How to Write a Business Proposal

Co-authored by Jack Herrick

Last Updated: June 24, 2024 Fact Checked

You need to draft a business proposal when you offer products or services to another business. You might draft a business proposal in response to a Request for Proposal (RFP), which businesses or government agencies send out when they have a particular problem they need help with. A business proposal should identify the problem, propose a solution, and explain why you are the best person to solve the problem. A business proposal is not a business plan, which is a different document.

Part 1

Part 1 of 3:

Beginning the Business Proposal

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1
Read the Request for Proposal carefully. You might submit a business proposal in response to receiving an RFP. Large businesses and government agencies send out RFPs when they need goods or services. For example, a business that is being sued may send RFPs to different law firms, asking them to submit a business proposal. Alternately, the government could send out an RFP when they need to buy supplies of a product. The RFP should contain certain information which you must fully understand before drafting your business proposal.^{[1]
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- Make sure that you can meet the client’s requirements as spelled out in the RFP. For example, if you can’t come in under the budget or meet the client’s timeline, then you shouldn’t submit a proposal.
- You don’t need to submit a business proposal in response to an RFP. Instead, you can reach out to a business you think could use your services.
2
Ask questions. You want your business proposal to respond to the client’s actual needs. This means fully understanding the client and clearing up any confusion in the RFP. You should always step into the client’s shoes and try to see the problem from their perspective. To help in this process, you should call and get answers to the following:^{[2]
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- Whether prior attempts were made to address the problem. Why did they fail?
- What criteria the client will use when evaluating a business proposal.
- Whether the organization has any concerns.
- The organization’s operating policies. You want to make sure your proposal is consistent with these policies.
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3
Format your document. You want your business proposal to be readable. This means that the font should be in a size and style that the reader is comfortable with. Generally, you can use Times New Roman 12 point.
- You can also look for sample proposals used in your industry. Type “business proposal sample” and then “your industry” into your favorite search engine.
- There are also business proposal templates online. Using one can make your business proposal look professional.^{[3]
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Add a title page. You should have a title page as the cover to your business proposal. The title page should include the following information:^{[4]
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- your name
- your company’s name
- the name of the person you are submitting the proposal to
- the date you submitted the proposal
5
Introduce the problem or business need. A business proposal identifies a problem and proposes a solution. Accordingly, you should begin by identifying the client’s problem in simple and clear language. Explain why the current situation is a problem for the client.^{[5]
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- For example, you could write, “Mathis Gyms is in need of Accounting and Payroll Services as the business continues to grow and hires more employees. Currently, all accounting is done by management, which must devote increasing amounts of time to accounting. By outsourcing this task, management can focus on other business priorities, such as marketing and entering new markets.”
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Provide context if necessary. You might need to explain context so that the reader understands the proposal. For example, you may need to identify the following for the reader:^{[6]
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- If any previous solutions have been attempted and failed.
- Whether someone asked you to write the business proposal.
- How you became involved in the project or aware of the problem.
7
Define any key terms. Although your business proposal should be written in simple and clear language, there may be terms that you need to define for the reader. Remember that you might submit your business proposal to a purchasing department that understands industry jargon. However, the person who makes the ultimate decision might not be as familiar with industry terms.
- You can draft the business proposal first and then go through to identify any terms that might be unclear to the reader.
- Also define terms if you are using them in a unique way. For example, the term “fiscal year” can be defined in many ways, depending on the business.
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Offer a roadmap for the proposal. If you have a long business proposal, then you might want to offer an overview of what follows the introduction.^{[7]
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Trustworthy Source

U.S. Small Business Administration
U.S. government agency focused on supporting small businesses

Go to source} You could summarize the parts that follow.
- For example, you could write, “This business proposal has four parts. After this introduction, we offer the proposed solution, timetable, and an explanation of benefits in Part II. In Part III, we provide an itemized budget and a set of standard contract terms. Finally, in Part IV, we summarize our experience and confirm that our proposed solution is the correct course of conduct.”

Part 2

Part 2 of 3:

Making Your Proposal

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1
Propose a detailed solution. After identifying a problem, you must tell the reader how you intend to solve the problem. Try to be as detailed as possible.^{[8]
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Research source} Typically, your solution will be to offer your goods or services to the potential client.
- For example, you could write: “Acme Accounting specializes in Accounting and Payroll Services for growing small and mid-sized businesses. We can provide complete service in the following areas: ledger maintenance, inventory account balancing, year-end tax statements and summaries, and standard pay period check origination.”
- It might be better to use bullet points so that this information is easier to read.
2
Explain the benefits of your solution. There may be different ways to solve a problem, so you want to explain why your reason is the best. You can use bullet points to list out the benefits. Common benefits include a cost savings to the business, confidentiality, and professional expertise.^{[9]
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- Remember to justify your expected benefits with evidence. For example, you could rely on studies that show the benefits of following your proposed solution.
- If no studies are available, then you could rely on commentary from prominent people in the field. For example, a former client could offer testimony that you saved their business money.
3
Lay out your task schedule. You need to explain the timeline for completing tasks.^{[10]
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- You can lay out certain milestones. For example, if you propose to remodel a store, then you should include the date that you will start and when the store will be ready to reopen.
- Always explain that your timeline is an estimate and is contingent on other factors. In the construction example, you might be slowed down by having to obtain the necessary permits from the local government or by relying on a subcontractor.
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Include your budget. The budget may be the most important part of the business proposal. The reader needs to know whether they can afford your services, so you should include information about pricing. Be conservative. For example, you might want to add up the anticipated budget and then multiply by 1.5 to account for any unforeseen circumstances. Make sure to mention that the numbers are only estimates. Depending on the proposal, you might need to include information on the following:^{[11]
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- start-up costs or initial set-up
- labor costs
- supply costs
- ongoing monthly charges
- maintenance costs
5
Describe contract terms. You should also include key contract terms so that the reader will understand more about the agreement they are entering. For example, you could include information such as the following:
- How much is paid on signing: “50% payment upon signing.”
- Penalties or interests assessed for late payment: “A late fee of $50 will be assessed on any account past due.”
- Your cancellation policies: “The contract may be cancelled for any reason with 90 days written notice. There are no pre-payment penalties.”

Part 3

Part 3 of 3:

Concluding the Business Proposal

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1
Identify your relevant experience. You want the reader to have confidence that you can follow through and implement the business plan. You should identify one or more similar projects and explain the success you achieved.
- You may be limited in what you can share by client confidentiality agreements. Nevertheless, you can talk about prior experience in general terms. For example, you could write, “Successfully provided Accounting and Payroll Services to 20 mid-sized businesses (25-100 employees) for the past five years.”
2
Describe who you will bring onto the project. You might not be able to do everything. In this situation, you need to explain who you will hire to help you and how. Also explain how you will guarantee that they are competent.
- If you know who you will hire, then you should include their resumes along with the business proposal.
3
Discuss any anticipated opposition. Some business proposals might face opposition. For example, if your business proposal is to help a business by identifying which employees they could fire, then you can expect opposition to arise. Also, if you propose to help the company rebrand, then others in the company might object. You need to identify and then counter any anticipated opposition:
- Summarize the anticipated opposition.
- Discuss the likelihood of the opposition arising.
- Raise counterarguments.
4
Add a conclusion. In the conclusion, you should restate the benefits of your proposal. You might also want to include a deadline for the prospective client to respond and hire you. However, some businesses have moved away from deadlines, so you should look at other business proposals used in your industry to see what is standard.^{[12]
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- Also remember to encourage the client to contact you with questions and to visit your website if they would like to see more information about your business.
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Insert references. If you refer to studies or other sources in your business proposal, then you will need to cite them at the end. You should format them using a well-known style, such as APA style.
- Including a list of sources allows the client to easily find what you are referring to and double check that the information is accurate.
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Revise your business proposal. Set aside your draft for a day or two and then review it. Look for typos and dropped words. To catch typos and missing words, you can read the document beginning at the end. Read the last sentence and then read the sentence before that. Work your way toward the beginning.^{[13]
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Trustworthy Source

U.S. Small Business Administration
U.S. government agency focused on supporting small businesses

Go to source}
- Also play close attention to your numbers and make sure they are accurate.
- You also should review the RFP and any other correspondence. Make sure your business proposal isn’t missing anything requested by the client.
- Shorten the proposal, if necessary. Ideally, someone should be able to read your business proposal in eight minutes. If it takes longer than that, then try to move as much material into an appendix.