How to write a business proposal with step-by-step instructions
Proposals are essential for attracting new clients and closing deals. They’re a core part of most company workflows – whether those companies are early-stage startups, small businesses or multinational enterprises.
But most businesses also make a handful of fatal mistakes when it comes to writing their proposals. And this results in an unnecessary loss of sales and revenue.
Furthermore, most document workflows are out-of-date. Yet only a few simple changes are needed to move from time and resource-sucking paper workflows to an automated paperless solution.
In this article, we’re going to look at exactly what goes into a successful business proposal. We’ll define key terms, provide a comprehensive structure (with practical examples), and give you some simple tips to boost your chances of success.
What is a business proposal?
A business proposal is a document that outlines the objectives, methods, and costs of a business project. It is essentially a detailed offer to provide a service that solves a problem for a prospective client.
Business proposals can be distinguished from quotes, which are shorter and more specific in nature, usually providing little more than item-by-item costs for a clearly-defined service package of products.
Generally speaking, business proposals will fall into one of four categories:
1. Sales proposal
A sales proposal is an in-depth outline of a project. It includes a detailed description of the proposed solution along with methods, objectives, pricing, and legal documentation.
2. Response to an RFP (Request for Proposal)
A “request for proposal” is a document that is sent to multiple suppliers asking for proposals to be submitted for a very specific project. Responses tend to be in a format prescribed by the sender. Because evaluators will almost certainly be considering multiple vendors, proposals of this type will usually need to be more persuasive.
3. Grant, research or sponsorship proposal
These types of proposals are sent to grant-awarding institutions. Their most common use is to request funding for scientific, social, or charitable projects and follow a slightly different format to typical business proposals.
4. Proposal letter
While proposal letters aren’t technically proposals as such, they’re still worth mentioning here. Business proposals tend to quite extensive documents. A proposal letter is an abbreviated form of a full business proposal. It follows a similar, albeit condensed, structure and is often sent to potential clients that do not need a full proposal or for smaller projects.
How to write a business proposal
When it comes to writing business proposals, trial-and-error formats work best. Businesses expect proposals to be written according to a specific structure, and following this structure will make it much easier for prospective buyers to navigate and evaluate your solution.
Use the following business proposal template for your documents:
Don’t overlook the title page. It doesn’t need to be flashy, but it should look well-designed and enticing. It’s an opportunity for you to capture your recipient’s attention and communicate your professionalism.
Your cover letter should set the context for the remainder of the proposal. Introduce yourself, reference any past exchanges, briefly allude to the client’s needs and core problem, and set out what the proposal will contain.
Table of contents
At PandaDoc, we consider a table of contents to be an absolutely essential part of any proposal. Yet so many businesses leave them out. Keep in mind that your proposal will be quite a large document, and your potential customer will need to access certain parts of it quickly.
The executive summary is an extension of your cover letter. You should go into more depth about what the proposal contains, why you are best placed to solve your prospective client’s problem, and what results you can provide.
This is a somewhat general description of the solution you are recommending. Provide a birds-eye overview of the solution along with the big-picture goals and timeframe. Describe the core problem in a nuanced way as if you’re writing a job proposal and want to be hired.
Methodology and assessment
This is where you should drill down into specific daily, weekly, and monthly objectives and how you intend to achieve them. It is a more elaborate form of the solutions you outline in the proposal section.
This is your chance to show off to the recipient. Include biographies of team-members, reference past experience (you may wish to include case studies), and highlight your USPs and competitive advantages.
It’s important to show pricing in a clear and structured format, preferably in a table. Provide item-by-item costs and overall costs. Include a single figure for the cost of the whole project.
Terms and conditions, contract, warranty, etc.
If you’re requesting a signature at the end of a proposal, it’s crucial that you include all the necessary paperwork for your prospective client’s legal team to review.
Agreement and CTA
If appropriate, include signature fields and a CTA at the end of the proposal.
How to write a business proposal using PandaDoc
If you’re not already taking advantage of a paperless solution, you’re likely wasting time and resources. Proposal software like PandaDoc can dramatically streamline your proposal workflows while also boosting key proposal metrics like open, read, and close rates.
The following are among the most useful features that proposal software provides:
- Built-in eSignatures and payment gateway integrations.
- Automation between apps (like CRMs and cloud storage).
- Analytics reports for tracking metrics like opens, the time read, close rate and more.
- Content library and easy-to-edit templates.
Follow the steps below to create a business proposal with PandaDoc:
- Log into your PandaDoc account or sign up for a 14-day free trial.
- Click on the “New Document” button in the top right of the screen.
- Click the Public templates tab on the popup and select an appropriate proposal template.
- Input your company name and details and your client’s details and click Start Editing.
- Once you have edited the document to your satisfaction, click Send.
- You can then track the progress and status of the document using the PandaDoc analytics tools.
Writing business proposals isn’t easy. There are lots of factors to consider, from the unique needs of the client to the persuasiveness of your own pitch.
Most proven ways of boosting the effectiveness of your proposal workflow are to use all-in-one proposal software solution. With software like PandaDoc, you can streamline a whole range of laborious tasks with the use of content libraries, templates, and integrations with your existing tech stack. What’s more, tracking tools can be used to see when potential clients open, read, and respond to your proposals.
If you would like to give PandaDoc a test-drive, you can sign up for a free 14-day trial here.