What Is a Business Proposal?

Business proposals explained

A business proposal is a document that helps you earn clients and partners by describing your business' service and product offerings. B2B businesses write proposals to other businesses, but they're not usually used in B2C companies. Moreover, a business plan proposal outlines your business, including its unique value proposition and how you can solve a problem for your intended audience.

What is a proposal in business? A proposal is how you'll win clients and partners. While they can be written or spoken, a business proposal is always written, allowing potential customers to review and sign it before receiving a contract. A proposal can also be part of a contract if you propose your services and allow clients to agree to the terms immediately.

Business proposals enable you to pitch to prospective clients and demonstrate your value by effectively telling them why they should choose your business over the competition.

Solicited vs. unsolicited business proposals

Business proposals demonstrate how a company can help another company, highlighting the customer's problems and showcasing how the business can help them. There are different types of business proposals, and the type you send to prospective partners will depend on whether or not they sent a request for proposal (RPF).

Two examples of business proposals are:

Solicited business proposal

When prospective customers request a proposal, you'll send them a solicited proposal. Solicited business proposals are either formal or informal, depending on the existing relationship with the prospect.

Existing clients can also request business proposals for different services. In this case, an example of a business proposal would be a customer asking their supplier for information regarding a different service or product than the one they already use. With formal proposals, the prospect must respond within a certain time frame, and if they agree to the proposal, it turns into a signed contract.

Unsolicited business proposal

If a prospective customer doesn't send a request for a proposal, but you want to try to win their business, you can send them an unsolicited proposal. Ultimately, you can send a proposal to anyone using a cold approach to convince them to partner with you. Unsolicited proposals are typically more general than solicited ones because you haven't yet spoken to the prospect about their needs. However, they can still explain what the business does and why someone should partner with you.

How to write a business proposal

Now that you understand the business proposal definition and the 2 types of business proposals, you can start drafting one. Of course, depending on the nature of your business, you might want to start with a general proposal that allows you to fill in the blanks based on the prospects' needs.

Here are some steps for how to write a business proposal:

Develop your cover page

Every proposal needs a cover page that acts as a letter of introduction. It should be brief and explain why you're sending the proposal. For example, if you're sending it because a prospect sent an RPF, you should state that in the letter. You can also refer to past conversations that led you to send the proposal if there wasn't a request, or if you're sending an unsolicited proposal, you can explain why you've decided to send it. Your cover page should be professional, but you can write it in the first person to form a more personal relationship with the prospect.

Make a table of contents

Because a proposal is more than a few pages long, it's always best to list the different pages included. If you're sending your proposal digitally, you can hyperlink your table of contents to make it easier for the prospect to use. Even if you don't hyperlink the proposal, a table of contents is still a common courtesy to help prospects navigate and understand the documents.

Provide an executive summary

An executive summary is a brief chapter in which you describe who you are and why you're sending the proposal. Your summary can cover the different types of services you offer, team members, and the benefits of your services for the prospect. Always focus on the problem you're trying to solve. For example, if you run a marketing agency and a prospect asks about your social media marketing services, you can discuss the different ways you can boost your prospects' engagement and visibility online.

Create the main body of your proposal

The main body of the proposal should have all the information a prospect has asked for, including:

• A statement of the problem
• Your proposed solution
• Methodologies
• Approaches
• Qualifications
• Timeline

If you have goals in mind for what you're trying to achieve for the client, you can list SMART goals in the body of the proposal to help clients understand how results will be measured. Try to be as specific as possible when addressing your solution to ensure the client understands what you plan to do for them. If you're responding to a customer's request for a proposal, it's a good idea to incorporate everything they discussed in their request.

Highlight pricing

Understanding your pricing is key for potential customers, so you'll need to highlight how much your services cost. If your business proposal is solicited, you may have all the information you need to form accurate pricing. However, if you're sending an unsolicited proposal, you might send more general pricing and ask to discuss pricing in depth after your initial conversation with the client.

Your pricing chapter can also contain payment terms, such as when you'll send invoices and how long customers have to pay them.

Determine your terms and conditions

Your terms and conditions are where you can state the project's expected duration, payment methods, scheduling, and other expectations for the client. Your contract may also outline milestones throughout the relationship.

Write a conclusion

The conclusion summarizes the business proposal, reiterating the customer's problem and your solution. You should also thank them for their time whether or not they choose to sign the contract.

Leave room for signatures

Depending on your agreement procedure with the client, they can either sign your proposal or send you a letter of acceptance. Not all proposals need room for signatures. For example, unsolicited proposals that are more general should not be expected to be signed by the prospect and may even put them off of speaking with you because it adds pressure.

However, solicited proposals should have a place for signatures since you've likely already had a conversation with the client or they've sent you an RPF.

Best practices for business proposals

Understanding all the elements of a business proposal is important, but you need to make yours stand out. Clients who send RPFs will likely send requests to multiple agencies or companies, so you can expect some competition.

Here are the best practices for making your business proposal stand out from your competitors.

• Make an outline. Outlining your proposal can help you get organized and understand all the pieces of information you need to share.
• Leverage data. Using data to help you demonstrate why a company should work with you can help you win their business because it shows proof of your success. You can also use testimonials from previous clients and partners.
• Include visuals. Visuals make it easier to understand the messages your proposal is trying to convey. It will also allow you to add color to the documents, making them stand out from any other company that writes a few pages of text for their proposal.
• Use digital signatures. The easier you make signing your proposal, the more likely a client will sign it. If a client has to go out of their way to sign your document, they might forget about it or move on to a proposal that's easier to finalize.
• Conduct thorough research. Before you write your proposal, you should understand your client's pain points. This may require you to do industry research or have multiple discussions with the prospect about their needs.
• Proofread carefully. If you want your documents to be professional, it's good practice to proofread before you submit them to the client. Let multiple people within your organization review them for accuracy and grammar.
• Be straightforward. Prospects want to know how you can help them. If your business proposal is confusing, you won't earn their business because they'll think working with you will be confusing. Your business proposal is one of the first impressions of your business, so it's always best to be as straightforward as possible.

Business Proposals: Key takeaways

You can find many business proposal examples online to help you understand how other companies in your industry win new business. However, you can also send competitors RPFs to see how they write their proposals and brainstorm ways to make yours stand out. Once you're ready to send your proposal, you can use Mailchimp's content tools and email marketing templates.

Mailchimp makes it easy to market your business by giving you all the CRM tools your business needs to manage prospects and proposals. Whether you're sending a new client a proposal for a service or you're cold-emailing companies you think would be a good match for your business, we've got you covered.