A proposal is an initial document that outlines the framework for establishing a project’s concept.
An efficient proposal streamlines the professional relationship between outside stakeholders and your organization.
Typically, a project proposal includes an executive summary of your goals, i.e., what you want to accomplish, a description of objectives, and plans for achieving them.
What is the purpose of a project proposal, and why do you need it?
Creating a proposal allows an organization to establish a formal, logical presentation to a project backer or an outside contributor/worker.
- The primary purpose of a proposal is to attract a sponsor or financier to invest in your new project, service, or program.
- The project proposal is there to get all team members aligned in their thinking, facing the same direction and setting the same goals and priorities.
- Lastly, proposals are a great way to decide on new budget adjustments and overall pricing, hiring decisions, etc.
What will you get with a well-established project proposal?
A project proposal is the sum of the initial steps to get the endeavor up and running.
In that sense, drafting a clear project proposal early on comes with the following advantages:
- Coherent proposals clarify project requirements and business goals, make them aligned, and help convey expected outcomes in a way everyone can understand.
- Well-established proposals prove the feasibility and applicability of a project.
- With a clear proposal, you can establish the base structure of the project and its organization upfront. This is a way to significantly reduce misalignments, leading to better collaboration and decision-making.
- A comprehensive proposal helps in better identifying the required resources (personnel, hardware, software, and budget), which enables their efficient allocation and management.
- A well-established project proposal, by detecting potential risks and challenges in advance, helps teams to develop strategies for mitigating those risks, thus reducing the chances of project failure.
- A proposal with a well-defined project timeline and set milestones helps in managing time more efficiently, ensuring that the project is completed within the agreed upon timeframe.
- By having a detailed project proposal, it’s possible to make estimations accurate and effective.
- Proposals with clearly defined milestones and deliverables are much easier in terms of their monitoring.
- A well-crafted proposal often acts as a motivator for stakeholders to invest in the project.
- A comprehensive proposal means fewer changes, accidents, or bugs.
It’s essential your proposal grabs the attention of the decision-makers and that it gets delivered with clarity and confidence.
If you believe in your project, it’ll show in your proposal.
How to write a project proposal
Remember your primary reason for writing a project proposal: convince key people to support your project and obtain the executive buy-in for it.
You need decision-makers hooked on your idea, so much so that they’ll feel motivated to greenlight the project.
If this is the first time you are handling project proposals, check out PandaDoc for project proposal templates to avoid potential mistakes and deliver a professional solution that will make you look good to your clients.
Step 1. Define the problem
What problem is your project trying to address, and what’s making it a problem in the first place? Is this issue worth solving?
In presenting the problem, start strong; describe your project pain point succinctly in a way it resonates with your target audience.
Although it is important to make the audience see the problem the way you see it, use facts instead of opinions and rely on the data you’ve gathered through research.
Here is an example of a problem definition within a project proposal:
The e-commerce platform faced an increasing customer churn rate over the past six months. The current churn rate has risen to 15%, compared to the industry average of 10%, negatively impacting revenue and long-term growth potential.
The primary factors contributing to this problem include a lack of personalized product recommendations, slow website performance, and inadequate customer support.
This issue is worth solving because reducing customer churn will result in higher customer retention, increased customer lifetime value, and greater profitability for the business.
Before embarking on this journey, be confident in the way you understand what’s referred to as the “triple constraint” — time, scope, and cost — also known as the project management triangle.
Know your triple constraint throughout every step of the project and address it when and where needed in the proposal.
Step 2. Present your solution
Make your audience see that your way of solving this problem is better than everyone else’s; show/explain why other solutions won’t work, or won’t work as well, and guide them through your problem-solving process.
When talking about solutions, anticipate questions and objections and be ready to defend your solution.
PandaDoc offers special presentation templates where you can find appropriate options for showcasing your future solution.
Do your best to paint a picture where the audience understands the solution’s larger impact. Once again, facts and research-backed examples are your friends.
Step 3. Define your deliverables and success criteria
This step starts with identifying project objectives and then breaking them down into sub-objectives and deliverables sequentially.
Deliverables are specific, measurable, and tangible items that are produced to fulfill the objectives of an entire project, separate tasks or processes individually, and satisfy the requirements of stakeholders.
For example, if the objective is “Improve user experience on the e-commerce platform to increase customer satisfaction and reduce churn rate.” Sub-objectives might look as follows:
- Enhance website performance
- Implement personalized product recommendations
- Improve customer support
Potential deliverables for the first sub-objective:
- A website performance audit report, identifying areas for improvement
- An optimized website with faster page load times
- A website performance monitoring dashboard
For the second one:
- A recommendation engine design document, outlining the algorithm and implementation details
- A fully integrated recommendation engine within the e-commerce platform
- A user guide and training materials for the recommendation engine
And for the third one:
- A customer support analysis report, highlighting areas for improvement
- A revised customer support process flowchart
- A customer support training program for staff
- An updated knowledge base for customer self-service
Step 4. State your strategy
This is the most crucial section of the proposal, as it outlines the strategic approach you will take to achieve the project’s objectives.
Here you must detail the approach, methods, and techniques you will use to achieve the objectives of the project.
To state your strategy within the project proposal preparation, follow these steps:
- Introduce your strategy by providing a brief overview of the strategic approach you will take to accomplish the project’s goals.
- Describe the project management methodology you will use (e.g., Agile, Waterfall, or Hybrid) and justify your choice based on the project’s nature, complexity, and constraints.
- Detail the specific components and techniques that make up your strategy. This may include resource allocation, risk management, quality assurance, communication, and change management, among others. Provide a clear explanation of how these components will work together to support the project’s objectives.
- Define roles and responsibilities among team members and stakeholders to ensure efficient collaboration, communication, and accountability throughout the project.
- Discuss your approach to managing resources. Explain how you will allocate resources efficiently and effectively to support the project’s strategic objectives.
- Present the project timeline, including key milestones and deadlines that align with your strategic approach. Explain how these milestones will help monitor progress, manage risks, and ensure the project stays on track.
- Identify potential challenges and risks that may arise during the project and explain how your strategy addresses these concerns. Discuss your approach to risk management, mitigation, and contingency planning.
- Conclude the strategy section by emphasizing the benefits and advantages of your chosen approach. Explain how your strategy is designed to deliver the desired outcomes and meet stakeholder expectations.
Step 5. Outline your schedule and budget
This is the section where you break your budget down into categories (tools, supplies, etc.) and include both direct and indirect costs.
The key is to provide as much detail as possible so stakeholders can see you’ve done your research.
Outline your project schedule as precisely as possible.
Convey the project lifecycle by concretely communicating start and end times, and do not rely on assumptions within this step!
PandaDoc has platform assets designed especially to help this business need.
You can use this free universal budget proposal template, easily modifying it to the specifics of your project.
You can also read our special article on how to create a project budget proposal for more details.
Another feature, named pricing tables, is aimed at presenting complex, multicomponent calculations like budgets.
You can add each separate expenditure item to make your budget fully transparent for all stakeholders.
Step 6. Tie it all together
The conclusion of your proposal should briefly recap the problem, solution, and benefits.
Emphasize the parts of your proposal you want your audience to remember by restating crucial ideas, facts, and (of course) the solutions you’re prepared to deliver.
Before submitting/presenting the proposal in real time, check it for the consistency of ideas, and make sure it has a pleasant, easy-to-follow flow.
It should tell a story, and make a cohesive whole out of all sections.
Try not to include elements that don’t contribute to the overall project objectives or seem off for any reason.
Ensure all the necessary elements of your proposal have been addressed.
Step 7. Edit/proofread your proposal
Make the necessary edits to your proposal to make it clear, helpful, and persuasive.
Ensure the proposal is attractive, organized, and visually appealing.
Check the tone and language. And don’t forget to proofread for grammar, punctuation, or spelling mistakes. Ask for feedback.
What are the different types of project proposals?
These five are the most common types of project proposals segmented by their different goals and requirements.
1. Formally/informally solicited project proposals
A formally solicited proposal comes with specific directions.
An informally solicited project proposal is usually requested verbally or via an informal communication channel, making it, perhaps, the trickiest type of project proposal to write.
As it doesn’t come with the same level of context as the formal one, the proposal writer and their project team will have to do a lot of research to get someone else’s idea approved.
2. Unsolicited project proposals
An unsolicited project proposal format is one that no one asked for but they potentially may want to see nonetheless.
They usually come from those “aha” moments we have throughout the workday. Essentially, they are more complex than an elevator pitch but perhaps less structured than solicited proposals.
To get this type of proposal approved, you’ll need to do a lot of work, but it could have a great impact on your business.
3. Continuation project proposals
This type of proposal is usually done on a calendar basis and is a considerably lower lift in the proposal department as the project itself has already been approved.
This type of project proposal is conducted when a project enters a new phase or new resources are needed to guarantee its continuance.
4. Renewal project proposals
Marginally different from a continuation project proposal, renewal project proposals are written when a project has ended and needs to start up again.
You’ll typically use the success data of the previous project for any (new) research for this renewal proposal.
5. Supplemental project proposals
These proposals are written when you need more resources than you initially requested or if you have gone over budget on the project.
What’s the difference between proposals vs contracts?
A project proposal is not a contract, so it’s crucial not to confuse it with a business proposal.
Unlike a business proposal that outlines legal terms and conditions for acquiring a product or service, sponsors sign the project proposal to approve its contents.
Once the proposal is signed and approved, a business starts drafting a contract along with a project plan, project charter, project timeframe, and similar contractual aspects.
Things to consider before writing a project proposal
Before starting on your next project proposal outline, make sure you consider the following:
- Identify your target audience, as they are your primary decision-makers.
- Focus on the type of relationship you are looking to cultivate with them and think of ways to accomplish that.
Here are some questions to ask yourself before writing your project proposal:
- How familiar is your audience with the proposed project scope? What do they know? (And what don’t they know?)
- What do they want to hear? What would be the best way to communicate your idea so it’s understood easily?
- Does your proposal need to provide background information and supplemental material on a particular topic?
Potential drawbacks and pitfalls
The root causes of why project proposals get rejected within organizations comes down to these four points:
- The proposal is poorly defined
- The proposal is not aligned with the goals of the organization
- The proposal does not clearly and credibly define the benefits of the project
- The proposal is not effectively presented and sold
Data and research
Each proposal must be enforced with facts, graphs, figures, and charts all sensibly lined up.
Do some research on past projects — both successful and unsuccessful ones — to gather as much useful, complex data, evidence, and examples to best apply what works with respect to creating winning documents.
Examine previous case studies to be able to compare them with your present project objectives and proposed solution.
All this knowledge you find should help you create solid project proposals that lead to successful outcomes.
Check out how the PandaDoc platform can meet your needs when it comes to drafting proposals and so much more.
Just sign up for a free 14-day trial and see how we can assist making all your proposals a thing of beauty!
Originally published December 16, 2021, updated May 18, 2023