, and references. If you are chasing a large contract, it is worth your time to put extra energy into your proposal. Make sure the basics of the document are clear and that the additional information is supportive rather than distracting.
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Be prepared. Sometimes you will be given a short deadline. You can speed up your response time by having a template with your basic information already created. You'll also benefit from carefully saving copies of proposals you have submitted in the past. You can use proposals sent to similar clients as a reference for making a quick Business Proposal.
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Business Proposal FAQs
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What are the key elements of a Business Proposal?
A Business Proposal includes routine information such as your company's address, an executive summary, and descriptions of the costs and benefits, and the market advantages. Your basic company information can likely be pulled from your Business Plan. But you'll also need specific information about the proposed job or business need.
Key points to consider:
- Market gain: If you are communicating with investors, they'll want to know what percentage of the current market you estimate to gain.
- Project description: Include a general description of the project, the steps to complete the project, and why your company is suitable to complete the project (or provide the service needed).
- Sales and marketing: If proposing to investors, say how you plan to increase sales and how your marketing strategies will facilitate sales.
- Financial summary: You will need to include information about projected incomes, profits, and operating costs. Investors will want to know how you plan to share profits with them.
Business Proposal vs. Business Plan
These two business documents are often seen in each other's company, bu t they are not the same thing. However, they do cover some of the same key elements, such as product or service descriptions, market information, and financial projections. While a Business Plan shows the overall vision of the company, a Business Proposal focuses on a specific objective. Typically, the objective of a proposal is to win a bid for a specific job or to acquire funding from an investor. If you have a comprehensive Business Plan, you can use elements from it to create Business Proposals.
We have detailed everything you should consider to write a good Business Proposal in our How to Write a Business Proposal guide.
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What is the difference between an estimate and a Business Proposal?
An estimate is a less formal document geared towards customers that only includes a few details such as billable hours, costs, and other pricing information. It is often used for lower-priced jobs. A Business Proposal includes many more details and needs to show not just the cost but how your company plans on completing a project or satisfying supply needs. It is often used for larger projects or long-term service agreements.
Rocket Lawyer offers many different types of documents for small businesses. If you need other types of forms and documents, check out our library of essential documents for running a business. If you need a simple Bid Form rather than a Business Proposal, we also provide a Bid Form template.
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