It is not uncommon for those engaged in B2B sales to encounter a situation in which a prospective buyer requests a formal business proposal to be presented before a deal can be made. Ironically, many of the professionals who start B2B businesses have no clue what this type of proposal is – let alone how to write one.
Lacking this understanding and skill for this task can have disastrous effects on a business; a great proposal often proves essential to converting a prospect into a customer. If you have no idea what is a business proposal but face the possibility of being asked to produce one, then the time for you to master the great art of creating this essential sales document is right now.
Why Business Proposals Are Important
What is a business proposal? It is a formal written statement made in response to a potential customer’s inquiry in a complex sale. To gain a better understanding, it might be helpful for you to think of this type of a proposal as a report in which you describe how your business can best meet the needs of a particular customer; one who has expressed in great detail an interest in what your company has to offer. Within the proposal, you expound on your offer, explaining what you can provide, how it matches the buyer’s request, and why you and your team or product is the best pick.
Business proposals are often written as a response to an RFP, or Request for Proposal. The RFP is a written solicitation requesting goods and/or services. Some enterprises invest a substantial amount of resources into the creation of a single RFP (Mittal, 2015). While there are disadvantages to this practice, there can also be a number of benefits, such as making it easy to sort out suppliers or products that are not the best fit for the organization, providing clear guidelines and expectations to potential suppliers before signing a sales agreement, and creating a structured approach for assessing the price, quality, and value offered by various sellers.
RFPs often contain specific guidelines for what the proposal of a successful seller will contain. Buyers can use the RFPs they create as a guide to narrow down their options of sellers by rejecting the proposals of anyone whose proposal does not satisfy the criteria specified. Moreover, the level of professionalism by which the proposal written can be used as an indicator of the service and product quality that can be expected from that seller for the duration of the contract if entered into. In short, releasing RFPs and receiving business proposals is a way for companies to make the acquisition process easier and more effective for themselves, but it can also serve as a hindrance to any seller unable to craft and submit a proper proposal.
Although the mere thought of having to create a written business proposal might be intimidating for some, the opportunity can be perceived as a chance to convert a prospect into a buyer and make a profit – which many sellers find exciting. The first step to creating a winning proposal is to understand the type of information it must contain.
Sections to Include in Your Business Proposal
While the details to include in a proposal may change depending on the information the potential buyer requests, there are five main sections that every proposal should feature, including: cover letter, title page, table of contents, executive summary, and procedures.
Cover letter: This is where the seller introduces themselves and their company. It is also an opportunity for the seller to demonstrate their understanding of the buyer’s company and overall mission.
Title page: This page contains basic information, such as who the proposal is for, who it is from, the date it was created, and, of course, tile of the proposal.
Table of contents: This element is essential for making the document easier for readers to navigate – and maintaining the required level of professionalism.
Executive summary: This section is comprised of a briefing of the entire document, listing the buyer’s requirements, explaining the issue they are seeking to solve through the purchase, summarizing why the seller is the most qualified, and highlighting key elements of the offer being presented.
Procedures: This is often the lengthiest part of the proposal, as it contains all the details about the solution being presented, including quantity, quality, delivery times, milestones, and much more. Not only should this section be used to describe what is to be delivered, but also how it will be delivered, and why the seller thinks the offering is the best fit for the buyer’s needs.
Top Three Tips to Creating a Great Proposal
A great business proposal is one that satisfies the prospect’s questions and successfully convinces them to become a buyer. There are a few steps which prove vital in creating such a document:
The quality of the proposals produced can make or break a seller’s business. For buyers, business proposals make many aspects of the buying cycle of a complex sale much easier, potentially making their projects flow more smoothly and their purchases more lucrative. For sellers, these documents are a way that they can convert prospects into paying customers, proving they have what it takes to be considered the best pick. While there are many standard requirements that apply to just about any proposal, mastering the creation of this crucial sales document can take much practice.
Mittal, P. (2015) “Why A Trillion-Dollar Enterprise Practice Desperately Needs Disruption”. The Huffington Post. https://www.huffingtonpost.com/young-entrepreneur-council/why-a-trillion-dollar-ent_b_7943092.html
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