How to write a proposal letter

Knowing how to write a business proposal letter is a key skill for any company.

The most important thing to keep in mind when writing a business proposal letter is to tailor it to the specific needs and interests of the recipient, while all the time maintaining a professional and respectful tone. 

A proposal letter is a formal and professional way to present your business ideas, products, or services to potential clients or partners.

The aim of the business proposal letter is to convince the reader that your proposal is a valuable opportunity for them.

In this article, we will show you how to write a business proposal letter to close sales and get your company noticed.

Put simply, a compelling business proposal letter should include:

  • Introduction and background
  • Statement of the problem
  • Goals and objectives
  • Evaluation
  • Budget
  • Call to action and contact information

What is a proposal letter?

Most commonly, a “proposal letter” (a term that has several overlapping meanings) is a document that acts as a full proposal for small projects, where an in-depth proposal, with a table of contents and extensive project details, is not required.

Alternatively, a proposal letter is sent either as a precursor to a comprehensive and more detailed business proposal or included as part of an actual proposal, used as a cover letter to engage potential prospects.

The first definition will be the focus of this article.

Proposal letters are shorter, abbreviated forms of complete proposals. Nonetheless, they follow a similar, albeit more concise, structure.

There’s also one more point worth noting. Sometimes, the terms “proposal” and “proposal letter” are used interchangeably.

In such cases, a “proposal letter” is meant to be a full proposal, and you should structure and write your document accordingly.

How do you write a business proposal letter?

So, let’s look at how to write a business proposal letter.

There are essential elements and strategies for composing a proposal letter that really captures attention and opens the door to valuable collaborations.

Generally speaking, you can use the following structure when writing a business proposal letter:

Introduction and background

Before you get down to the nitty-gritty of writing a proposal letter, it is essential to set the context by providing some background information in the first paragraph.

Start with a polite greeting, then introduce your company briefly.

If you have already interacted with the recipient, mention this in the letter’s opening.

You may have discussed the prospective client’s problem and agreed to a rough set of objectives.

Allude to this conversation and briefly reiterate (in a few sentences or so) why you are well-suited to provide a solution.

Statement of the problem

Next, state the purpose of the proposal, clearly outlining the problem or opportunity.

When writing a proposal letter, you can include this as part of the section above, or you may want to dedicate a few paragraphs to it, depending on the extent of the problem.

Goals and objectives

When deciding how to write a business proposal letter, it’s best to be as specific as possible when describing goals and objectives.

Objectives should be outlined in list form, preferably with figures attached. It is better to say something like, “We will increase productivity by 30% over three months,” rather than, “We will significantly boost productivity.”

You may also want to provide details about the methods you will utilize to achieve these objectives.

This is your chance to highlight your expertise.


How will customers be aware of progress? Will you send a monthly report?

Will they have access to a real-time analytics dashboard?

Who will the main point of contact be? Which metrics will you use to measure success?

When writing a business proposal letter, paint a clear picture of how you will ensure your recipients know the project is moving forward in the right direction.


It’s not usually appropriate to give a full breakdown of the costs of your proposal in your cover letter, but you should give an idea of the budget.

The project cost is a significant factor in the decision-making process, so it’s essential to include this information if you want to write an effective business proposal letter.

Call to action and contact information

Finally, include a compelling call to action in your ending. Leave your client wanting to know more.

Don’t forget to end the letter with gratitude and express openness for further discussion.

Providing a complete set of contact details at the end of the business proposal letter, including a phone number and email address, can be beneficial if clients want to call or email you directly.

Business proposal letter sample

The proposal writing sample below is to show you what a generic proposal business letter might look like. Depending on your understanding of the prospect, you may wish to make it longer or shorter or add greater detail to certain sections.

The letter should follow a traditional format and include the names and addresses of both you and your recipient in the letterhead.

Goals and objectives

Our overall goal will be to reduce the total amount of resources – staff time and overall expenditure – spent on recruitment by XX% while maintaining current results.

We will boost new staff productivity over the first XX months of employment by XX% by improving staff training processes.

We would meet several intermediary objectives to achieve this:

  1. A review of current hiring and training practices
  2. Creation of testing infrastructure and formulation of viable KPIs
  3. A testing and implementation period to identify possible positive changes
  4. Longer-term analysis and optimization of new processes over several months


You will receive a monthly report covering all of the critical KPIs.

Your main point of contact will be the team leader.

Every quarter, you will be invited to attend a presentation explaining testing outcomes, positive changes, and general progress toward the project’s objectives.


As previously discussed, the approximate cost of the project is $10,000 paid in quarterly installments over 12 months.

This payment plan is, of course, flexible and open to discussion.

Have you considered proposal writing software?

One of the easiest ways to streamline your proposal creation workflow, whether a small business or a large enterprise, is to use software like PandaDoc.

Not only can you work from a business proposal letter template based on the structures outlined above, but you can also take advantage of collaboration tools, automation features, and drag-and-drop proposal elements like electronic signatures and payment options.

If you want to give PandaDoc a test drive and see exactly what it can do for your proposal letters, you can sign up for a free 14-day trial here.