Learn how to write better business proposals

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Business is all about persuading someone to purchase the product or service you’re offering. In some cases, that means you’ll need to write a business proposal that is compelling enough to convince your prospective client to buy from you.

Most people starting a business don’t know how to write a good business proposal. In fact, far too many imagine some document of hundreds of pages, thinking this the only type of business proposal that exists.

A business proposal is a document that persuades an investor or prospective client to work with you.

Many business proposals are produced as a result of a Request For Proposal (RFP), which often means that you have a list of high points your proposal should hit.

Today I’m going to show you how to gather the information you need to write a good business proposal and then what the four key sections of a winning proposal are.

4 things to put in your next business proposal

Here are the four sections that every effective business proposal includes at a minimum.

  1. Current problem.
  2. Project goals.
  3. How will we gauge success?
  4. Options and timeline.

Before we jump into the elements of a good proposal, let’s talk about the crucial first step that too many overlook.

Get the information you need

Business Proposal Woman Looking at Tablet
Before you sit down to write the proposal, do a little digging.

One of the first mistakes that many business owners make is to assume that an RFP has every detail they’ll need to generate a winning proposal. While an RFP may have decent technical detail, it’s often missing the root problem the purchaser is trying to solve.

A good business proposal starts with gathering information.

 

One RFP I received was thick with technical detail, but when I got on the phone with the prospect to talk more about their needs, I realized that the big problem was all the manual work their website currently took. Armed with the knowledge that automating basic tasks would be valuable to them, I was able to build a winning proposal.

Never take an RFP at face value. The first thing you need to do when faced with an RFP is to get on the phone with your prospect.

Always find out who the purchaser is so that you can talk directly to them. Usually the purchaser of a project is going to be the one who has control of the budget, so make sure you’re talking to someone who could approve the project right now. If there is a committee that is making the decision about the purchase, there is almost always a single person that has the most pull. Make sure you are talking to that person before you write your business proposal.

Your initial conversations are about building trust with the prospect because people purchase from other people that they trust. If you just fire off a business proposal based on an RFP, don’t expect to have a very high success rate.

The parts of a good proposal

Many of the articles you’ll read on writing a good business proposal will wax poetic about your introduction … and they’re right because most businesses don’t spend time digging in deep with their prospects. That’s not you though, because you followed my advice above and got to know your prospect.

Nothing in your written business proposal should come as a surprise to your prospect.

They should know what you’re going to do and about how much it will cost and how long it will take. If you think there are potential bombs in the business proposal you’re going to submit, then you haven’t spent enough time talking to your prospect.

Once you know there are no surprises, you’re ready to write your business proposal. A winning proposal should have four main sections in it.

1. Current problem

The first section of your proposal should describe the problem that your customer has. Not the technical details, but the problem that you will be solving.

For the client I referenced above I spent time talking about how much manual work was currently being done. I described each step of his most painful and time- consuming processes with the goal of showing that I understood what was wrong.

Business Proposal Man Talking on Phone

Make sure to use the words that your customer used during your conversation.

 

This is why I record the conversations with my customers (with their permission). When it comes to writing the proposal, I can refer back to them and use their language to describe their problems.

2. Project goals

The second section is all about showing your prospect that you can bring them a future that doesn’t have their problem in it. This is not a long list of everything you will do, but a description of the amazing outcomes that your work will bring to their business.

Again, going back to the client that had all the manual site work; I talked about how the new system would take away a bunch of mindless administrative tasks that they currently had to deal with.

3. How will we gauge success?

Part three is all about taking the dreams of part two and showing how you’ll realize them using numbers. If you’re automating a bunch of tasks for a client, then talk about the hours they’ll save.

Remember, you should have discussed this already. Your prospect should have verbally agreed that they’ll save 10 hours if you automate a task. They should not look at your numbers and think you’re crazy, they should remember the deep conversation you had when you both came up with the amount of time saved.

4. Options and timeline

The final section of a good proposal is pricing and timelines. It’s generally best to include three options for pricing with their corresponding timelines.

Business Proposal Three Doors
It’s a good idea to offer good, better and best options in your proposal.

Option No. 1

The first option should be the base project, with everything they need to move forward. If you’re building an eCommerce store based on WordPress, that means option one includes the store, not just WordPress.

Option No. 2

Your second option should be the base items plus a few of the extra things that your prospect thought it would be nice to have. This is possibly their “ideal” solution

Option No. 3

Your final option should have something aspirational in it. For my client who was doing manual work, I found three other things to automate that weren’t even on the RFP.

That meant I quoted about 10% above the maximum budget the client had for the project. They took my third option because it spoke to the root pain they had with their site. This extra work was the most profitable part of the project for me.

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Business proposals explained

If you take the time up-front to get to know your prospect and understand their problems, then you’re setting yourself up to write a winning business proposal. By restating their problems, showing them the dream of your solution, and then grounding it in numbers they agree with, you can win more projects.

Related: Business strategy — what separates the winners from the losers