Business Plan vs. Business Proposal
The terms “business plan” and “business proposal” are sometimes used interchangeably, however, they are very different. The main difference between a business plan and a business proposal is that a business plan documents your growth strategy while a business proposal is a specific ask for someone to take an action you desire (e.g., buy your product/service, invest in your company, partner with you, etc.).
In this article, we will define a business plan and a business proposal and give you examples of when each is appropriate for you to use.
What is a Business Plan?
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Business Plan Structure
Typically, the business plan structure contains the following 10 components:
- Executive Summary
- Business Description & Overview
- Market Research & Analysis
- Customer Analysis
- Competitive Analysis
- Marketing Strategy & Plan
- Operations Plan
- Management Team
- Financial Projections & Plan
It is recommended that a business plan is updated annually to adjust for changes in the industry trends and the business itself.
What is a Business Proposal?
In terms of what you are asking from them, it can be anything that involves funds and time on their end including cash investment, product development assistance, and even employees if they have applicable skill sets.
Business Proposal Structure
An invited business proposal is written in response to an RFP. A request for proposal (RFP) is a document that invites potential suppliers to submit business proposals. How to write a business proposal depends on the format requested and the questions included in the RFP.
The following are the components that usually make up a business proposal:
- Brief description of your company’s services/products as the proposed solution to the goals of the RFP
- Reiteration of the scope of the particular project
- Responses to questions asked in the RFP
- Cost of the project, including drafting services, materials, tools, labor, delivery and other expenses
An unsolicited business proposal is essentially the same format, but it will solicit the client’s business while anticipating the clients’ concerns and issues. A business proposal is more of a marketing document than an offer because it attempts to persuade the potential client to do business by demonstrating your value proposition and a call to action.
So, What’s the Difference Between a Business Proposal vs. a Business Plan?
In a business proposal, company representatives typically work with the customer to tailor a business proposition that is attractive to both parties. This usually comes in the form of a written document detailing the services and cost associated with fulfilling an offer or request but can also include electronic contracts.
In contrast, a business plan is a description of your company on the executive and operational levels aimed at investors for raising financial support or other stakeholders in order to facilitate long-term growth. For example, an investor will want to know about how different departments within your business interact with one another, while somebody who will be implementing your product probably only needs more limited information such as design specs because they are not going into production themselves.
A business proposal may provide you with more details of the project, but it does not include information about your company’s operations or future plans.
Examples of Business Plans vs. Business Proposals
- When you give a potential investor your business plan which includes all sorts of information about how we will achieve your goals together as well as the amount of money it’s going to take. The business proposal is for them to write you a check in return for interest/principal payments or a percentage of your company.
- You might be getting partners involved in your business who will help with product development and distribution. You are offering them a business proposal to work together. However, they may request to see your business plan to better understand your goals, potential profitability, and how you plan to reach these goals before deciding to work with you.
- Your existing business has been so successful that you decide to outsource the social media marketing efforts to a freelancer to free up more of your time. The freelancer would provide a business proposal stating their terms and conditions along with the agreed-upon pay arrangement for their services. This change in organizational structure may be noted in your business plan to demonstrate expansion and financial stability to continue growth.
- In your business plan , one of your goals is to grow your client base by 5% each month. You identify potential clients in need of your services or products and send an unsolicited business proposal to demonstrate how your products or services can benefit them in order to develop a new prospective client list.
The business plan is a roadmap for your company’s present and future, while the business proposal has to do with what you are asking someone else for money. Applying this difference into practice can be difficult at times because business plans are often marketed as business proposals. However, it is important to be able to identify the difference between a business plan and business proposal in order to maximize their effectiveness and importance with potential investors or partners.
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The difference between a business plan and a business proposal
Whether you are in business, employment, or college pursuing a degree, understanding the basics of a business proposal is a skill that you must have. Most people use the terms business plan and business proposal interchangeably. These two documents are very different. A business plan is different from a business proposal in terms of content, structure, writing style, goals, and purpose. The most important difference to note is that a business plan is a written presentation of fact while a business proposal is a price quote and a call to action.
According to an article on Entrepreneur.com , a business plan is a document that outlines a detailed description of how a business is set up. It is a 5-year plan of a business showing the company structure, products and services, market findings from research, marketing strategy, planned budget and financial projections. It can be simply defined as the factual and wide description of a business and its projections. A business plan can be drawn by a start-up as well as a going concern.
A business proposal is a purposeful sales document formulated to illustrate how a business will carry out a project, give the value of the project to the prospective client and ask for the client's business. Therefore, it is a document that a business submits to another enterprise or organization putting forward a business arrangement.
A business plan ideally comprises three elements: description of the business model, the marketing strategy and financial projections. It includes informative sections, specifically the executive summary, business description (products and services), marketing plan, industry analysis (competitor analysis), build-out plan, internal analysis, operations plan, leadership structure or introduction of management, and financial projections -- discussion of financial concern and projection of results. The opening page is the executive summary. It can be an intense abstract or a detailed but precise marketing tool to draw interest in the plan. The business plan is an informational document intended to factually showcase the company's operations, goals and potential.
According to Sean Kerner from Tech Republic , the format of a business proposal depends on whether it solicited or unsolicited (See reference 1). A solicited proposal and in response to an RFP should take the format called for in the RFP. Usually, this entails a quick description of the services and products offered by your business and clearly showing their relevance to the goals of the RFP, a replication of the scope of work, response to specific questions raised in the RFP and a quotation detailing materials, equipment, labor, delivery and other basics of the project outlay. An unsolicited business proposal may or may not take the same format. The intention is to create and develop a business opportunity, and so it is advisable to follow the same format or any other that is popular with the industry or business. Be keen to address all the questions that the potential client might have. With an unsolicited proposal, it is up to you to decide the structure. Whichever format you choose, ensure that the proposal is professional, highlights key areas of interest, presents a value proposition, is thoroughly researched and loaded with facts and with a call to action.
A business plan is required for two main reasons. It clearly defines the scope of the business and in the process clarifies your thinking as the proprietor of the business. It offers you information that had not been considered previously. Simply put, it documents the vision of the business and how it will be achieved. This guides the business towards a practical strategy to guide the business for the time-frame enclosed by the plan. It is the blueprint to success of the business. It outlines strategies for converting the ideas into core competencies. It also presents the financial projections of starting and operating the business as well as estimation of revenue generation from business activities. Secondly, it offers comprehensive business information for use by potential investors and employees, suppliers, accountants, attorneys and other stakeholders. The primary function for a business plan is to record and pass on information.
A business plan is also used to raise funds in form of a business loan, venture capitalist, angel investors or incubation. When approaching these money lenders you must present a thoroughly researched and realistic business plan. The investors need to be sure that you are confident and truthful about the market statistics and financial projections indicated in the report. A business plan should be as truthful as possible because it is the blueprint and vision of the company. It provides a checklist of whether the objectives of the business are on track. According to experts, a professional business plan requires about six weeks of in-depth research and preparation. It is not possible to whip one a day before your appointment with investors.
The reason for a business proposal can be well explained based on the type of the proposal. There are two major types of business proposals: invited and non-invited. An invited proposal is submitted in response to an advertisement from the buyer or client. For instance, organization and government agencies wanting to purchases services and products from private suppliers invite contractors to place their bids. Alternatively, some businesses ask for Request for Proposals (RFP) from a selection of suppliers that they willing to consider as a prospective partner. In each case, the business is competing against other bidders. It is in the interest of your business to present a competitive and compelling business proposal.
Non-invited or unsolicited proposals are submitted to potential clients even when they have not requested for one. In this scenario, you give suggestions to the company or organization to purchase services or products in return for funds. For instance, you can tender a proposal to develop an app for an organization or training services for its staff. The most important thing in both cases is to come up with well researched offer to convince buyers. A business proposal is limited to the scope of the specific project or need. In addition, it has a specific audience. The primary function for a proposal is to solicit or grow a business opportunity.
You can look a business plan as more of an internal document. A proposal on the other hand is an external document used for presenting or selling the business to an external player. A business plan guides the activities of the business internally in terms of marketing strategies and revenue projections that should be achieved. A proposal shows the external players such as governments, donors or business partners what the business is all about and how it intends to carry out a project at hand or use the opportunity to generate revue for both partners.
For more information, here is an article on how to write a business proposal .
Tech Republic: How to Respond to a Corporate RFP https://www.techrepublic.com/article/how-to-respond-to-a-corporate-rfp/5031142/
Entrepreneur.com: An Introduction to Business Plans https://www.entrepreneur.com/article/38290
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Proposal writing tips, successful business proposal strategies for small businesses in 2016, business proposal template - how to write a business proposal, a business proposal checklist to help you win more clients, headquarters.
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Business Plan and Proposal: Everything You Need to Know
A business plan and proposal are two different documents with two different purposes and functions. 3 min read
A business plan and proposal are two different documents with two different purposes and functions. A business plan is a document that clearly spells out how a business intends to realize its objectives and goals, while a business proposal is a sales document that a business entity uses to request a contract from a client.
Business Plan vs. Business Proposal
A business plan and a business proposal are different from each other by content, goals, writing style, and structure. The major difference between both is that a business plan is a document that presents facts, while a business proposal is a request for a deal and a quotation of prices.
A Business Plan
You can think of a business plan as the documentation of a company's grand vision. Business plans are naturally tactical. It's like stating where and when you want to start, when you want to get to the next point in view, and how you intend to accomplish that progress. A business plan includes descriptions of how the business is intended to run, the details of financial goals, possible business rivalry, marketing strategy, executive summary, and other factors that affect a company's planned business growth.
A business plan is particularly effective in making potential investors interested in a company (especially a startup company that's yet to make a name in its industry). Additionally, a business plan can provide an idea of what a company requires for professionals such as attorneys, accountants, and potential employees. A business plan distinctly describes the scope of the business, and in so doing, clears your thoughts as a business owner.
The business plan should be honestly made because it's the outline of the company's vision. It indicates whether or not the business goals of the company are realistically achievable. Experts say an effective business plan would take approximately six weeks of thorough research and groundwork to create. In other words, you typically can't create an effective business plan in one day, present it to potential investors the next day, and achieve desired results.
A Business Proposal
A business proposal goes to a prospective client directly from an established business. It's an attempt to sell a business entity's service or product to a client, and not an attempt to sell the business itself. Also, a business proposal isn't an estimate. Though costs and certain other details will be provided in the business proposal, an estimate is a lot more unofficial and simply a provision to skim over the costs. It doesn't present the entire picture.
Basically, business proposals show a particular idea, such as a new, profitable undertaking. The proposal is intended to get investors to support the particular business endeavor being suggested. For instance, a well-known eatery chain may wish to extend its business to a nearby state. Such an eatery would have to compose a business proposal in order to get the financial support of its target investors.
Though the business proposal provides an overview of what the company does (similar to a business plan), its major objective is to provide the details of the suggested business idea, including providing answers in advance for any concerns that could be raised by potential investors.
Components of a Business Plan
Basically, a business plan has three components: business model description, sales tactics, and financial goals. However, more elaborately, it has the following sections of information:
- Executive summary
- Description of products and services
- Industry analysis (analysis of possible business rivalry)
- Marketing strategy
- Operating plan
- Structure of leadership
- Internal analysis
- Built-out plan
- Introduction of management
- Financial goals (deliberations on monetary concerns, and how to address them and achieve expected results).
Solicited vs. Unsolicited Business Proposals
A solicited business proposal, when presented in response to a request for proposal (RFP), should be in the format requested by the client in their RFP. The same format may or may not be used for an unsolicited business proposal. Its purpose is to suggest and develop a business idea. Therefore, it's recommended to use the same format or some other format that's well-known in the field of endeavor.
An unsolicited business proposal offers a business entity the flexibility to choose what structure they deem appropriate. However, the proposal is expected to meet industry standards, no matter what format is used. For instance, it should emphasize major areas of interest, be thoroughly researched, offer a proposition of value, and feature a call to action.
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The Difference Between a Business Plan and a Business Proposal
A business plan and a business proposal are very different documents. If you do an Internet search for how to write a business proposal, the results are predominantly focused on writing a business plan. Nevertheless, the two documents have different purposes and goals. A business plan is a factual broad description of a company and its prospects. A business proposal is a focused sales document intended to describe how a company will approach a project, state the value of the project to the client, and solicit the client's business. A business plan is a written presentation of facts. A business proposal is a quote and call to action.
Reasons for a Business Plan
A business plan documents your vision for your business and how you intend to achieve that vision. It contains financial projections of what the business will cost to develop and operate plus an estimation of the revenues to be generated. Its purpose is to provide a reasonably detailed explanation of your business for use by potential investors, suppliers, prospective employees, accountants, attorneys, and other people who need a quick but comprehensive understanding of what your company does and its potential for success. The primary reason for a business plan is to record and convey information.
Reasons for a Business Proposal
Proposals may be unsolicited business ideas presented to a potential customer or partner, or they may be answers to requests for proposals submitted to your company by a potential client. They are limited in scope to a particular project or need. A business proposal also generally has a specific audience. The primary reason for a business proposal is to solicit or develop a business opportunity.
Business Plan Structure
A business plan has three elements: description of the business model , the marketing model, and financial projections. It consists of informative sections, including the executive summary, business description, marketing model, analysis of industry competition, build-out plan, operations plan, the introduction of management, and a discussion of financial issues and projection of results. It is introduced by an executive summary, which can be a dense abstract or a longer marketing tool to attract interest in the business plan. The business plan is an informational document designed to factually display your company's operations and potential.
Business Proposal Structure
A business proposal is written in response to an RFP--A request for proposal (RFP) is a document that solicits proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service or valuable asset, to potential suppliers to submit business proposals --should follow the format requested in the RFP.
Generally, this involves a quick description of your company's services and products that are relevant to the goals of the RFP, a reiteration of the scope of work, answers to specific questions posed in the RFP and a quote detailing materials, tools, labor, delivery and other elements of the cost of the project. An unsolicited business proposal intended to create and develop a business opportunity follows essentially the same format but anticipates questions the potential client might have. A proposal is more of a marketing document, designed to convince the audience to do business by presenting a value proposition and a call to action.
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Business Proposal and Business Plan: What’s the Difference?
Posted by Abbey Claire Dela Cruz | Aug 16, 2022 | proposals | 0 |
Business proposal and business plan are relatively similar but distinctively different terms, making many use these two words interchangeably.
You’ll see distinguishing features in their content, structure, writing style, purpose, and goals. Even so, there are various similarities between a business proposal and a business plan.
The main distinguishing factor to note is that a business proposal documents the growth strategy and presentation of facts, while a business proposal is a specific ask for an individual to take action (buy your service/product, partner with you in business, and invest in a particular business) .
Let’s look at the two terms in detail and highlight a few examples when it’s appropriate to use.
What is a Business Proposal?
A business proposal is a company’s documentation that goes directly to its prospective. It’s usually written in an attempt to sell a company’s product or service.
While a business proposal is not an estimate, it’ll have certain financial details. An estimate is unofficial and simply a way to skim over the real costs without presenting the real picture.
In a nutshell, a business proposal shows a particular business idea intended to get investors to support this particular endeavor being suggested.
Although a business proposal shows an overview of what the company does (just like a business plan), its main aim is to provide information about the suggested business idea.
It answers any questions or concerns potential investors may have about the suggested business idea.
Prospero business proposal generator can help you easily draft a competitive and compelling proposal to beat other bids. With its user-friendly interface and various proposal templates , you don’t have to create everything from scratch.
Let’s now look at the importance of a business proposal and a business plan.
Reasons for a Business Proposal
The main reason a proposal is written can only be understood based on the type of proposal you want to draft. They’re two types of proposals; invited and non-invited proposals.
An invited proposal is submitted in response to an advertisement from a potential client. A good example is government agencies inviting contractors to bid on a particular service.
Alternatively, businesses request a proposal from a group of suppliers they’re willing to consider as prospective clients.
Non-invited proposals, on the other hand, are submitted to potential clients even when they haven’t requested one. In both instances, a company must develop a compelling proposal to convince buyers.
Proposals are limited in the scope of a particular need or project and written to specific audiences.
The main reason why businesses write proposals is to solicit or grow company opportunities. You can think of a proposal as an external document to present or sell the company to external players.
It shows what the business is all about and how it intends to carry out a particular project or use that opportunity to generate revenue for both parties.
What is a Business Plan?
A business plan is a factual description of a company on the operational and executive levels. It’s a written presentation of a company’s grand vision.
The document is typically tactical; it states where and when you want to start a project. Moreover, it will highlight when you’ll want to move on to the next phase of the project and how to accomplish that project.
It makes potential investors interested in a company (especially small startups that haven’t made a name for themselves).
A business plan will also provide an idea of what the business requires from professionals, such as attorneys and potential employees. It indicates whether or not a company’s business goals are realistic, let alone achievable.
Reasons for a Business Plan
Business plans are visions for your company and how you intend to execute all these visions. They outline financial projections of what a business will cost to develop and operate, plus an estimate of the revenues the business will generate.
Its main purpose is to provide a reasonably detailed description of the company for use by potential investors, suppliers, accountants, and prospective employees, among other people.
Moreover, it’ll provide a quick but comprehensive view of what your company does and its chances for success.
The main reason companies write business plans is to convey and record information.
Structure of a Business and Plan Proposal
Here, the two documents have various components featured on them. Here’s a detailed description of their structure below:
Structure of a Business Proposal
Overall, the structure of a proposal will depend on whether it’s solicited or unsolicited.
A solicited proposal responding to a request for proposal takes the format of an RFP. Here are the components of a business proposal:
- Usually, it takes a quick description of products and services relevant to the RFP goals.
- Outlining the company’s scope of work.
- Answers to questions posed in the RFP.
- Estimate detailing tools, materials, labor, delivery, and other elements that’ll affect the project’s cost.
An unsolicited proposal to create a business opportunity follows the same format. It, however, anticipates questions potential clients might have .
A proposal is a marketing document designed to convince prospects to do business by presenting a value disposition plus a call to action.
Try creating your business proposal here .
Structure of a Business Plan
A business plan has three components; sales tactics, business model description, and financial goals. More elaborately, it consists of the following section of information:
- A summary of the executive
- Product/service description
- Industry analysis
- Operating plan
- Marketing strategies
- Internal analysis
- Built-out plan
- Structure of leadership
- Introduction of management
- Financial goals
The business plan is more like an information document displaying the company’s operation and potential.
Many companies fail to follow this format while writing their business plan or proposal, a reason why most don’t win bids or prospective clients.
Using Prospero to write a professionally compelling business proposal and integrate your business plan can help you get investors interested in your company so that they want a sit at the table.
What’s the Difference Between a Business Plan and a Proposal?
Business proposals differ from business plans in content, writing style, purpose, goals, and structure.
The sole distinguishing factor between the two terms is that a business plan is a factual presentation of facts, whereas a business proposal is an external market document that highlights a quote and a call to action.
Let’s look at some distinguishing features between the two terms:
Business Proposal vs. Business Plan
A business plan provides a detailed description of how the business was set up, plus its project.
On the other hand, a business proposal is a purposeful sale document illustrating how a business will execute a particular project. Usually, it’s drawn and submitted to another enterprise or organization putting forward a business arrangement.
In addition, the structure of a business plan contains three elements, including a description of the business model , sales tactics, and financial projections.
On the other hand, the structure of a business proposal takes the format of an RFP if it’s solicited.
A business plan shows the scope of a business and, in turn, clarifies your thinking as a business owner and also gives you information that you hadn’t considered before.
Conversely, proposals show a limited scope of a specific project or need for a particular audience.
While trying to craft these two documents, you must seek proficient experts to help you write compelling proposals and plans to convince potential investors and other partners to invest in your business.
Types of Business Plans and Proposals
A business proposal can be divided into solicited and unsolicited proposals. How different are they? Let’s delve right in.
This is presented in response to a request for proposal (RFP). It’s usually submitted responding to a work statement from sponsors.
These sponsors use the request for proposal to solicit a specific proposal for research, training, or to provide services or goods. The RFP includes standard terms, conditions, and assurance that the company is asked to accept.
A good example is when an organization or government agency wanting to buy products or services from a particular sector invites contractors to place bids.
In other scenarios, some businesses will ask suppliers to provide RFP to those they’re considering a partnership with.
The business is competing against other businesses that want to secure the same contract. It’s, therefore, in their best interest to provide compelling and competitive business proposals.
Prospero can assist you in such instances; it has the experience and expertise to curate excellent proposals that win contracts. Call it today to generate a proposal with its Prospero business proposal generator .
Unsolicited Business Proposals
This proposal is submitted to potential clients, even when they haven’t asked for one.
In such circumstances, a business wanting to secure a contract will suggest a product or service to a potential organization in return for funds.
A good example is when an organization tends a proposal to develop an application or renders some training services to its staff.
Just like solicited business proposals, a company must curate a well-researched proposal that will convince prospective clients you’re the right candidate for the job.
Types of Business Plans
Business plans are also categorized into four types, including
- short plans,
- presentation plans,
- working plans,
- and what-if plans.
These types require different degrees of labor and are not always proportional to results.
Using PowerPoint to outlay information about a business changed the way companies created their business plan. Many businesses lose sleep trying to figure out how you’re going to present a business plan that can affect a company’s future.
This is a plan used to operate your business. The plan can be long in detail but shorter in presentation. There’s no room for informality or candor while preparing it.
If you’re considering presenting this plan to a loan committee, you’ll have to describe a competing rival primarily on a price basis.
A working plan used to create outlines for internal use may have some elements omitted; probably, you’ll not need to add an appendix with a resume of key executives.
Internal policy considerations may guide what to include or exclude in the working plan.
A business must prepare for unforeseen circumstances. The company may want to have a contingency plan when seeking bank financing.
This plan is usually curated in the worst-case scenario that you can foresee your business surviving. It’s important to shelter yourself from things like loss of market share, the defection of a key member of management, and heavy price competition.
A contingency plan can help cover the fears of bankers and investors by demonstrating that your business has considered more than one rosy circumstance.
Moreover, your business can benefit from a what-if plan in situation acquisition. It can help you outline the worth of the acquisition and how it can affect the core business.
In summary, you can say that a business plan is more of an internal document, whereas a business proposal is an external one that is used to sell the product or service of a company to prospective clients.
In addition, a business plan guides the activities of a company internally in terms of revenue projections and marketing strategies that must be achieved in a particular time frame.
On the other hand, a business proposal will show external parties like a government agency and sponsors what the business is all about to convince them to invest in your business. The proposal should outline how you will carry out a particular project to generate revenue.
Whether trying to curate a business plan or proposal, it has to be compelling and competitive to beat other bidders.
Why Not Give Prospero A Try?
Working with Prospero to generate professionally written proposals or plans is essentially wise. It has a variety of templates for different industries and comes with a lot of customization options. Some ready-made content are also available so you won’t need to write from scratch every now and then.
You can manage and track the performance of your proposals through its built-in analytics, so your sales team would be more productive and efficient.
It’ll increase your chances of securing contracts and proposals that can take the business to the next level.
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About The Author
Abbey Claire Dela Cruz
She is the Marketing Manager of Prospero. She specializes in content writing, marketing, and SEO.
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Business Plan vs. Business Proposal: What’s The Difference?
“Ok, so you sell things.”
Well, honestly, I wasn’t surprised or peeved at the half-baked knowledge of my friend’s father when he made a snap judgment and conveniently labeled my marketing profession as sales.
After all, this wasn’t my first time when someone tagged me as a salesperson. So, I took a deep breath and explained to him how sales are different from marketing.
We, humans, dwell in a herd mentality and hone our word skills from our surroundings. Sometimes, we are simply careless, sometimes oblivious, but most of the time, we actually don’t know that the word has a different meaning.
This can be ignored in a casual conversation, but using the wrong words in a business space can change the implied meaning and lead to miscommunication. For example, cost vs. price , digitization vs. digitalization , warranty vs. guarantee , machine learning vs. artificial intelligence , etc.
“Don’t use words too big for the subject. Don’t say ‘infinitely’ when you mean ‘very’; otherwise you’ll have no word left when you want to talk about something really infinite.” – C. S. Lewis
This Process Street guest post untangles the confusion between two crucial terms – business plan and business proposal. These are used interchangeably in the business world, but their meaning and application are pretty different.
Words are the building blocks of communication. There is a French phrase for using the right word – le mot juste .
Let us strive for le mot juste !
Hop on and be a part of this fantabulous journey.
What is a business plan?
What is a business proposal, difference between a business plan and a business proposal.
- Bonus: How to make ‘wow’ business plans and business proposals?
Winding-up: Key takeaways
Here we go! 🚀
A business plan is a formal guide that acts as a blueprint, deciphering every root and branch to make a business successful. It is a written document that provides insights to internal and external stakeholders on business vision, goals, and strategies to achieve those goals.
“Without a plan, even the most brilliant business can get lost. You need to have goals, create milestones and have a strategy in place to set yourself up for success.” – Yogi Berra
A business plan, at its core, is an explanation of the below questions –
- Who are we?
- What are our offerings?
- Who are our customers?
- Who are the competitors?
- What is our competitive advantage?
- What are the business projections?
- What is the roadmap to achieve the goals – marketing, operations, research and development, manufacturing, and financial plans?
- What are the funding/investment requirements?
- What is the return on investment?
Why do you need a business plan?
A business plan is not a bag of puffery statements. It is a document with factual information necessary for the survival of a business. You can create a business plan with the right tools or opt for a good business coach to get you started.
Let’s see what Tim Berry , business plan expert, founder and chairman of Palo Alto Softwar and bplans.com , has to say on business plans.
“What I love most about business plans is the business planning: like walking, it’s constant correction and review and revision. Planning, done right, is steering a business, managing growth, aiming the business towards the right future.” – Tim Berry , Small Business Trends
According to a study done by Palo Alto Software, those who create business plans double their chances to succeed in business .
Record and present business information 💾 The primary intent of a business plan is to record and communicate information. It must document the business goals and the methods to attain those goals in a structured manner. It keeps businesses on track with their objectives.
A blueprint for seeking business investment 🗄️ Whether you are a fledgling start-up or an established business seeking expansion or diversification, writing a winning business plan acts as a magnet to attract investors. It builds confidence and trust among investors about the lucrativeness of a business idea.
Lay down the right path ✔️ Not everything discussed verbally at an ideation stage transforms into reality in a pragmatic environment. Jotting down a business plan differentiates achievable from impracticable based on market dynamics, opportunities and threats, and company’s strengths and weaknesses. It sets the right track for business growth.
Establish short-term and long-term goals 🎯 A business plan sets down short-term and long-term goals and the direction to accomplish them, right from baby steps to giant leaps. It becomes a basis to revisit the goals from time-to-time and make iterations depending on the present scenario.
“Any business plan won’t survive its first encounter with reality. The reality will always be different. It will never be the plan.” – Jeff Bezos, CEO of Amazon
Get clarity on your business 🙋 A frequent question that pops-up in business discussions is: “Are we doing it right?”
A well-articulated business plan brings insightful knowledge on each aspect of a business – from what it has to offer to how to market the offerings.
Make informed decisions 💡 A business plan is a reality check to track what is being fruitful and what is causing hindrance. It paves the way to make a business sustainable.
Predict future financial performance 📈 Financial projection is the spotlight of a business plan. It’s the carrot that captivates the eyeballs and tickles investors to fund a new business.
A promising business plan talks about the company’s future financial performance – expenditure, profit, revenue, etc.
Explore new business opportunities 💰 A business plan is a flexible document that enables learning on the go. It bolsters research and infuses businesses with new and more feasible business opportunities. It gives organizations a fresh outlook and ushers them to be a howling success.
How to prepare for a business plan
Now that we have answered the ‘what’ and ‘why’ of a business plan, let us move forward to solve the next riddle – how do you prepare it?
Identify your company’s vision, mission, and values 🎯 Start by answering and figuring out your business personality:
- What do you desire to be?
- How do you want to be perceived?
- What values put your business in motion?
This is your organization’s compass that acts as a foundation for the succeeding steps.
Know your target audience 🧑💼 Dig deep into:
- Whom are you going to cater to?
- What is your target market?
- What is the size and potential of the target market?
- What are the needs of a prospective customer?
- How are the needs addressed presently?
Learn market trends 💹 Identifying market trends keeps businesses ahead of the game. Analysis of industry data leads to business growth and profitability in the long run.
Weigh in the impact of unforeseen circumstances 🤦 From financial turbulence to natural calamities and pandemics – a lot can go wrong in the future and leave a business shaking. Expect the unexpected and gird your loins for these testing times.
How to write a business plan
Creating a winning business plan increases the chances of success and spurs investors to fund your business.
According to a study published in Small Business Economics , entrepreneurs that create a plan are 152% more likely to start their business and appoint a registered agent and 129% more likely to push forward with their business beyond the initial start-up phase and grow it.
Here are the key components of an excellent business plan:
Executive summary First impression is the last impression!
An executive summary is a crucial part of this document. It provides the essence of the whole plan:
- Company details;
- Size and scope of business opportunity;
- A description of your offerings and how it will solve the problem;
- Growth projection;
- Financial requirements.
It should be informative and able to spark readers’ interest to know more about the business plan.
Overview of the business This section lists down information on:
- Your business;
- Your target market;
- Description of your products/services;
- Why and how your offerings are a great fit for prospective customers;
- Your capabilities to handle the demands;
- Your value proposition and competitive advantage.
…and all other related details.
Market analysis and strategies Put forth a strong case built on the solid rock of data analysis and statistics – present data on target market size, industry trends, sales forecasts, and marketing strategy.
Operating plan The operating plan highlights the operational requirements for the smooth functioning of a business. It includes facilities, supply chain management, inventory, manufacturing, shipment, logistics, staff management – everything under the sun that covers capital and expense (CapEx) requirements.
Growth plan This section answers the question: “Where do you see the business going in the next few years?” It provides visibility to investors on the milestones and how you will make money in near future.
Marketing plan Thee marketing plan section describes how to market the offerings to create and fulfill customers’ needs (who are the customers, product positioning, pricing policy, and promotional strategies?)
Management plan This section outlines how your organization is structured and basically how strong you are together. It describes the skills, background, and responsibilities of the management team. It builds conviction that the business is in good hands and has a proficient human capital.
Financial plan and projections This is the part where numbers become the king.
It draws up deets on inflow and outflow of money, sales forecast, profit and loss statement, balance sheet, cash flow statement, and budget expense. It discloses and forecasts the company’s financial goals, profitability model, and charts a course for the coming years.
Conclusion and appendix Conclude the business plan by succinctly bringing out the key pointers – the business’s vision, mission, goals, strengths, and growth trajectory. Make it compelling and to-the-point. Add relevant appendices to strengthen your business plan.
Pro tip: Use an all-inclusive ready-made business plan template document and Process Street ‘s business plan checklist to create unbeatable business plans.
Business Plan Checklist
Click here to access the Business Plan Checklist!
Types of business plans
There are varying types of business plans depending on the purpose and usage:
- Business plan for start-ups A winning start-up business plan can be a game-changer to attract funding from investors. It should weave all key components to make it a promising investment – company overview, products/services, estimated costs, market evaluation, competition insights, risk analysis, cash flow projections, marketing strategies, and the management team’s strengths.
- Strategic business plan It lays down the details of a company’s strategies to fulfill its goals. It outlines the company’s vision, mission, strategy, and goals, the driving force for success, and the timelines.
- Internal business plan This plan moves the needle and steers focus on in-house planning and growth. It ensures that everyone grasps the company’s overall plan for growth. It prepares organizations to move forward by identifying and removing any blockages and assess and revise the strategies when required.
- Operations business plan It is an internal plan that maps out the nitty-gritties of a company’s operations plans and activities.
- Development business plan This is a development or an expansion plan of a business. It is used for both internal and external purposes. An external growth plan is written to attract investment from external sources. An internal development plan counts on its own business capabilities, revenue, and resources. It works as a guide to provide the right directions.
- Feasibility business plan A company scouts out a feasibility study when it plans to foray into a new venture, new product, or a new market. It articulates: How well will the product or service perform? Is the business promising? What is the expected return on investment (ROI)?
- What-if business plan At a point where you face unordinary conditions, you need a variation on the existing plan. A what-if business plan arranges to fall back on a contingency plan when things go sideways. For example, an unexpected surge in demand, new competition, drop in market size, etc.
A business proposal is the mantra that draws you closer to win a customer or bag a project.
Generally, it is a formal response to a Request for Proposal (RFP) sent by a prospective client looking for the right solution to their problems. It explains the particulars of a seller’s offerings and convinces the buyer that the proposed solution is the gateway to their business’s success and productivity.
“And, after all, winning business is what writing proposals is all about.” ― Tom Sant, Persuasive Business Proposals: Writing to Win More Customers, Clients, and Contracts
A business proposal comprises of four main points :
- What are the challenges of prospective clients?
- How can our solution solve their problems?
- Why should they choose us over others?
- What are the best pricing options available?
Why do you need a business proposal?
A business proposal is a testimony in itself that asserts, “I am the best you can get.”
Here are the reasons why you should and must make a business proposal :
- Create or leverage a business opportunity 💲 The prime motive is to win, win, and win! It is a medium to encash a business opportunity by putting forward an I-can’t-say-no-to-this proposal.
- Stand out from the competition 🏆 It persuades the prospects that you are way ahead of other rivals in the industry in terms of the value you offer.
How to prepare for a business proposal
The heart of preparedness is research and further research. 🔍 After all, the devil is in the details.
Talk to prospective customers, visit their website(s), read published articles, and be a know-it-all for your prospective clients.
Sort out the ‘who’ 🤔 First and foremost, dig every possible information about the client:
- Who is the client (its vision, mission, and goals)?
- What does it produce?
- What are its key markets and target customers?
- What are its business growth plans?
- Which markets is it presently serving?
- Also, figure out the kingpins of a proposal approval process. This will help you to create a comprehensive proposal with all the necessary answers expected by the decision-makers.
Understand the challenges 🤗 Find what’s bothering them and what is causing hindrance to their business success. Learn about their existing solution and its challenges.
Stitch the glitch and offer the best solution 🤩 After a thorough review of all the points mentioned above, find the best solution to your prospective client’s problems.
List down key differentiators 👌 This will help you to beat the competition in the dust. It draws a comparison chart and puts you in a superior position.
According to Gray Mackenzie, founder of GuavaBox ,
“Prior to submitting a proposal, make sure you have clearly defined all the major points verbally with the potential customer. By discussing the scope, cost, timeline, and details prior to submitting a written proposal, you can uncover objections earlier in the process.” – Gray Mackenzie, 10 Sales Experts Share Their Best Business Proposal Tips
How to write a business proposal
Let’s get down to the fundamental elements that form a business proposal. Learn how to create a business proposal that stands out and close sales.
Title page/Cover page 🖼 The name says it all.
Pretty easy-peasy thing to understand, right? After all, you have been creating the title pages since school days.
Still, make a note: Always write a gripping title that intrigues prospective clients’ interest and urges them to read on.
Other components that should be included on the title page are:
- Your company name and logo;
- Prospective customer’s name;
- Submission date.
Table of contents (TOC) 📝 As the name suggests, a TOC is a well-structured layout of the document. It helps to skim and scan and navigate speedily through different sections of a business proposal.
Executive summary 🗒 It sets the tone for a proposal and makes the reader inquisitive about reading subsequent sections. It sums up the entire business proposal – the purpose of sharing the proposal and why and how your solution is the right fit for the prospective client. Leave no stone unturned to boast about your offerings in the executive summary.
Details of offerings 🎁 This is an in-depth description of the products or services your company has to offer.
How will the offerings solve the client’s problems? 💡 This explains why your products/services are the right fit to address a prospective client’s needs and why it is a better alternative than the competition.
The methodology/implementation of offerings 🛠 This section is a blanket explanation of how the promised deliverables will be executed. It provides step-by-step clarity on each action along with timelines. It gives the client peace of mind and builds trust and confidence in the offering.
Pricing, payment, and legal matters 💵 Here, you talk about the pricing structure, applicable taxes, payment schedule, cancellation policy, and how you plan to solve the legal matters (if any arise in the future).
Here are some tips for this section:
- Ensure that the pricing details are concise and complete.
- Providing a comparison chart with different pricing options helps to make decisions faster.
- Don’t go overboard with pricing, and also, don’t underrate yourself.
- Always refer to the RFP and verify if every request has been fulfilled.
- Separate out and create a new legal section if your business demands an extensive list of legal requirements.
Details about your company 🔍 This is an exhaustive overview of your company. Don’t forget to add relevant customer testimonials, case studies, or success stories to build your case among prospective customers.
Signatures and Call to action 🖌 This is the moment that gets butterflies in your stomach; the closure. This is the concluding part of a business proposal. Here (if all your prayers get answered), you and your client sign the proposal and secure the deal. Hurray!
Pro tip: Once you send the business proposal, don’t sit idle in your cocoon day-dreaming of winning the proposal. Always proactively do follow-ups with the prospective clients and clarify their doubts.
For start-ups or small businesses, drafting a business proposal can be an unnerving experience. They work fingers to the bone to write a perfect business proposal. Spending too much time on it might lead to missing the deadline and eventually losing out on a golden opportunity.
According to a report by Better Proposal , sending a business proposal within 24 hours increases the likelihood of winning the deal by 25%. 🤝
Here’s the secret sauce to speedily create flawless business proposals :
First, pick a professionally vetted and ready-to-use business proposal template and draft a business proposal like a cakewalk. Such as the Business Proposal Template included below.
Next, always use Process Street ‘s super-powered business proposal template checklist and ensure no step gets missed in the process.
Business Proposal Template Checklist
It even turns out a blessing for big businesses since they have to draft multiple proposals all the time. Templates and checklists save a lot of time, enhance productivity, and increase the chances of success.
Types of business proposals
Majorly, there are two types of business proposals:
Solicited business proposal 👋 Also known as an invited business proposal, it comes into play when a buyer, or a company, outlines its requirements and requests suppliers to present an offer. It can be a response to a public tender issued by big corporations or government agencies.
Alternatively, a solicited business proposal can also be submitted as a response to the RFP shared by a prospective client.
The difference between the two is that while the earlier one is open to all bidders, the latter’s scope is limited as it is shared with shortlisted suppliers.
Pro tip: Do a thorough check before submitting an invited business proposal. Missing out on-minute details can kick you out from their consideration list.
Unsolicited business proposal 🚪 An uninvited or unsolicited business proposal is a proactive attempt to create a business opportunity. This proposal is sent to prospective clients without being asked.
The good news is, there are slim chances of your rival sending a business proposal simultaneously, so less or no competition.
The bad news is, it might breathe in the customer’s inbox for a few days and then, without being read, depart to the heavenly abode -the trash folder.
But still, like a cold call, it leaves some impression on prospective clients and shoots up the chances to cut a deal in the long run.
Pro tip: An unsolicited business proposal is mostly sent through emails. Make certain to write an attention-grabbing headline and a convincing explanation to draw attention.
Here’s a comparison chart that distinguishes between business plan and business proposal:
Bonus: How to make ‘wow’ business plans and business proposals
Here are the secret ingredients to make awesome and captivating business plans and proposals:
Follow the principle of KISS (Keep it simple, silly) 😛
This is not the right place to brag about your vocabulary skills. You want the prospective customer to focus on reading rather than wasting time looking up for a word.
Always remember! Communication is the key.
So, go simple and ditch those heavy jargons.
Go visual 📷
Don’t wear-out the pupils of your prospects with long-winded documents. Capitalize on the multisensorial abilities of humans as well.
Visuals increase people’s desire to read content by 80%.
Leverage the power of visuals and make your document easily graspable by adding graphs, infographics, flowcharts, tables, images, and videos.
Add social proof 👌
Do not forget to add positive feedback or customer testimonials. If similar projects have been delivered in the past, do add relevant links and case studies of that work. It helps to build trust and strengthen your case.
“Make sure you have great success stories that you can share with potential clients. At the end of the day, most, if not all, potential clients want to know you will provide value to them and generate positive ROI.” – Mathew Bivens, Podcast and marketing consultant, 10 Sales Experts Share Their Best Business Proposal Tips
Ensure the document is free from grammar and spelling errors.
Follow brand guidelines 📖
Your document should reflect your brand. Bring consistency in all your documents and design them as per the brand guidelines.
Use document builder tools 🛠️
Time is money!
The likelihood of getting a ‘yes’ on your business plans and business proposals depends on how fast you can create a flawless document.
Empower your organization with a smart and all-in-one document builder tool like Revv – create, communicate, collaborate, and close your documents in no time.
Business plans and business proposals are two different worlds with distinct purposes and goals. But, both play a prime role in increasing the odds of business success.
People often get the wrong end of the stick and ask for a business plan when they mean business proposal or vice-versa.
But, we don’t need to worry about that since we are now clear on what is what.
Cheers to us! 🍻
P.S: Don’t forget to subscribe to the Process Street blog to get notified of our upcoming articles. We also have a podcast “Tech Out Loud” featuring content written by respected industry leaders such as Peep Laja , Sujan Patel , Tomasz Tunguz , and more! 🚀
What is your take on business plans and business proposals? Have you ever got your wires crossed with these two terminologies? Don’t forget to post your comments below. 👇
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Hey, I'm Molly, Junior Content Writer at Process Street with a First-Class Honors Degree in Development Studies & Spanish. I love writing so much that I also have my own blog where I write about everything that interests me; from traveling solo to mindful living. Check it out at mollystovold.com .
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Business Proposal vs Business Plan: What's the Difference?
One of the most searched queries on Google is "business proposal vs business plan", and we are here to break the confusion.
August 14, 2022
Business Proposal vs Business Plan: Which One Do You Need?
You are starting a new business, and you aren't sure what you need to do. You heard that you needed a business proposal and a business plan, but you weren't sure what's the difference between them.
You did some research and couldn't find what you are looking for... You decided to create both of them, but you need weeks to write and refine them.
Don't worry, we are here to remove this confusing process. Let's see what's the difference between them. You may, and probably do need both of them. But which one should be your priority?
The Difference Between a Business Plan and a Business Proposal
When you're starting a business, one of the most important things you'll need to do is create a business plan . This document will outline your company's goals and strategies for achieving them over the next five years.
A business proposal , on the other hand, is a sales document that you put together to pitch potential projects to clients. It's not the same as a business plan, and it usually includes cost quotes for potential projects.
The main difference between a business proposal and a business plan is that, while a business plan is informative, a business proposal is intended to showcase operations, goals, and potential.
The executive summary of a business plan will include information about the company leadership structure or the introduction of management. Generally, business plans include an executive summary part while business plans don't.
We have seen some samples that use executive summaries but since the main goal is to close a deal. We suggest keeping them short and clean.
The business proposal format depends on whether the business is solicited or unsolicited . Details of products and services offered, the scope of work and responses to specific questions in an RFP are included in a business proposal.
A business plan documents the vision of a business and how it will be achieved. A business proposal offers comprehensive information for potential investors, suppliers, accountants, etc.
A proposal shows the external player what the company is all about and how it intends to carry out its project. Keep these differences in mind when you're putting together your next business presentation --you'll need to tailor your content accordingly!
What Are Business Plans?
A business plan is a document that outlines the business goals, strategies, and tactics a company will use to achieve those goals. The business plan also includes an overview of the company, its management team, the target market, and the products and services the company plans to offer.
It usually includes information about the company's products and services, target market, marketing plans , financial forecasts, and management team bios.
Here's a sample template to use while creating a detailed business plan.
What Is The Purpose of a Business Plan?
A business plan is a key document for any business. It lays out the goals and strategy of the business and helps to ensure that everyone involved in the business is on the same page. It can also be used as a tool to help secure funding from investors or banks.
A business plan is a document that outlines the strategy and goals of a company. It can be used as a planning tool , to track progress, or as a basis for making decisions . A well-written business plan provides a roadmap for the business , and it can help attract investors or partners.
There are many reasons to create a business plan. Some of the most common reasons include:
- To track progress - A business plan can help you track your progress and ensure that you are on track to achieve your goals.
- To make decisions - A business plan can provide guidance when making decisions about the future of your company.
- As a planning tool - A business plan can help you identify potential problems and solutions, and it can be used to forecast future growth.
- To attract investors or partners - A well-written business plan can help you attract investors or partners who share your vision for the company.
What is a business proposal?
A business proposal is a written document that offers a solution to a problem or a way to achieve a goal. It is often used to sell products or services to a potential customer. A business proposal must be well-written, clear, and concise in order to convince the reader to take the desired action.
A business proposal is a formal response sent to an RFP (request for proposals). It is a way for the seller to convince the buyer that their proposed solution is the right one in order to win business. Business proposals are meant to persuade a prospective client.
A business proposal typically consists of four main points: what are the challenges, how your solution solves the problems, why they should choose you over others, and the best pricing options available. The price is typically stated in the document. If a business is requesting proposals, they should be sent in their format. An RFP response should include specific details about the scope of work and the cost estimate.
Here's a sample template to use while creating a detailed business proposal.
Why do you need a business proposal?
A business proposal is a key part of the business development process . It is a document that outlines the business goals, strategies, and tactics that will be used to achieve those goals. A proposal is used to convince potential clients or partners that your business is the best option for them.
It's typically used to pitch an idea to a potential client or customer. A well-crafted proposal can help you win new business and close deals.
Your company might be expanding into a new market and need to propose a new product or service. Or, you might be approached by another company with an opportunity you'd like to explore. Maybe you've identified a gap in the market and want to propose a new product or service to fill it.
How To Prepare For a Business Proposal?
Well, we do have a comprehensive guide to business proposal creation with templates and examples, but if you need a more brief explanation, keep reading!
When preparing for a business proposal, it is important to do your research and understand the client's needs. You should also have a clear understanding of your own company's capabilities and what you can offer the client. Additionally, it is important to be well-organized and to have a strong pitch.
You should have a clear understanding of your target audience and what will appeal to them. You also need to have a good grasp of the competition and what they are offering. In addition, you should be familiar with the terms and conditions of any potential contracts that may be involved.
Your proposal should be neatly formatted and easy to read. It should also be free of grammatical errors and typos. Be sure to proofread your work carefully before submitting it.
Make sure you provide complete contact information, as well as an outline of your proposed solution or service. If possible, include testimonials from past clients who have been satisfied with your work.
Remember that you are offering a valuable service that can help the reader achieve their goals. Believe in yourself and your ability to succeed, and you will be able to deliver a winning proposal every time
How To Write a Business Proposal?
When writing a business proposal, make sure to follow this brief outline:
- Introduce yourself and your company
- Outline the proposal's purpose
- Explain the problem that you're trying to solve
- Describe your solution
- Explain the benefits of your solution
- List your qualifications
- Request a meeting
It should include an overview of the product or service, information about the company proposing it, financial projections, and terms and conditions. A well-crafted proposal can help your company win new contracts and increase sales.
Here's another sample template you can use while creating a business proposal:
Business Proposal Template Checklist
Here's a story of our customer John who joined the Decktopus community 2 years ago.
John had been working in sales for years, but he had never worked in a company that sold products. When he was hired by a new startup, he was excited about starting making sales and increasing profits. However, he soon realized that there was no one in the company who knew how to sell. The founder of the company told him that he would need to create a presentation template to share with the other reps.
John wasn't sure where to start. He read article after article, trying to gather information about what made a good business proposal. After weeks of research, he finally created a template that he felt confident in sharing with his fellow reps. He was excited to see how it would help them increase sales and profits.
This is the outline we gathered while our support team helped him along the way:
- Marketing Plan
Types Of Business Proposals
An unsolicited proposal is one in which the company offers a product or service to a potential customer who has not solicited it. Here's an unsolicited proposal template .
A solicited proposal is one in which the company responds to a request for proposal (RFP) from a potential customer. Here's a solicited proposal template .
A proposal to bid is a document that a company submits to a potential customer in response to an RFP.
The purpose of the proposal to bid is to persuade the potential customer that the bidder's product or service is the best option among those being considered.
Here's a proposal to bid template .
Business Plan Structure
A business plan has three main sections: the executive summary, a description of the business model, and financial projections.
The first section is an introduction that should be no more than one or two pages long. It should include a brief overview of your company, its products and services, and how you plan to make money.
The second section, a description of the business model, provides details about your company's competitive landscape, industry trends, and how you plan to reach your target market.
The marketing model is an informative section that should include detailed information about the industry competition and build-out plan. This part of the document can be several pages long and will help investors understand your company's place in the market.
While all three sections are important, remember that potential investors will likely focus on the financial projections most closely when deciding whether to invest in your company. The financial projections section is important because it shows potential investors how you expect your business to grow over time.
A well-crafted business plan can help convince potential investors to put their money into your company.
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A business plan is a document that offers a detailed description of how a business is set up, according to an article on Entrepreneur.com. It’s a five-year business plan that shows the company’s structure, products and services, market research findings, marketing strategy, budget, and financial projections. It is simply defined as a thorough and comprehensive description of a company’s operations and projections. A business plan can be written by a startup or an existing company.
A business proposal is a sales document designed to show how a company will complete a project, convey the project’s value to a potential client, and solicit the client’s business. As a result, it is a document that a company provides to another company or organization. A business plan and a business proposal are two distinct papers with opposing aims and objectives. A business plan is a factual and comprehensive executive and operational overview of a corporation.
A business proposal is a sales document that explains how a company would handle a project, states the project’s value to the client, and asks for the client’s business. A business plan is a written factual presentation. A quote and a call to action make up a business proposal.
Structure of a Business Plan
There are three parts to a business plan: a description of the business model, a marketing strategy, and financial predictions. The executive summary, business description, marketing model, study of industry competition, build-out strategy, operations plan, the introduction of management, and discussion of financial concerns and projection of results are among the informative aspects. An executive summary, which might be a dense abstract or a longer marketing tool to pique interest in the business plan, is presented first. The business plan is an informational document that details the activities and possibilities of your firm.
Secondly, a business plan summarizes your company and can be used to obtain bank loans and attract investors since it demonstrates the company’s goal and how it will be realized.
Structure of a Business Proposal
A business proposal submitted in response to a Request for Proposal (RFP) should be formatted according to the RFP’s specifications. In most cases, this entails a brief description of your company’s services and products that are relevant to the RFP’s aims, a reiteration of the scope of work, responses to specific questions posed in the RFP, and a price that includes materials, tools, labor, delivery, and other project costs.
The following are some of the reasons why you should write a business plan.
- It clearly defines the scope of the business and, as a result, clarifies your thinking as the business owner.
- It provides you with knowledge that you had not previously considered. Simply, it documents the company’s vision and how it will be realized. This 4. directs the company toward a realistic strategy that will guide the company for the duration of the plan.
- It is the business’s plan for success.
- It lays forth ways for turning concepts into core capabilities.
- It also includes financial predictions for launching and running the business, as well as an estimate of revenue creation from operations.
- It provides complete company data to potential investors and employees, as well as suppliers, accountants, attorneys, and other stakeholders.
- The main purpose of a company plan is to keep track of and disseminate information.
A business plan can also be used to secure funding from a bank, venture capitalists, angel investors, or incubation. You must show a well-researched and viable company strategy when seeking these money lenders. Investors want to know that the market information and financial estimates presented in the report are accurate and reliable. Because it is the company’s blueprint and vision, a business plan should be as accurate as possible. It serves as a checklist to see if the company’s goals are on track. A competent business plan, according to experts, takes roughly six weeks of in-depth research and preparation. It’s impossible to make one the day before your investor meeting.
READ ALSO: 5 MISTAKES TO AVOID IN AN AWARD WINNING BUSINESS PLAN
The purpose of a business proposal is simple to understand:
An invited proposal is one that is produced in response to a buyer or client’s advertisement. Organizations and government agencies, for example, that want to buy services and products from commercial vendors request contractors to submit bids.
Alternatively, some businesses request Requests for Proposals (RFP) from a group of providers they are interested in partnering with. In each scenario, the company is bidding against other companies. It is in your company’s best interests to make a competitive and attractive business proposition.
Even if a potential client has not requested one, non-invited or uninvited proposals are sent to them. In this circumstance, you recommend that the firm or organization buy services or products in exchange for money. You may, for example, submit a proposal to develop an app for an organization or provide training services to its employees. In all circumstances, the most important thing is to present a well-researched offer that will persuade purchasers.
A business proposal is restricted to the scope of the project or requirement. It also caters to a specific demographic. A proposal’s main purpose is to solicit or grow a business opportunity.
A company plan might be viewed as a more internal document. A proposal, on the other hand, is a document that is used to show or sell a firm to a third party.
A business plan directs the internal activities of a company in terms of marketing strategies and revenue estimates that must be met. A proposal explains what the company does and how it plans to carry out a project or use the chance to earn revenue for both parties to external players such as governments, donors, or business partners.
A solicited proposal is used as a response to the solicitor and is meant to persuade the solicitors that your company is the best fit for the project. It also acts as a way to bid on a project.
An unsolicited proposal allows you to reach out to potential customers by offering that they acquire services or products from your firm.
An unsolicited business proposal for the creation and development of a business opportunity follows essentially the same framework as a solicited business proposal but anticipates anticipated client questions. A proposal is more of a marketing document that presents a value proposition and a call to action to persuade the audience to do business.
Understanding the fundamentals of a business proposal is a skill that you must have whether you are in business, work, or education pursuing a degree. The terms business plan and business proposal are frequently used interchangeably. These two papers are diametrically opposed. In terms of content, organization, writing style, goals, and purpose, a business plan differs from a business proposal. A business plan is a written presentation of facts, but a business proposal is a price quote and a call to action.
Finally, a business plan highlights a company’s goals and how to attain them with a practical day-to-day plan and a 3 to 5-year financial projection. As a result, a business plan offers investors and banks a clear description of the business for easy funding.
If you need a service of a Professional Business plan writer, then Dayo Adetiloye Business Hub is the place to go Call or WhatsApp us now on 081 0563 6015, 080 7635 9735 or send an email to [email protected] and we will solve any of your business plan problems.
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