How to craft a compelling business proposal

How to create a business proposal: Best practices and examples

Every successful business throughout history started off as a solid idea. This idea, with time, transforms into your business proposal, which is a document that thoroughly describes the products/services that you offer. 

It takes grit and perseverance to get from idea to execution, and oftentimes, an original idea changes course multiple times on its journey to becoming a true business. 

One thing that most successful entrepreneurs have in common is that they take the time and effort to write a business proposal that has the power to attract investors and win projects. 

Let’s find out more. 

What is a business proposal?

A business proposal is a detailed document that thoroughly describes the products and services your company offers to potential clients. It is used to secure business agreements and includes your qualifications and your competitive advantage, among other things.

The purpose of a business proposal is to create a connection between you and your  potential customer. When done right, proposals help you attract investors, clients, and partners. 

Attracting investors is an important part of starting a business. It is common for entrepreneurs to need capital to get their businesses off the ground, and often, those start-up funds need to come from venture capitalists or angel investors, who can provide significant investment. 

Without a proper business plan, investors will not be willing to take a risk on a new business venture.

So, your business proposal should include: 

  • Your business’ value proposition (in other words, what will attract customers to the business)
  • How the business is different from other competitors on the market 
  • How the business solves a problem for its prospective clients

What is the purpose of a business proposal?

Armed with a professional business proposal, an entrepreneur can:

  • Win new projects
  • Differentiate themselves from competitors 
  • Secure funding from viable investors 
  • Establish partnerships with vendors, clients, influencers, and more

In addition to laying out a plan for external parties, a business proposal can help guide you and your daily operations. 

It’s one thing for an entrepreneur to know where they want their business to end up and what their goals are, but it’s another thing to know the steps to take to achieve those goals. Having a business proposal on hand helps you stick to a timeline and work towards their goals in a logical and manageable sequence. 

Types of business proposals

Unsolicited business proposals

As the name implies, an unsolicited business proposal is one that is sent to a recipient who has not requested it. Think of it as a salesperson making a cold call. 

As a part of the sales process, you can send unsolicited proposals to several recipients with the intention of getting something in return, such as funding, a contract securing a partnership, a sale, or something else that will benefit your business. 

Solicited business proposals

Formally solicited proposals are requested by the person or company receiving them. A common way to think of this is when a client submits a Request for Proposal (RFP) to multiple advertising agencies to discover who is best suited to represent their business. 

An entrepreneur with a novel product offering or service may be solicited by a company that wishes to break their contracts with existing partners or who is seeking new services. 

A formally solicited business proposal gives you an opportunity to win a potential client. 

How to write a business proposal? The key components of business proposals 

In this chapter, we’ll focus on how to write a business proposal to make an impact. You never get a second chance to make a first impression on potential investors and business partners, so you should not take the task of writing a business proposal document lightly.

Every well-prepared business proposal should include these essential elements:

Title page 

A title page introduces you and your business, it includes the company’s name, the proposal submission date, and the name of the person or company receiving the proposal. 

The title page will set the tone for the entire proposal, this is why formatting, layout, and design should be considered. 

Executive summary: Unveil your purpose

The executive summary should provide a generalized overview of what the rest of the proposal will cover. If the person or company receiving the proposal only reads this section, they should have a clear understanding of what the offer or partnership will entail. Consider including a cover letter to capture the attention of your prospective client or partner, and explain why your proposal is beneficial for both parties. 

The executive summary should answer the “What’s in it for me?” question for the recipient. It needs to include the relevant details and benefits of the products or services being offered and how these products/services can potentially solve their problem. 

Define the problem or challenge

This section should be used to go into more detail about the existing problem impacting the potential client. 

If the proposal is meant to secure funds, then this section should include a summary of the general challenge in the market and how your product or service will address that challenge. 

This section is an opportunity for you to demonstrate that you understand their industry’s landscape and have proposed solutions that meet the needs of their intended audience. 

Present the winning solution

If a business proposal had a money shot, this would be it. 

This is your chance to make their product or service shine. Describe the solution in detail and how it will impact the person receiving the proposal. 

This section should be customized for each recipient and tailored to their specific needs. If the proposal is going to an investor, it should be clear how that investor will profit from their commitment to the business. If the recipient is a potential vendor, this section should detail what that partnership will look like, including a project scope, relevant deliverables, and timelines. 

Be specific and detailed. 

Showcase qualifications and proof of concept

A proof of concept can be an incredibly influential selling point. In this section, you should walk the walk instead of just talking about the impact they can make. In other words, explain how you will bring about results. 

If the product or service has undergone beta testing, detail the results. If you  have already assembled a team, introduce each team member, list their qualifications, and showcase how they will work with the recipient. If funding or important partnerships have already been secured, highlight those relationships. 

Transparent pricing

Recipients of a business proposal want to collect as much information as possible before making a decision to invest, collaborate, or walk away. The business proposal is the best opportunity to lay all the cards out on the table and set realistic expectations. 

This section should contain a pricing table highlighting the cost of the proposed services or products. With formally solicited proposals, it’s easier to give specific and accurate pricing since the solicitor will often include parameters such as budget constraints. When sending unsolicited proposals, it might be better to include more general information with the caveat that specifics will be provided once conversations continue. 

Compelling conclusion

At the end of a business proposal, provide an executive summary of your offer and make one last case for yourself. In this section, the proposal should reiterate the customer’s problem and how you will address their needs. 

If the proposal is to act as an initial agreement or contract, then this is where a signature page would go. 

SignNow business proposal templates and examples

When it comes to conducting new business or negotiating contracts, everything is now done digitally with the help of e-signatures.

This is why it is incredibly important to choose a trustworthy and reliable digital partner. Especially with something as sensitive as new business contracts, both business owners and clients, partners, and investors need to feel comfortable and secure signing a digital document. 

SignNow is trusted by millions of people globally to deliver secure, legally-binding eSignatures. And for entrepreneurs just getting started, SignNow offers business proposal templates that make creating business proposals a breeze

Click on the Create button in the top-right corner of the screen, then select Document -> Add from Forms Library.

After that, you will access free business proposal templates that can be added to your SignNow account. Use a sample pre-made business proposal template to create a new proposal template that can be saved, stored, and reused as needed. 

Investors business proposals vs. funding business proposals 

It’s critical to understand the difference when you write a business proposal for funding and investors. 

A formal business proposal for funding is typically used to obtain funding for a specific project or initiative, and it is often submitted to government agencies or private donors. On the other hand, an investor proposal is designed to attract investment from banks, venture capitalists, or other potential investors. 

The main differences between an investment proposal and a business plan are purpose and audience. A business plan considers what the business is selling and why, while an investment proposal focuses on the customer value proposition, the business scalability, the strategic capabilities, the competitive advantage, and its sustainability – all the aspects that will generate and maintain a return on investment.

The ROI component of a business proposal for investors is critical. Investors like to take risks and gamble on new companies – that’s the whole reason they are in the game – but they always want to have a clear understanding of what’s in it for them. How will their risk pay off? How will they benefit if the company is successful? A path to ROI can be the most compelling way to persuade an investor to sign a business proposal

Business proposal for investors

In this business proposal example, a restaurant owner is seeking investors for a new concept in New York. “Investment Proposal” is written prominently on the cover page, immediately indicating the plan’s purpose to the recipient. 

In addition to detailed information about the restaurant and how it would be different from others in the area, there is a financial projections section that lets the potential investor know what kind of earnings they can expect should they decide to take a chance on this establishment. 

Business proposal for funding

A common way that businesses seek funding from government agencies is through applying for grants. You may want this kind of funding for a specific project or initiative, as opposed to needing funding for an entire business.

The above business proposal example is specific to the Green Climate Fund and one particular project. The proposal details financing information, expected performance, a risk assessment, and more.  

Best practices for creating business proposals 

Writing an effective business proposal can be time-intensive and a bit overwhelming, as the stakes are high. You should remember the following best practices when crafting a great business proposal:

  • Create a business proposal outline
    • Starting with an outline helps to keep things organized and on topic
  • Use data
    • Investors, clients, and partners like specifics—they want proof, and they want to see numbers so that they can make the most well-informed decision possible. Using specific data is always a smart idea. 
  • Add lots of visuals to reinforce the message
    • It can be hard to read blocks and blocks of text and truly digest the information that is presented; using images is not only visually appealing but can also help deliver a message in a more impactful way.
  • Use a trusted e-signature partner like SignNow
    • Anyone signing a proposal electronically wants to ensure that their data is safe, secure, and protected—SignNow adheres to strict industry standards and is easy to use 
  • Conduct thorough research
    • When extensive research is done, it shows in the work produced; investors and partners can tell when someone knows what they’re talking about and is as invested in their own product as they’d like someone else to be 
  • Proofread meticulously
    • Grammar and spelling mistakes are sloppy; we are all human, so it’s normal for one or two things to fall through the cracks, but proofreading a proposal more than once is critical in catching unwanted errors 
  • Be clear and straightforward
    • Business proposals are not the time for fluff; instead, being direct, informative, and honest can go a long way in building a trustworthy relationship 

Craft a winning business proposal 

Business proposals are essential for entrepreneurs who are launching new ideas or who want to grow and scale their current business. Proposals are used to lure in investors, funding, clients, partners, and more and are an opportunity to make an impression on the market. 

Without a well-executed business proposal, it is nearly impossible for your business to succeed. 

All business proposals must clearly demonstrate your  business’s value proposition, how you are different from your  competitors, and how you will solve a missing need in the marketplace. 

Create business proposals that shine, close deals faster, and obtain secure e-signatures by partnering with a trusted electronic signature vendor like SignNow. Sign up for a free 7-day trial today.

Create business proposals that shine, close deals faster, and obtain secure e-ignatures by partnering with SignNow.

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