Company Description/Overview
Products/Services Offered
Market Analysis
Marketing and Sales Strategies
Operations and Management
Financial Plan
Appendices
A business plan is a detailed document laying out how the business will function and develop in its first few years. The key is the “plan” part of the name, as it will specify how you will launch, gain customers, operate, make money, and, with any luck, expand.
Yet what many first-time business owners seem to forget is that a business plan is not a static document. The initial version is based largely on assumptions, supported by research. But as you run your business you’ll learn what works and what does not and make endless tweaks to your plan.
Thus, creating a business plan is not a one-time action – it’s a dynamic and continuous process of crafting and adapting your vision and strategy.
A business plan is generally much more detailed and broader than a business proposal, and has several elements :
A business proposal is created in connection to a specific business deal being offered by one party to another. As mentioned, when you take a business plan to an investor, you’re proposing a business relationship, so in this case a business plan and a business proposal are much the same.
But a business proposal could also be for others purposes, including:
A business proposal may offer specific terms for the potential relationship, or it may be just about the benefits the relationship will bring, with terms to be negotiated later. Essentially, it’s a sales tool to get people or companies to do business with you in some way.
Business proposals can be structured in various ways, but usually, they’ll include a summary of what your company can offer, a scope of the work to be done together, and sometimes, a price quote or a proposed structure of the business relationship.
Clearly, a business plan and a business proposal are similar – and can even be one and the same. At the same time, they can also serve very different purposes. Unlike a business plan, a business proposal can have a variety of aims and thus does not have a “one size fits all” structure.
Whichever one you need, be sure to take your time with the research and writing so your business has the best chance for success.
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The terms “business plan” and “business proposal” are sometimes used interchangeably, however, they are very different. The main difference between a business plan and a business proposal is that a business plan documents your growth strategy while a business proposal is a specific ask for someone to take an action you desire (e.g., buy your product/service, invest in your company, partner with you, etc.).
In this article, we will define a business plan and a business proposal and give you examples of when each is appropriate for you to use.
Download our Ultimate Business Plan Template here
Typically, the business plan structure contains the following 10 components:
It is recommended that a business plan is updated annually to adjust for changes in the industry trends and the business itself.
In terms of what you are asking from them, it can be anything that involves funds and time on their end including cash investment, product development assistance, and even employees if they have applicable skill sets.
An invited business proposal is written in response to an RFP. A request for proposal (RFP) is a document that invites potential suppliers to submit business proposals. How to write a business proposal depends on the format requested and the questions included in the RFP.
The following are the components that usually make up a business proposal:
An unsolicited business proposal is essentially the same format, but it will solicit the client’s business while anticipating the clients’ concerns and issues. A business proposal is more of a marketing document than an offer because it attempts to persuade the potential client to do business by demonstrating your value proposition and a call to action.
In a business proposal, company representatives typically work with the customer to tailor a business proposition that is attractive to both parties. This usually comes in the form of a written document detailing the services and cost associated with fulfilling an offer or request but can also include electronic contracts.
In contrast, a business plan is a description of your company on the executive and operational levels aimed at investors for raising financial support or other stakeholders in order to facilitate long-term growth. For example, an investor will want to know about how different departments within your business interact with one another, while somebody who will be implementing your product probably only needs more limited information such as design specs because they are not going into production themselves.
A business proposal may provide you with more details of the project, but it does not include information about your company’s operations or future plans.
The business plan is a roadmap for your company’s present and future, while the business proposal has to do with what you are asking someone else for money. Applying this difference into practice can be difficult at times because business plans are often marketed as business proposals. However, it is important to be able to identify the difference between a business plan and business proposal in order to maximize their effectiveness and importance with potential investors or partners.
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
“Ok, so you sell things.”
Well, honestly, I wasn’t surprised or peeved at the half-baked knowledge of my friend’s father when he made a snap judgment and conveniently labeled my marketing profession as sales.
After all, this wasn’t my first time when someone tagged me as a salesperson. So, I took a deep breath and explained to him how sales are different from marketing.
We, humans, dwell in a herd mentality and hone our word skills from our surroundings. Sometimes, we are simply careless, sometimes oblivious, but most of the time, we actually don’t know that the word has a different meaning.
This can be ignored in a casual conversation, but using the wrong words in a business space can change the implied meaning and lead to miscommunication. For example, cost vs. price , digitization vs. digitalization , warranty vs. guarantee , machine learning vs. artificial intelligence , etc.
“Don’t use words too big for the subject. Don’t say ‘infinitely’ when you mean ‘very’; otherwise you’ll have no word left when you want to talk about something really infinite.” – C. S. Lewis
This Process Street guest post untangles the confusion between two crucial terms – business plan and business proposal. These are used interchangeably in the business world, but their meaning and application are pretty different.
Words are the building blocks of communication. There is a French phrase for using the right word – le mot juste .
Let us strive for le mot juste !
Hop on and be a part of this fantabulous journey.
What is a business proposal, business plan vs. business proposal: what are the differences.
Here we go!
A business plan is a formal guide that acts as a blueprint, deciphering every root and branch to make a business successful. It is a written document that provides insights to internal and external stakeholders on business vision, goals, and strategies to achieve those goals.
“Without a plan, even the most brilliant business can get lost. You need to have goals, create milestones and have a strategy in place to set yourself up for success.” – Yogi Berra
A business plan, at its core, is an explanation of the below questions –
A business plan is not a bag of puffery statements. It is a document with factual information necessary for the survival of a business. You can create a business plan with the right tools or opt for a good business coach to get you started.
Let’s see what Tim Berry , business plan expert, founder and chairman of Palo Alto Softwar and bplans.com , has to say on business plans.
“What I love most about business plans is the business planning: like walking, it’s constant correction and review and revision. Planning, done right, is steering a business, managing growth, aiming the business towards the right future.” – Tim Berry , Small Business Trends
According to a study done by Palo Alto Software, those who create business plans double their chances to succeed in business .
Let us get down to brass tacks and understand why a business plan is super-duper important.
Record and present business information The primary intent of a business plan is to record and communicate information. It must document the business goals and the methods to attain those goals in a structured manner. It keeps businesses on track with their objectives.
A blueprint for seeking business investment ️ Whether you are a fledgling start-up or an established business seeking expansion or diversification, writing a winning business plan acts as a magnet to attract investors. It builds confidence and trust among investors about the lucrativeness of a business idea.
Lay down the right path ✔️ Not everything discussed verbally at an ideation stage transforms into reality in a pragmatic environment. Jotting down a business plan differentiates achievable from impracticable based on market dynamics, opportunities and threats, and company’s strengths and weaknesses. It sets the right track for business growth.
Establish short-term and long-term goals A business plan sets down short-term and long-term goals and the direction to accomplish them, right from baby steps to giant leaps. It becomes a basis to revisit the goals from time-to-time and make iterations depending on the present scenario.
“Any business plan won’t survive its first encounter with reality. The reality will always be different. It will never be the plan.” – Jeff Bezos, CEO of Amazon
Get clarity on your business A frequent question that pops-up in business discussions is: “Are we doing it right?”
A well-articulated business plan brings insightful knowledge on each aspect of a business – from what it has to offer to how to market the offerings.
Make informed decisions A business plan is a reality check to track what is being fruitful and what is causing hindrance. It paves the way to make a business sustainable.
Predict future financial performance Financial projection is the spotlight of a business plan. It’s the carrot that captivates the eyeballs and tickles investors to fund a new business.
A promising business plan talks about the company’s future financial performance – expenditure, profit, revenue, etc.
Explore new business opportunities A business plan is a flexible document that enables learning on the go. It bolsters research and infuses businesses with new and more feasible business opportunities. It gives organizations a fresh outlook and ushers them to be a howling success.
Now that we have answered the ‘what’ and ‘why’ of a business plan, let us move forward to solve the next riddle – how do you prepare it?
Identify your company’s vision, mission, and values Start by answering and figuring out your business personality:
This is your organization’s compass that acts as a foundation for the succeeding steps.
Know your target audience Dig deep into:
Learn market trends Identifying market trends keeps businesses ahead of the game. Analysis of industry data leads to business growth and profitability in the long run.
Weigh in the impact of unforeseen circumstances From financial turbulence to natural calamities and pandemics – a lot can go wrong in the future and leave a business shaking. Expect the unexpected and gird your loins for these testing times.
Creating a winning business plan increases the chances of success and spurs investors to fund your business.
According to a study published in Small Business Economics , entrepreneurs that create a plan are 152% more likely to start their business and appoint a registered agent and 129% more likely to push forward with their business beyond the initial start-up phase and grow it.
Here are the key components of an excellent business plan:
Executive summary First impression is the last impression!
An executive summary is a crucial part of this document. It provides the essence of the whole plan:
It should be informative and able to spark readers’ interest to know more about the business plan.
Overview of the business This section lists down information on:
…and all other related details.
Market analysis and strategies Put forth a strong case built on the solid rock of data analysis and statistics – present data on target market size, industry trends, sales forecasts, and marketing strategy.
Operating plan The operating plan highlights the operational requirements for the smooth functioning of a business. It includes facilities, supply chain management, inventory, manufacturing, shipment, logistics, staff management – everything under the sun that covers capital and expense (CapEx) requirements.
Growth plan This section answers the question: “Where do you see the business going in the next few years?” It provides visibility to investors on the milestones and how you will make money in near future.
Marketing plan Thee marketing plan section describes how to market the offerings to create and fulfill customers’ needs (who are the customers, product positioning, pricing policy, and promotional strategies?)
Management plan This section outlines how your organization is structured and basically how strong you are together. It describes the skills, background, and responsibilities of the management team. It builds conviction that the business is in good hands and has a proficient human capital.
Financial plan and projections This is the part where numbers become the king.
It draws up deets on inflow and outflow of money, sales forecast, profit and loss statement, balance sheet, cash flow statement, and budget expense. It discloses and forecasts the company’s financial goals, profitability model, and charts a course for the coming years.
Conclusion and appendix Conclude the business plan by succinctly bringing out the key pointers – the business’s vision, mission, goals, strengths, and growth trajectory. Make it compelling and to-the-point. Add relevant appendices to strengthen your business plan.
Pro tip: Use an all-inclusive ready-made business plan template document and Process Street ‘s business plan workflow to create unbeatable business plans.
Click here to access the Business Plan Checklist!
There are varying types of business plans depending on the purpose and usage:
A business proposal is the mantra that draws you closer to win a customer or bag a project.
Generally, it is a formal response to a Request for Proposal (RFP) sent by a prospective client looking for the right solution to their problems. It explains the particulars of a seller’s offerings and convinces the buyer that the proposed solution is the gateway to their business’s success and productivity.
“And, after all, winning business is what writing proposals is all about.” ― Tom Sant, Persuasive Business Proposals: Writing to Win More Customers, Clients, and Contracts
A business proposal comprises of four main points :
A business proposal is a testimony in itself that asserts, “I am the best you can get.”
Here are the reasons why you should and must make a business proposal :
The heart of preparedness is research and further research. After all, the devil is in the details.
Talk to prospective customers, visit their website(s), read published articles, and be a know-it-all for your prospective clients.
Sort out the ‘who’ First and foremost, dig every possible information about the client:
Understand the challenges Find what’s bothering them and what is causing hindrance to their business success. Learn about their existing solution and its challenges.
Stitch the glitch and offer the best solution After a thorough review of all the points mentioned above, find the best solution to your prospective client’s problems.
List down key differentiators This will help you to beat the competition in the dust. It draws a comparison chart and puts you in a superior position.
According to Gray Mackenzie, founder of GuavaBox ,
“Prior to submitting a proposal, make sure you have clearly defined all the major points verbally with the potential customer. By discussing the scope, cost, timeline, and details prior to submitting a written proposal, you can uncover objections earlier in the process.” – Gray Mackenzie, 10 Sales Experts Share Their Best Business Proposal Tips
Let’s get down to the fundamental elements that form a business proposal. Learn how to create a business proposal that stands out and close sales.
Title page/Cover page The name says it all.
Pretty easy-peasy thing to understand, right? After all, you have been creating the title pages since school days.
Still, make a note: Always write a gripping title that intrigues prospective clients’ interest and urges them to read on.
Other components that should be included on the title page are:
Table of contents (TOC) As the name suggests, a TOC is a well-structured layout of the document. It helps to skim and scan and navigate speedily through different sections of a business proposal.
Executive summary It sets the tone for a proposal and makes the reader inquisitive about reading subsequent sections. It sums up the entire business proposal – the purpose of sharing the proposal and why and how your solution is the right fit for the prospective client. Leave no stone unturned to boast about your offerings in the executive summary.
Details of offerings This is an in-depth description of the products or services your company has to offer.
How will the offerings solve the client’s problems? This explains why your products/services are the right fit to address a prospective client’s needs and why it is a better alternative than the competition.
The methodology/implementation of offerings This section is a blanket explanation of how the promised deliverables will be executed. It provides step-by-step clarity on each action along with timelines. It gives the client peace of mind and builds trust and confidence in the offering.
Pricing, payment, and legal matters Here, you talk about the pricing structure, applicable taxes, payment schedule, cancellation policy, and how you plan to solve the legal matters (if any arise in the future).
Here are some tips for this section:
Details about your company This is an exhaustive overview of your company. Don’t forget to add relevant customer testimonials, case studies, or success stories to build your case among prospective customers.
Signatures and Call to action This is the moment that gets butterflies in your stomach; the closure. This is the concluding part of a business proposal. Here (if all your prayers get answered), you and your client sign the proposal and secure the deal. Hurray!
Pro tip: Once you send the business proposal, don’t sit idle in your cocoon day-dreaming of winning the proposal. Always proactively do follow-ups with the prospective clients and clarify their doubts.
For start-ups or small businesses, drafting a business proposal can be an unnerving experience. They work fingers to the bone to write a perfect business proposal. Spending too much time on it might lead to missing the deadline and eventually losing out on a golden opportunity.
According to a report by Better Proposal , sending a business proposal within 24 hours increases the likelihood of winning the deal by 25%.
Here’s the secret sauce to speedily create flawless business proposals :
First, pick a professionally vetted and ready-to-use business proposal template and draft a business proposal like a cakewalk. Such as the Business Proposal Template included below.
Next, always use Process Street ‘s super-powered business proposal template checklist and ensure no step gets missed in the process.
It even turns out a blessing for big businesses since they have to draft multiple proposals all the time. Templates and checklists save a lot of time, enhance productivity, and increase the chances of success.
Majorly, there are two types of business proposals:
Solicited business proposal Also known as an invited business proposal, it comes into play when a buyer, or a company, outlines its requirements and requests suppliers to present an offer. It can be a response to a public tender issued by big corporations or government agencies.
Alternatively, a solicited business proposal can also be submitted as a response to the RFP shared by a prospective client.
The difference between the two is that while the earlier one is open to all bidders, the latter’s scope is limited as it is shared with shortlisted suppliers.
Pro tip: Do a thorough check before submitting an invited business proposal. Missing out on-minute details can kick you out from their consideration list.
Unsolicited business proposal An uninvited or unsolicited business proposal is a proactive attempt to create a business opportunity. This proposal is sent to prospective clients without being asked.
The good news is, there are slim chances of your rival sending a business proposal simultaneously, so less or no competition.
The bad news is, it might breathe in the customer’s inbox for a few days and then, without being read, depart to the heavenly abode -the trash folder.
But still, like a cold call, it leaves some impression on prospective clients and shoots up the chances to cut a deal in the long run.
Pro tip: An unsolicited business proposal is mostly sent through emails. Make certain to write an attention-grabbing headline and a convincing explanation to draw attention.
Here’s a comparison chart that distinguishes between business plan and business proposal:
Here are the secret ingredients to make awesome and captivating business plans and proposals:
This is not the right place to brag about your vocabulary skills. You want the prospective customer to focus on reading rather than wasting time looking up for a word.
Always remember! Communication is the key.
So, go simple and ditch those heavy jargons.
Don’t wear-out the pupils of your prospects with long-winded documents. Capitalize on the multisensorial abilities of humans as well.
Visuals increase people’s desire to read content by 80%.
Leverage the power of visuals and make your document easily graspable by adding graphs, infographics, flowcharts, tables, images, and videos.
Do not forget to add positive feedback or customer testimonials. If similar projects have been delivered in the past, do add relevant links and case studies of that work. It helps to build trust and strengthen your case.
“Make sure you have great success stories that you can share with potential clients. At the end of the day, most, if not all, potential clients want to know you will provide value to them and generate positive ROI.” – Mathew Bivens, Podcast and marketing consultant, 10 Sales Experts Share Their Best Business Proposal Tips
Ensure the document is free from grammar and spelling errors.
Your document should reflect your brand. Bring consistency in all your documents and design them as per the brand guidelines.
Time is money!
The likelihood of getting a ‘yes’ on your business plans and business proposals depends on how fast you can create a flawless document.
Empower your organization with a smart and all-in-one document builder tool like Revv – create, communicate, collaborate, and close your documents in no time.
Business plans and business proposals are two different worlds with distinct purposes and goals. But, both play a prime role in increasing the odds of business success.
People often get the wrong end of the stick and ask for a business plan when they mean business proposal or vice-versa.
But, we don’t need to worry about that since we are now clear on what is what.
Cheers to us!
P.S: Don’t forget to subscribe to the Process Street blog to get notified of our upcoming articles. We also have a podcast “Tech Out Loud” featuring content written by respected industry leaders such as Peep Laja , Sujan Patel , Tomasz Tunguz , and more!
What is your take on business plans and business proposals? Have you ever got your wires crossed with these two terminologies? Don’t forget to post your comments below.
Hey, I'm Molly, Junior Content Writer at Process Street with a First-Class Honors Degree in Development Studies & Spanish. I love writing so much that I also have my own blog where I write about everything that interests me; from traveling solo to mindful living. Check it out at mollystovold.com .
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Business Plan Template
When you start a new business or own a young company, you often hear terms like business plan or business proposal. But the question is: do you need a business plan? Or is it a proposal that you need? Or both?
Being new to the game, these terms can seem quite intimidating, and you probably don’t know where to start.
Don’t worry. We’ve created a simple business plan vs. business proposal comparison so you can determine which one to prioritize.
Let’s start by defining them!
A business plan documents a company, its business objectives, and how it plans to achieve them. It includes data regarding business goals, marketing strategies, products, services, market research, financial projections, and the dream team.
Pretty much everything a company will use to achieve its intentions.
Okay! And what about the business proposal?
On the other hand, a business proposal is a document that describes your business’s offerings, like a product or service, to help you win potential clients and partners.
It also outlines your business, including its unique value proposition and how your company can help solve customers’ specific problems.
Now that we know the two business documents aren’t the same let’s see how they are different and in what ways.
Even though used interchangeably (and wrongly), a business plan and proposal are poles apart. Here’s how:
Before you ask why you need a business plan , it’s, first and foremost, to legitimize a business idea that you’ve been brewing in your head.
But it’s also to document company strategies, objectives, and operations that help you create a clear idea on how to achieve your company goals. All that data becomes one source of truth that works as a communication tool. That becomes your golden ticket to wooing investors and lenders.
On the other hand, a business proposal’s purpose is entirely about convincing a potential client and partner that your project is worth their time and money.
Unlike a business plan, it only focuses on a specific product, service, or opportunity instead of the entire business.
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When you write your business plan , it will typically follow a specific structure containing the following components:
Similarly, when you write a business proposal , you’ll typically encounter a structure as well. It goes like this:
A business plan’s target audience is internal stakeholders, investors, and lenders interested in your company’s long-term goals and path to success.
On the flip side, business proposals go to potential clients from established businesses. They target external or new clients, partners, or funding agencies with a specific focus on:
Do you know how many types of businesses exist today? Two words: Too many!
Now, that implies there are many different types of business plans . But here’s a quick list of the most common types:
Business proposal types can be broadly divided into two categories:
It’s already challenging to overcome market entry barriers in saturated markets and persuade potential investors. Creating a compelling business proposal and plan shouldn’t be too!
Here’s how to go about it:
It’s okay if you were confused about the difference between a business plan and a proposal before today. You now know the distinction between the two lies in their purpose, components, structure, audience, and type.
While a business plan provides a thorough overview of the entire business and targets internal stakeholders, investors, and lenders, a business proposal focuses on specific projects or opportunities and targets external clients, partners, or funding agencies.
When you understand these differences and employ the best practices in creating both documents, your business can effectively communicate its vision, strategy, and value proposition, securing a solid spot in this competitive world.
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What is the difference between a business plan and a business idea.
A business idea is a concept’s initial spark for a product, service, or opportunity. However, a business plan is a detailed document outlining how a business idea will be executed and managed.
A good proposal is 10-20 pages long. However, it can be longer based on the industry, buyer requirements, product or service type, the scale of buyer needs, and other aspects unique to the business.
The business plan comes first since it legitimizes a business idea. Then comes a proposal because it’s specific to a particular project or opportunity and not the business as a whole.
A business plan is a detailed roadmap for your entire venture. It helps you gain investments, beat competition, make sound decisions, communicate with stakeholders, and identify risks. So, yes, you need a business plan.
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Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more
Explore the distinguishing factors and circumstances that make a Business Plan or Business Proposal more fitting for driving success and growth in your enterprise. Gain insights into the purpose, audience, and strategic value of each document, and learn when it’s best to utilize a Business Plan or pitch with a Business Proposal.
Table of Contents
The main difference between a Business Plan and a Business Proposal is that a business plan is a formal document that outlines the company’s goals, strategies, market analysis, financial needs, and projections for the future, aimed at providing a roadmap for the business’s success and often used to secure funding or guide the management team. On the other hand, a business proposal is a tailored document created to pitch a specific product, service, or solution to a potential client or partner, detailing how the business can fulfill a particular need or solve a specific problem for the recipient, often with the goal of initiating a transaction or project.
A Business Plan is a comprehensive document that outlines a company’s objectives, strategies, market analysis, financial forecasts, and operational structures. It primarily serves as an internal roadmap for the company’s strategic direction and helps to attract investors by showcasing the company’s potential for growth and profit. Business plans are often developed during the foundational stages of a company and updated periodically to guide the company through different stages of growth.
A Business Proposal , on the other hand, is a targeted pitch provided to a specific client or partner to convince them to do business with you. Unlike a business plan, a business proposal is not a broad overview of the entire company. Instead, it is a customized suggestion that outlines how your business can solve a particular problem or meet a specific need of the prospective client. The proposal highlights the benefits of selecting your company’s products or services and typically includes pricing, terms, and conditions for a potential engagement or project.
A business plan should be reviewed and revised at least annually, or more frequently if there are significant changes in the market, the business model, or if new challenges or opportunities arise .
A business proposal may not be necessary when transactions are straightforward and do not require detailed explanations, such as standard retail sales or when there is already an established relationship with the client based on trust and familiarity.
Absolutely. If a proposal leads to a successful project and client satisfaction, it can serve as the foundation for a long-term business relationship and future projects or collaborations.
An unsolicited business proposal is one that is offered without an explicit request from the potential client. It often reflects the proposer’s initiative to identify potential needs of the recipient and offer solutions to unaddressed challenges.
To make a business proposal stand out, it should clearly articulate the unique value proposition, be tailored to the client’s specific needs, contain compelling and concise content, and demonstrate a deep understanding of the client’s industry and challenges.
Yes, a business proposal should ensure that all claims and statements are truthful and that no proprietary or confidential information is disclosed without permission. Additionally, the terms and conditions should be clearly outlined to avoid any misunderstandings, and if accepted, it can be the basis for a legally binding contract.
The decision between a Business Plan and a Business Proposal hinges on the specific requirements, goals, and context of your enterprise. A Business Plan lays the foundation for your company’s long-term strategy, risk mitigation, and operational guidance, with an expansive view of the business’s aims and the means to attract investors. Conversely, a Business Proposal concentrates on the immediacy of client-specific projects, presenting a tailored solution with a persuasive edge to secure contracts and foster client relationships swiftly.
Aspect | Business Plan | Business Proposal |
---|---|---|
A formal document outlining a company’s strategic direction, goals, and requirements. | A customized document designed to pitch a product or service to a potential client. | |
Used for strategic planning, securing investment, and internal guidance. | Aimed at winning a specific contract or project by addressing a client’s needs. | |
Potential investors, stakeholders, and company management. | Specific clients or partners with particular needs or requests. | |
Broad, covering all areas of the business including long-term goals and operations. | Specific to an offering that aligns with the client’s issue or challenge. | |
In-depth market analysis, financial projections, strategies, and organizational details. | Customized solutions, benefits, pricing, and terms for a prospective engagement. | |
Prepared infrequently, at startup or significant growth stages. | Generated as needed when seeking new business or responding to RFPs. | |
Standardized with sections like executive summary, market analysis, and financials. | Custom-tailored to the client’s request, often varying in structure. | |
Long-term outlook, often spanning multiple years. | Focused on a specific project or service timeframe. | |
Follows a consistent format for different uses. | Highly customized to the potential client’s requirements. | |
May seem inflexible due to its long-term and broad nature. | Adaptable and specific to client or project needs. | |
Provides a thorough business model and can attract investors with detailed planning. | Directly addresses a client’s needs and can initiate business quickly. | |
Can be time-consuming, costly, and may require frequent updating. | Lacks long-term strategic details and may depend excessively on the prospects. | |
When establishing a new business, seeking funding, and defining long-term strategy. | When targeting a client request, competitive bidding, and project-specific opportunities. | |
Both outline strategic approaches, require research, set clear objectives, are persuasive in nature, and include financial information and action plans. |
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Published: Feb 28, 2024, 2:00pm
What is a business proposal, business plan vs. business proposal, objectives of a business proposal, essential elements of a business proposal, 7 steps to write a business proposal, bottom line, frequently asked questions (faqs).
Writing a business proposal is a crucial skill if you wish to run a successful and profitable business. Knowing how to write a business proposal is not necessary for presenting your product or services in the best possible manner. It’s about convincing others that your solutions are the best fit for their needs. Crafting an effective business proposal can open doors to immense opportunities.
In this article, you will learn the essential components of an effective business proposal as well as techniques that ensure your proposal captures and retains client interest. Let’s dive in and explore the art of creating compelling business proposals.
A business proposal is a document designed to persuade a potential client or customer to buy a specific product or service. It’s a tailored argument that outlines the benefits of your approach, solution or product, specifically addressing the requirements of the recipient. A business proposal must not only communicate your vision but also persuade the recipient of the proposal to take positive action.
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Understanding the different types of business proposals is key to selecting the right approach for your situation. Typically, proposals are categorized into two main types: solicited and unsolicited.
Solicited proposals are those that are requested by a potential client, often in response to a request for proposal (RFP). These tend to have a prescribed format and specific requirements, making it crucial to follow the guidelines provided. Unsolicited proposals are not requested by a client but are sent proactively. They require a more persuasive approach as you’re introducing a solution to a problem the client may not have actively considered.
Additionally, there are informal and formal proposals. Typically, informal proposals are shorter and used in a more relaxed business setting or with existing clients. In contrast, formal proposals are longer, more detailed and used in situations requiring thorough analysis and presentation, often for new clients or large projects.
A business plan is a comprehensive document that outlines the overall vision, strategy and goals of your business. In contrast, a business proposal is a targeted pitch to a specific client or organization, offering a solution to a problem or a strategy for achieving a specific goal.
A business plan is primarily used for internal planning and, often, to secure funding from investors. A typical business plan includes an overview of your business model, market analysis, financial projections and long-term strategic plans. However, unlike the broad scope of a business plan, a proposal is your chance to showcase how your services or products can benefit the prospective client, tailored to their specific needs and challenges.
While a business plan lays out the path your business intends to take, a business proposal is a direct response to a potential client’s problem, demonstrating how you intend to solve it effectively.
A business proposal is a strategic tool that can be used in negotiations, aiming to convince a potential client or partner of the value as well as viability of your proposed solution to their problem or need. Here are some of the most important objectives of a business proposal.
The core objective of a business proposal is to persuade the recipient that your solution is the best fit for their problem or need. It’s about making a compelling case for your approach, services or products.
A well-written proposal also informs the reader. It should provide all necessary details about your solution, including how it works, its benefits and why it stands out from the competition.
Through your proposal, you demonstrate your understanding of the client’s needs and your capability to meet them. This is your chance to showcase your expertise and past successes.
A good proposal also serves as a starting point for further discussions. It opens up a channel of communication with the potential client, inviting them to negotiate terms, ask questions and seek clarifications.
Understanding these objectives can guide the tone, content and structure of your proposal. Listing your products or services is not enough. You need to craft a narrative that aligns with the client’s needs and paints a clear picture of how you can fulfill those needs effectively and efficiently.
To create an effective business proposal that persuades the recipient to take action, include these key components:
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Crafting a compelling business proposal requires the right blend of clarity, persuasion and attention to detail. The key to a successful business proposal is not just in what you include, but how you present it. Follow this step-by-step guide to ensure your proposal stands out:
After submitting the proposal, plan a follow-up strategy. This might include a phone call or an email to discuss any questions and reiterate your interest in working with the client.
The visual appeal of your business proposal plays a crucial role in its effectiveness. Here are a few tips to keep in mind while writing a proposal:
In business proposal writing, common pitfalls can significantly reduce your chances of success. Here are a few for your reference:
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In this article we’ve explored the essentials of crafting effective business proposals, distinguishing them from business plans and highlighting key components as well as common pitfalls. Equipped with these insights, your next step should be to apply this knowledge in practice.
Creating a versatile business proposal template can be a great starting point. You can then customize the template to create business proposals that win you clients and drive business success.
The main point of a business proposal is to present a tailored solution to a specific client or business problem. It aims to persuade the recipient that your approach or service is the best fit for their needs, outlining how it offers value and addresses their unique challenges. The proposal serves as a strategic tool for initiating business relationships and securing contracts.
A business funding proposal is structured to concisely present your business idea, market potential and financial needs. It typically includes an executive summary, a detailed description of the business, market analysis, specifics of the financial request and a plan for funds utilization. The proposal also highlights your business’s management team, projected financials and return on investment to assure potential investors of the viability and profitability of the venture.
The three main types of business proposals are:
A seasoned small business and technology writer and educator with more than 20 years of experience, Shweta excels in demystifying complex tech tools and concepts for small businesses. Her work has been featured in NewsWeek, Huffington Post and more. Her postgraduate degree in computer management fuels her comprehensive analysis and exploration of tech topics.
A business plan and proposal are two different documents with two different purposes and functions. 3 min read updated on July 26, 2024
A business plan and proposal are two different documents with two different purposes and functions. A business plan is a document that clearly spells out how a business intends to realize its objectives and goals, while a business proposal is a sales document that a business entity uses to request a contract from a client.
A business plan and a business proposal are different from each other by content, goals, writing style, and structure. The major difference between both is that a business plan is a document that presents facts, while a business proposal is a request for a deal and a quotation of prices.
You can think of a business plan as the documentation of a company's grand vision. Business plans are naturally tactical. It's like stating where and when you want to start, when you want to get to the next point in view, and how you intend to accomplish that progress. A business plan includes descriptions of how the business is intended to run, the details of financial goals, possible business rivalry, marketing strategy, executive summary, and other factors that affect a company's planned business growth.
A business plan is particularly effective in making potential investors interested in a company (especially a startup company that's yet to make a name in its industry). Additionally, a business plan can provide an idea of what a company requires for professionals such as attorneys, accountants, and potential employees. A business plan distinctly describes the scope of the business, and in so doing, clears your thoughts as a business owner.
The business plan should be honestly made because it's the outline of the company's vision. It indicates whether or not the business goals of the company are realistically achievable. Experts say an effective business plan would take approximately six weeks of thorough research and groundwork to create. In other words, you typically can't create an effective business plan in one day, present it to potential investors the next day, and achieve desired results.
A business proposal goes to a prospective client directly from an established business. It's an attempt to sell a business entity's service or product to a client, and not an attempt to sell the business itself. Also, a business proposal isn't an estimate. Though costs and certain other details will be provided in the business proposal, an estimate is a lot more unofficial and simply a provision to skim over the costs. It doesn't present the entire picture.
Basically, business proposals show a particular idea, such as a new, profitable undertaking. The proposal is intended to get investors to support the particular business endeavor being suggested. For instance, a well-known eatery chain may wish to extend its business to a nearby state. Such an eatery would have to compose a business proposal in order to get the financial support of its target investors.
Though the business proposal provides an overview of what the company does (similar to a business plan), its major objective is to provide the details of the suggested business idea, including providing answers in advance for any concerns that could be raised by potential investors.
Basically, a business plan has three components: business model description, sales tactics, and financial goals. However, more elaborately, it has the following sections of information:
A solicited business proposal, when presented in response to a request for proposal (RFP), should be in the format requested by the client in their RFP. The same format may or may not be used for an unsolicited business proposal. Its purpose is to suggest and develop a business idea. Therefore, it's recommended to use the same format or some other format that's well-known in the field of endeavor.
An unsolicited business proposal offers a business entity the flexibility to choose what structure they deem appropriate. However, the proposal is expected to meet industry standards, no matter what format is used. For instance, it should emphasize major areas of interest, be thoroughly researched, offer a proposition of value, and feature a call to action.
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It’s natural to get confused between a business proposal and a business plan if you are planning to turn your idea into reality. While business proposals and plans may sound similar on the surface, they have differences — such as distinct purposes and formats.
A business plan describes your business goals, strategies, and financial projections. A business proposal, on the other hand, proposes a specific solution to a problem or opportunity and helps you persuade the relevant stakeholder to invest in your business.
However, writing a business proposal or a business plan can be challenging, especially if you are confused about their purpose. In this blog, we will explain the difference between a business plan and a business proposal and its major components.
A business plan tells the investors how you plan to ship your product to enough people to clock revenue. It’s about the strategies that will make you the first buck.
A business plan keeps your team on the same page — you can use it as a guiding light. It can help you track the progress of your business, give you a roadmap, and help you make decisions about your business’s future.
Plus, it can be helpful when it comes to pitching your business idea to a third party, for example, when seeking a loan.
A business plan is majorly divided into three sections, which include an executive summary, a sales and marketing strategy, and a financial plan.
An executive summary is a brief, clear, and compelling overview of your business. It is usually the first section of the document, and it contains the most important information, such as your strengths.
These can be further broken down into the following sections:
A business proposal is a separate written document that outlines a specific business opportunity, project, or idea and presents it to potential clients.
It intends to persuade them to take action, such as accepting a business deal or entering into a partnership, thereby helping you get new customers or partners.
A business proposal should be customized to the needs and interests of the receiver. A generic proposal will rarely help you meet your business goals.
At the same time, ensure your proposal is well-organized, persuasive, and creative. Check out these free business proposal templates to impress your clients.
Proposals are solicited from you, or you send them on your initiative.
You write a solicited proposal in response to a prospect’s or customer’s request for a product. They may ask you verbally, or they may issue a written request for proposals (RFP). A solicited business proposal contains a detailed description of the product, service, or solution that you offer to solve the customer's problem or need. It’s generally easier to write because you know what the customer wants or expects.
But if you’re writing the proposal on your own, which is the case with unsolicited business proposals, then you’re convincing the receiver to work with you or buy from you. Such proposals are often challenging to write because you have to convince them they have a problem and you have a solution.
The following are the key components of a business proposal :
While a business plan outlines your goals and explains how you will achieve them, a proposal sells your product to potential customers.
In the following table, we have summarized the main differences between a business plan and a business proposal:
To wrap up, a business proposal is a document that pitches your products or services to a potential client, while a business plan outlines your goals, strategies, and financial projections for your business.
With business management software like Cone, you can easily streamline and automate your proposal creation while ensuring your proposals are bespoke and customized. Sign up for free and experience the seamless proposal creation process for yourself. While you’re at it, check out other business proposals and management resources we have for you.
Business prop os al and business plan are relatively similar but distinctively different terms, making many use these two words interchangeably.
You’ll see distinguishing features in their content, structure, writing style, purpose, and goals. Even so, there are various similarities between a business proposal and a business plan.
The main distinguishing factor to note is that a business plan documents the growth strategy and presentation of facts, while a business proposal is a specific ask for an individual to take action (buy your service/product, partner with you in business, and invest in a particular business).
Let’s look at the two terms in detail and highlight a few examples when it’s appropriate to use.
A business proposal is a company’s documentation that goes directly to its prospective client. It’s usually written in an attempt to sell a company’s product or service.
While a business proposal is not an estimate, it’ll have certain financial details. An estimate is unofficial and simply a way to skim over the real costs without presenting the real picture.
In a nutshell, a business proposal shows a particular business idea intended to get investors to support this particular endeavor being suggested.
Although a business proposal shows an overview of what the company does (just like a business plan), its main aim is to provide information about the suggested business idea.
It answers any questions or concerns potential investors may have about the suggested business idea.
Prospero business proposal software can help you easily draft a competitive and compelling proposal to beat other bids. With its user-friendly interface and various proposal templates , you don’t have to create everything from scratch.
Let’s now look at the importance of a business proposal and a business plan.
The main reason a proposal is written can only be understood based on the type of proposal you want to draft. They’re two types of proposals; invited and non-invited proposals.
An invited proposal is submitted in response to an advertisement from a potential client. A good example is government agencies inviting contractors to bid on a particular service.
Alternatively, businesses request for proposals from a group of suppliers they’re willing to consider as prospective clients.
Non-invited proposals, on the other hand, are submitted to potential clients even when they haven’t requested one. In both instances, a company must develop a compelling proposal to convince buyers.
Proposals are limited in the scope of a particular need or project and written to specific audiences.
The main reason why businesses write proposals is to solicit or grow company opportunities. You can think of a proposal as an external document to present or sell the company to external players.
It shows what the business is all about and how it intends to carry out a particular project or use that opportunity to generate revenue for both parties.
A business plan is a factual description of a company on the operational and executive levels. It’s a written presentation of a company’s grand vision.
The document is typically tactical; it states where and when you want to start a project. Moreover, it will highlight when you’ll want to move on to the next phase of the project and how to accomplish that project.
It makes potential investors interested in a company (especially small startups that haven’t made a name for themselves).
A business plan will also provide an idea of what the business requires from professionals, such as attorneys and potential employees. It indicates whether or not a company’s business goals are realistic, let alone achievable.
Business plans are visions for your company and how you intend to execute all these visions. They outline financial projections of what a business will cost to develop and operate, plus an estimate of the revenues the business will generate.
Its main purpose is to provide a reasonably detailed description of the company for use by potential investors, suppliers, accountants, and prospective employees, among other people. For instance, one of the prerequisites for an SBA loan is an extensive and organized business plan.
Moreover, it’ll provide a quick but comprehensive view of what your company does and its chances for success.
The main reason companies write business plans is to convey and record information.
Here, the two documents have various components featured on them. Here’s a detailed description of their structure below:
Overall, the structure of a proposal will depend on whether it’s solicited or unsolicited.
A solicited proposal responding to a request for proposal takes the format of an RFP. Here are the components of a business proposal:
An unsolicited proposal to create a business opportunity follows the same format. It, however, anticipates questions potential clients might have .
A proposal is a marketing document designed to convince prospects to do business by presenting a value disposition plus a call to action.
Try creating your business proposal here .
A business plan has three components; sales tactics, business model description, and financial goals. More elaborately, it consists of the following section of information:
The business plan is more like an information document displaying the company’s operation and potential.
Many companies fail to follow this format while writing their business plan or proposal, a reason why most don’t win bids or prospective clients.
Using Prospero to write a professionally compelling business proposal and integrate your business plan can help you get investors interested in your company so that they want a sit at the table.
Business proposals differ from business plans in content, writing style, purpose, goals, and structure.
The sole distinguishing factor between the two terms is that a business plan is a factual presentation of facts, whereas a business proposal is an external market document that highlights a quote and a call to action.
Let’s look at some distinguishing features between the two terms:
A business plan provides a detailed description of how the business was set up, plus its project.
On the other hand, a business proposal is a purposeful sale document illustrating how a business will execute a particular project. Usually, it’s drawn and submitted to another enterprise or organization putting forward a business arrangement.
In addition, the structure of a business plan contains three elements, including a description of the business model , sales tactics, and financial projections.
On the other hand, the structure of a business proposal takes the format of an RFP if it’s solicited.
A business plan shows the scope of a business and, in turn, clarifies your thinking as a business owner and also gives you information that you hadn’t considered before.
Conversely, proposals show a limited scope of a specific project or need for a particular audience.
While trying to craft these two documents, you must seek proficient experts to help you write compelling proposals and plans to convince potential investors and other partners to invest in your business.
A business proposal can be divided into solicited and unsolicited proposals. How different are they? Let’s delve right in.
This is presented in response to a request for proposal (RFP) . It’s usually submitted responding to a work statement from sponsors.
These sponsors use the request for proposal to solicit a specific proposal for research, training, or to provide services or goods. The RFP includes standard terms, conditions, and assurance that the company is asked to accept.
A good example is when an organization or government agency wanting to buy products or services from a particular sector invites contractors to place bids.
In other scenarios, some businesses will ask suppliers to provide RFP to those they’re considering a partnership with.
The business is competing against other businesses that want to secure the same contract. It’s, therefore, in their best interest to provide compelling and competitive business proposals.
Prospero can assist you in such instances; it has the experience and expertise to curate excellent proposals that win contracts. Call it today to generate a proposal with its Prospero business proposal generator.
This proposal is submitted to potential clients, even when they haven’t asked for one.
In such circumstances, a business wanting to secure a contract will suggest a product or service to a potential organization in return for funds.
A good example is when an organization tends a proposal to develop an application or renders some training services to its staff.
Just like solicited business proposals, a company must curate a well-researched proposal that will convince prospective clients you’re the right candidate for the job.
Business plans are also categorized into four types, including
These types require different degrees of labor and are not always proportional to results.
Presentation Plan
Using PowerPoint to present information about a business has revolutionized the way companies create and showcase their business plans. Many business owners lose sleep trying to figure out how to present a plan that can significantly impact their company’s future.
Therefore, it’s crucial to understand the ins and outs of a business plan presentation in order to effectively communicate your ideas and strategies to potential investors or stakeholders.
This is a plan used to operate your business. The plan can be long in detail but shorter in presentation. There’s no room for informality or candor while preparing it.
If you’re considering presenting this plan to a loan committee, you’ll have to describe a competing rival primarily on a price basis.
A working plan used to create outlines for internal use may have some elements omitted; probably, you’ll not need to add an appendix with a resume of key executives.
Internal policy considerations may guide what to include or exclude in the working plan.
A business must prepare for unforeseen circumstances. The company may want to have a contingency plan when seeking bank financing.
This plan is usually curated in the worst-case scenario that you can foresee your business surviving. It’s important to shelter yourself from things like loss of market share, the defection of a key member of management, and heavy price competition.
A contingency plan can help cover the fears of bankers and investors by demonstrating that your business has considered more than one rosy circumstance.
Moreover, your business can benefit from a what-if plan in situation acquisition. It can help you outline the worth of the acquisition and how it can affect the core business.
In summary, you can say that a business plan is more of an internal document, whereas a business proposal is an external one that is used to sell the product or service of a company to prospective clients.
In addition, a business plan guides the activities of a company internally in terms of revenue projections and marketing strategies that must be achieved in a particular time frame.
On the other hand, a business proposal will show external parties like a government agency and sponsors what the business is all about to convince them to invest in your business. The proposal should outline how you will carry out a particular project to generate revenue.
Whether trying to curate a business plan or proposal, it has to be compelling and competitive to beat other bidders.
Working with Prospero to generate professionally written proposals or plans is essentially wise. It has a variety of templates for different industries and comes with a lot of customization options. Some ready-made content are also available so you won’t need to write from scratch every now and then.
You can manage and track the performance of your proposals through its built-in analytics, so your sales team would be more productive and efficient.
It’ll increase your chances of securing contracts and proposals that can take the business to the next level.
Sign up today and create your first proposal!
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A business plan and a business proposal are very different documents, with different purposes and goals. A business plan is a factual broad description of a company on the executive and operational level. A business proposal is a focused sales document intended to describe how a company will approach a project, state the value of the project to the client and solicit the client's business. A business plan is a written presentation of fact. A business proposal is a quote and call to action.
A business plan documents your vision for your business and how you intend to achieve that vision. It contains financial projections of what the business will cost to develop and operate plus an estimation of the revenues to be generated. Its purpose is to provide a reasonably detailed explanation of your business for use by potential investors, suppliers, prospective employees, accountants, attorneys and other people who need a quick but comprehensive understanding of what your company does and its potential for success. The primary reason for a business plan is to record and convey information.
Proposals may be unsolicited business ideas presented to a potential customer or partner, or they may be answers to requests for proposal submitted to your company by a potential client. They are limited in scope to a particular project or need. A business proposal also generally has a specific audience. The primary reason for a business proposal is to solicit or develop a business opportunity.
A business plan has three elements: description of the business model, the marketing model and financial projections. It consists of informative sections, including the executive summary, business description, marketing model, analysis of industry competition, build-out plan, operations plan, introduction of management, and a discussion of financial issues and projection of results. It is introduced by an executive summary, which can be a dense abstract or a longer marketing tool to attract interest in the business plan. The business plan is an informational document designed to factually display your company's operations and potential.
A business proposal written in response to a Request for Proposal (RFP) should follow the format requested in the RFP. Generally, this involves a quick description of your company's services and products that are relevant to the goals of the RFP, a reiteration of the scope of work, answers to specific questions posed in the RFP and a quote detailing materials, tools, labor, delivery and other elements of the cost of the project.
An unsolicited business proposal intended to create and develop a business opportunity follows essentially the same format but anticipates questions the potential client might have. A proposal is more of a marketing document, designed to convince the audience to do business by presenting a value proposition and a call to action.
Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.
5 types of business documents, what does a business plan consist of, the importance of a business plan, what is the relationship between the business plan, marketing plan & sales plan, examples of business feasibility reports, the differences between a business plan & business model, reasons to convert a pdf to microsoft word, what are the six elements of a business plan, mission statement vs. executive summary, most popular.
Briana Morgaine
8 min. read
Updated March 18, 2024
A business proposal can make or break your chances of securing a new client. Write a great one, and you’ll likely snag their business.
Write a poor one, and you might lose out—even if you’re offering the best service out there. So, how do you write a business proposal? What is the proper format? What do you need to include?
While it all depends on your industry, and whether or not you’re offering a product or service, writing a business proposal is pretty straightforward. We’ll answer all those questions and more throughout the course of this guide.
Whether you’re starting fresh or need to look at a specific section, here’s what we’ll be covering in this guide.
You can download a free business proposal template here to start writing up your own proposal as you work through this article. By the end, you’ll be prepared to develop a well-written business proposal that can explain your business clearly and win more clients. Let’s get started.
A business proposal is a document you’d send to a prospective client, outlining the service you’re offering, and explaining why you’re the best person for the job.
It’s a pitch by a business or individual to complete a specific job or project, to supply a service, or, in some instances, to be the vendor of a certain product.
A business proposal can be either solicited or unsolicited. With a solicited proposal, the prospective client will put out a request for proposals; with an unsolicited business proposal, you are approaching a client in hopes of attracting their business, even though they did not explicitly request a proposal.
While both are commonplace, a solicited proposal is an easier sell, as your prospective client has already decided that they want to make a purchase or use a service, and they’re evaluating possible vendors or businesses.
With a solicited proposal, your prospective client might have issued an RFP, or “request for proposal.” This is exactly what it sounds like—they want you to send over a business proposal so they can take a look at it.
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A business proposal is not the same as a business plan . This is the most common misconception, but while there are areas of overlap (like your executive summary ) the two are different.
That being said, you can certainly pull information from your business plan while writing your business proposal—in fact, that’s a great way to start.
But don’t confuse the two; they are distinct and separate. In short, a business plan represents the cohesive strategy of how your business operates and makes money. A business proposal is an official pitch to clients selling your products or services.
A business proposal outlines a particular product or service offered by an established business to a prospective client.
You’re trying to sell your prospective client on your product or service, not on your business itself. You’re not after funding, as you are with a business plan, you’re trying to make a sale.
A business proposal is also not an estimate; although you’ll likely touch on costs and pricing in your business proposal, an estimate is much more informal and just a quick look at the costs, not the whole picture.
Your business proposal should address the three Ps:
If you’re stuck on how to start, maybe try brainstorming first; start with these three points, and you’ll have a rough, bare-bones version of your business proposal.
Once you’ve done that if you’re ready to go more in-depth, here is a step-by-step look at how to format your business proposal.
Your business proposal should start with a title page, which should include your name, the name of your company, the name of the person to whom you’re submitting your proposal, and the date submitted.
Depending on how long your business proposal is, a table of contents is a nice touch. Include it after your title page, and before you launch into any details. If you’re delivering it as a PDF, including anchor links down to each section, so it’s easy to get to specific areas.
Introduce your proposal with a great executive summary, one that really sells your business and the products or services you provide—it’s about why you’re the right company for the job. You can draw from your business plan’s executive summary here, too.
Following your executive summary, go on to discuss the problem that the client is currently facing. Think of “problem” or “issue” loosely; after all, their main problem may just be finding the right person to complete their project. But be sure you understand why they want the product or service they’re seeking. If the proposal is for developing a brand new website, make sure you understand what they want to get out of the site—better sales, more content management flexibility.
This is the place to show your new client that you understand their needs , and fully grasp the issue they are trying to solve. Take this opportunity to restate the issue they are facing in your own words so that they know you understand what they are looking for.
This section shows how you plan to tackle your potential client’s problem, and the steps you’ll take to carry out your plan.
This is where you’ll get into the nitty-gritty of how you actually plan to fulfill your client’s needs. While earlier sections might have been a bit surface-level, this section of the business proposal is where you’ll go into detail about what steps you’ll take to solve their problem.
Be careful of going into too much detail, though—keep the jargon to a minimum. Your client should be able to follow along and get a clear sense of your plan, but you don’t want to drown them in minutiae.
Go ahead, brag a little—this is the section of your business proposal where you get to convince your potential client why you are the most qualified person to take on the job.
You can mention any relevant education, industry-specific training, or certifications you have, your past successful projects of a similar nature, years of experience, and so on.
Be clear with your potential client: How long will your proposed project take?
Making sure you and your prospective client are on the same page from the outset will help make sure that the relationship stays positive for both of you, and that you don’t set your client up with unrealistic expectations.
While you might be tempted to underestimate how long it will take you to complete the project, don’t. Don’t promise what you can’t deliver!
If you’re offering a product, this section might not be applicable to you, so feel free to omit it. The business proposal format is flexible, so tailor it to suit your business and industry.
Here is where you get down to brass tacks and state the cost, and payment schedule if necessary.
How you structure this section will largely depend on the particular project or service you are offering. A section entitled “Fee Summary” may be sufficient if one-time payment is required; otherwise, a “Fee Schedule” list or pricing table might be more appropriate. Always refer back to the client’s RFP whenever possible, to make sure you’re supplying them with all the information they need to help make their decision.
If there are any legal issues to attend to, such as permits or licensing, include this information here. Feel free to add a section entirely devoted to handling the legal side of the project if need be.
This is your final sell—don’t be afraid to detail for your prospective client all they have to gain by choosing you to complete the project.
Impress upon your clients why you are the best choice, and all the ways in which their business will benefit from choosing you and your business as their solution.
When it comes to the format of a business proposal, this is the million-dollar question without an answer. Remember in school, when you’d ask your teacher how long an essay should be, and they’d reply, “as long as it takes to answer the question.”
The same applies to your business proposal. It ultimately depends on your industry, the scope of the project, and the client’s specifications in terms of detail and elements included.
That being said, the tighter your initial proposal can be and the more directly you can make your point, the easier it will be to pitch it to clients. Start by following the business proposal format above as a guide, and you’ll be well on your way to creating a winning business proposal—and securing new clients.
Bri Morgaine is a seasoned content marketing leader with a decade of experience in copy editing, social media operations, and content strategy— having honed her skills at industry giants like Palo Alto Software and Andreessen Horowitz.
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What's the difference.
A business plan is a comprehensive document that outlines the goals, strategies, and financial projections of a business over a specific period of time. It serves as a roadmap for the business and is typically used internally to guide decision-making and operations. On the other hand, a business proposal is a document that is created to pitch a specific product or service to potential clients or investors. It outlines the benefits, costs, and potential outcomes of the proposed project in order to persuade the recipient to take action. While a business plan focuses on the overall strategy and operations of a business, a business proposal is more targeted and specific to a particular project or opportunity.
Attribute | Business Plan | Business Proposal |
---|---|---|
Purpose | Outlines the goals and strategies of a business | Proposes a specific project or service to a potential client or investor |
Audience | Internal stakeholders, investors, lenders | External clients, investors, partners |
Length | Can be comprehensive and detailed | Usually shorter and more focused |
Scope | Covers all aspects of the business | Focuses on a specific project or opportunity |
Implementation | Guides the execution of the business strategy | Outlines how the proposed project will be carried out |
Introduction.
When it comes to starting a new business or expanding an existing one, having a well-thought-out plan is essential. Two common documents used in the business world are the business plan and the business proposal. While they may sound similar, they serve different purposes and have distinct attributes that set them apart.
A business plan is a comprehensive document that outlines the goals, strategies, and financial projections of a business. It serves as a roadmap for the business and is typically used internally to guide decision-making and track progress. On the other hand, a business proposal is a document that is used to pitch a product or service to potential clients or investors. It outlines the benefits of the offering and explains why the recipient should choose to work with the business.
One of the key differences between a business plan and a business proposal is their scope. A business plan is typically a long-term document that covers all aspects of the business, including marketing, operations, and financials. It is meant to provide a comprehensive overview of the business and its goals. On the other hand, a business proposal is more focused and specific. It is tailored to a particular project or opportunity and is designed to persuade the recipient to take a specific action, such as investing in the business or purchasing a product.
Another difference between a business plan and a business proposal is their content. A business plan typically includes sections such as an executive summary, company description, market analysis, marketing strategy, operational plan, and financial projections. It is a detailed document that provides a thorough overview of the business and its operations. In contrast, a business proposal is more concise and focused. It usually includes sections such as an introduction, problem statement, proposed solution, benefits, and pricing. The goal of a business proposal is to persuade the recipient to take a specific action, such as signing a contract or making a purchase.
Business plans are typically used internally by business owners, managers, and stakeholders to guide decision-making and track progress. They are also used to secure funding from investors or lenders. A well-written business plan can help attract investors and convince them of the viability of the business. On the other hand, business proposals are used externally to pitch products or services to potential clients or investors. They are often used in sales and marketing efforts to generate new business opportunities. A well-crafted business proposal can help win new clients and grow the business.
In conclusion, while business plans and business proposals may sound similar, they serve different purposes and have distinct attributes that set them apart. A business plan is a comprehensive document that outlines the goals, strategies, and financial projections of a business, while a business proposal is a focused document that is used to pitch a product or service to potential clients or investors. Understanding the differences between the two documents is essential for any business owner looking to start or grow their business.
Comparisons may contain inaccurate information about people, places, or facts. Please report any issues.
Whether you are in business, employment, or college pursuing a degree, understanding the basics of a business proposal is a skill that you must have. Most people use the terms business plan and business proposal interchangeably. These two documents are very different. A business plan is different from a business proposal in terms of content, structure, writing style, goals, and purpose. The most important difference to note is that a business plan is a written presentation of fact while a business proposal is a price quote and a call to action.
According to an article on Entrepreneur.com , a business plan is a document that outlines a detailed description of how a business is set up. It is a 5-year plan of a business showing the company structure, products and services, market findings from research, marketing strategy, planned budget and financial projections. It can be simply defined as the factual and wide description of a business and its projections. A business plan can be drawn by a start-up as well as a going concern.
A business proposal is a purposeful sales document formulated to illustrate how a business will carry out a project, give the value of the project to the prospective client and ask for the client's business. Therefore, it is a document that a business submits to another enterprise or organization putting forward a business arrangement.
A business plan ideally comprises three elements: description of the business model, the marketing strategy and financial projections. It includes informative sections, specifically the executive summary, business description (products and services), marketing plan, industry analysis (competitor analysis), build-out plan, internal analysis, operations plan, leadership structure or introduction of management, and financial projections -- discussion of financial concern and projection of results. The opening page is the executive summary. It can be an intense abstract or a detailed but precise marketing tool to draw interest in the plan. The business plan is an informational document intended to factually showcase the company's operations, goals and potential.
According to Sean Kerner from Tech Republic, the format of a business proposal depends on whether it solicited or unsolicited. A solicited proposal and in response to an RFP should take the format called for in the RFP. Usually, this entails a quick description of the services and products offered by your business and clearly showing their relevance to the goals of the RFP, a replication of the scope of work, response to specific questions raised in the RFP and a quotation detailing materials, equipment, labor, delivery and other basics of the project outlay. An unsolicited business proposal may or may not take the same format. The intention is to create and develop a business opportunity, and so it is advisable to follow the same format or any other that is popular with the industry or business. Be keen to address all the questions that the potential client might have. With an unsolicited proposal, it is up to you to decide the structure. Whichever format you choose, ensure that the proposal is professional, highlights key areas of interest, presents a value proposition, is thoroughly researched and loaded with facts and with a call to action.
A business plan is required for two main reasons. It clearly defines the scope of the business and in the process clarifies your thinking as the proprietor of the business. It offers you information that had not been considered previously. Simply put, it documents the vision of the business and how it will be achieved. This guides the business towards a practical strategy to guide the business for the time-frame enclosed by the plan. It is the blueprint to success of the business. It outlines strategies for converting the ideas into core competencies. It also presents the financial projections of starting and operating the business as well as estimation of revenue generation from business activities. Secondly, it offers comprehensive business information for use by potential investors and employees, suppliers, accountants, attorneys and other stakeholders. The primary function for a business plan is to record and pass on information.
A business plan is also used to raise funds in form of a business loan, venture capitalist, angel investors or incubation. When approaching these money lenders you must present a thoroughly researched and realistic business plan. The investors need to be sure that you are confident and truthful about the market statistics and financial projections indicated in the report. A business plan should be as truthful as possible because it is the blueprint and vision of the company. It provides a checklist of whether the objectives of the business are on track. According to experts, a professional business plan requires about six weeks of in-depth research and preparation. It is not possible to whip one a day before your appointment with investors.
The reason for a business proposal can be well explained based on the type of the proposal. There are two major types of business proposals: invited and non-invited. An invited proposal is submitted in response to an advertisement from the buyer or client. For instance, organization and government agencies wanting to purchases services and products from private suppliers invite contractors to place their bids. Alternatively, some businesses ask for Request for Proposals (RFP) from a selection of suppliers that they willing to consider as a prospective partner. In each case, the business is competing against other bidders. It is in the interest of your business to present a competitive and compelling business proposal.
Non-invited or unsolicited proposals are submitted to potential clients even when they have not requested for one. In this scenario, you give suggestions to the company or organization to purchase services or products in return for funds. For instance, you can tender a proposal to develop an app for an organization or training services for its staff. The most important thing in both cases is to come up with well researched offer to convince buyers. A business proposal is limited to the scope of the specific project or need. In addition, it has a specific audience. The primary function for a proposal is to solicit or grow a business opportunity.
You can look a business plan as more of an internal document. A proposal on the other hand is an external document used for presenting or selling the business to an external player. A business plan guides the activities of the business internally in terms of marketing strategies and revenue projections that should be achieved. A proposal shows the external players such as governments, donors or business partners what the business is all about and how it intends to carry out a project at hand or use the opportunity to generate revue for both partners.
For more information, here is an article on how to write a business proposal .
Entrepreneur.com: An Introduction to Business Plans https://www.entrepreneur.com/article/38290
If you want your business proposals, price quotes, and contracts to stand out above your competitors and give you the best chance at winning new clients, use ClientPoint's Proposal Software . It makes creating and formatting professional business proposals, price quotes, and contracts fast and easy.
Proposal writing tips, a business proposal checklist to help you win more clients, 8 reasons why paper-based business proposals are dead and digital business proposals are superior, what is a business proposal and how to write it for b2b sales.
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Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.
Investopedia / Ryan Oakley
Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.
Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.
A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.
There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.
While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.
A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.
While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.
Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.
The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.
Common elements in many business plans include:
Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.
Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.
A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.
How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.
The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.
A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.
As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.
University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.
Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."
Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."
Harvard Business Review. " How to Write a Winning Business Plan ."
U.S. Small Business Administration. " Write Your Business Plan ."
SCORE. " When and Why Should You Review Your Business Plan? "
One of the most searched queries on Google is "business proposal vs business plan", and we are here to break the confusion.
April 13, 2023
What's Inside?
You are starting a new business, and you aren't sure what you need to do. You heard that you needed a business proposal and a business plan, but you weren't sure what's the difference between them.
You did some research and couldn't find what you are looking for... You decided to create both of them, but you need weeks to write and refine them.
Don't worry, we are here to remove this confusing process. Let's see what's the difference between them. You may, and probably do need both of them. But which one should be your priority?
When you're starting a business, one of the most important things you'll need to do is create a business plan . This document will outline your company's goals and strategies for achieving them over the next five years.
A business proposal , on the other hand, is a sales document that you put together to pitch potential projects to clients. It's not the same as a business plan, and it usually includes cost quotes for potential projects.
The main difference between a business proposal and a business plan is that, while a business plan is informative, a business proposal is intended to showcase operations, goals, and potential.
The executive summary of a business plan will include information about the company leadership structure or the introduction of management. Generally, business plans include an executive summary part while business plans don't.
We have seen some samples that use executive summaries but since the main goal is to close a deal. We suggest keeping them short and clean.
The business proposal format depends on whether the business is solicited or unsolicited . Details of products and services offered, the scope of work and responses to specific questions in an RFP are included in a business proposal.
A business plan documents the vision of a business and how it will be achieved. A business proposal offers comprehensive information for potential investors, suppliers, accountants, etc.
A proposal shows the external player what the company is all about and how it intends to carry out its project. Keep these differences in mind when you're putting together your next business presentation --you'll need to tailor your content accordingly!
A business plan is a document that outlines the business goals, strategies, and tactics a company will use to achieve those goals. The business plan also includes an overview of the company, its management team, the target market, and the products and services the company plans to offer.
It usually includes information about the company's products and services, target market, marketing plans , financial forecasts, and management team bios.
Here's a sample template to use while creating a detailed business plan.
A business plan is a key document for any business. It lays out the goals and strategy of the business and helps to ensure that everyone involved in the business is on the same page. It can also be used as a tool to help secure funding from investors or banks.
A business plan is a document that outlines the strategy and goals of a company. It can be used as a planning tool , to track progress, or as a basis for making decisions . A well-written business plan provides a roadmap for the business , and it can help attract investors or partners.
There are many reasons to create a business plan. Some of the most common reasons include:
A business proposal is a written document that offers a solution to a problem or a way to achieve a goal. It is often used to sell products or services to a potential customer. A business proposal must be well-written, clear, and concise in order to convince the reader to take the desired action.
A business proposal is a formal response sent to an RFP (request for proposals). It is a way for the seller to convince the buyer that their proposed solution is the right one in order to win business. Business proposals are meant to persuade a prospective client.
A business proposal typically consists of four main points: what are the challenges, how your solution solves the problems, why they should choose you over others, and the best pricing options available. The price is typically stated in the document. If a business is requesting proposals, they should be sent in their format. An RFP response should include specific details about the scope of work and the cost estimate.
Here's a sample template to use while creating a detailed business proposal.
A business proposal is a key part of the business development process . It is a document that outlines the business goals, strategies, and tactics that will be used to achieve those goals. A proposal is used to convince potential clients or partners that your business is the best option for them.
It's typically used to pitch an idea to a potential client or customer. A well-crafted proposal can help you win new business and close deals.
Your company might be expanding into a new market and need to propose a new product or service. Or, you might be approached by another company with an opportunity you'd like to explore. Maybe you've identified a gap in the market and want to propose a new product or service to fill it.
Well, we do have a comprehensive guide to business proposal creation with templates and examples, but if you need a more brief explanation, keep reading!
When preparing for a business proposal, it is important to do your research and understand the client's needs. You should also have a clear understanding of your own company's capabilities and what you can offer the client. Additionally, it is important to be well-organized and to have a strong pitch.
You should have a clear understanding of your target audience and what will appeal to them. You also need to have a good grasp of the competition and what they are offering. In addition, you should be familiar with the terms and conditions of any potential contracts that may be involved.
Your proposal should be neatly formatted and easy to read. It should also be free of grammatical errors and typos. Be sure to proofread your work carefully before submitting it.
Make sure you provide complete contact information, as well as an outline of your proposed solution or service. If possible, include testimonials from past clients who have been satisfied with your work.
Remember that you are offering a valuable service that can help the reader achieve their goals. Believe in yourself and your ability to succeed, and you will be able to deliver a winning proposal every time
When writing a business proposal, make sure to follow this brief outline:
- Introduce yourself and your company
- Outline the proposal's purpose
- Explain the problem that you're trying to solve
- Describe your solution
- Explain the benefits of your solution
- List your qualifications
- Request a meeting
It should include an overview of the product or service, information about the company proposing it, financial projections, and terms and conditions. A well-crafted proposal can help your company win new contracts and increase sales.
Here's another sample template you can use while creating a business proposal:
Here's a story of our customer John who joined the Decktopus community 2 years ago.
John had been working in sales for years, but he had never worked in a company that sold products. When he was hired by a new startup, he was excited about starting making sales and increasing profits. However, he soon realized that there was no one in the company who knew how to sell. The founder of the company told him that he would need to create a presentation template to share with the other reps.
John wasn't sure where to start. He read article after article, trying to gather information about what made a good business proposal. After weeks of research, he finally created a template that he felt confident in sharing with his fellow reps. He was excited to see how it would help them increase sales and profits.
This is the outline we gathered while our support team helped him along the way:
-Executive Summary
-Problem/Opportunity Statement
-Business Plan
- Marketing Plan
-Financial Plan
An unsolicited proposal is one in which the company offers a product or service to a potential customer who has not solicited it. Here's an unsolicited proposal template .
A solicited proposal is one in which the company responds to a request for proposal (RFP) from a potential customer. Here's a solicited proposal template .
A proposal to bid is a document that a company submits to a potential customer in response to an RFP.
The purpose of the proposal to bid is to persuade the potential customer that the bidder's product or service is the best option among those being considered.
Here's a proposal to bid template .
A business plan has three main sections: the executive summary, a description of the business model, and financial projections.
The first section is an introduction that should be no more than one or two pages long. It should include a brief overview of your company, its products and services, and how you plan to make money.
The second section, a description of the business model, provides details about your company's competitive landscape, industry trends, and how you plan to reach your target market.
The marketing model is an informative section that should include detailed information about the industry competition and build-out plan. This part of the document can be several pages long and will help investors understand your company's place in the market.
While all three sections are important, remember that potential investors will likely focus on the financial projections most closely when deciding whether to invest in your company. The financial projections section is important because it shows potential investors how you expect your business to grow over time.
A well-crafted business plan can help convince potential investors to put their money into your company.
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A business plan and a business proposal are two distinct documents. Most people mistake them for each other, and a lot of articles on the internet that teach how to write a business proposal are actually just explaining how to write a business plan.
While a business plan focuses on a company’s goals, the problems and solutions it’s trying to address, its potential market size, keys to success, products and services, market execution, and more, a business proposal on the other hand usually focuses on how a certain project would be executed, states a quote for the project, terms & conditions, and several other key pointers.
These two documents are very different with each serving distinct purposes. So it is important you know whether what you need is a business plan or a business proposal at any time.
See Also: 10 Reasons To Write A Business Plan
A business plan envisions your pipe dream. It shows how your business goals, objectives, philosophies, industry analysis, target market, products & services, market execution, competitive analysis, financial projections, and a whole lot more will position the business for success.
It is a detailed document that investors, banks, accountants, and financially savvy individuals can easily review to know what your business is about, its chances of success, and how you’ve planned to scale.
In preparing a business plan, here is a sample structure you should follow to get it done right:
See Also: How To Write A Business Plan: The Complete Guide
Business proposals are usually solicited or unsolicited. A solicited business proposal is written upon request from an organization, institution, or individual. For example, if you receive a Request For Proposal (RFP), what you’re preparing would be a solicited business proposal. In this instance, you’d have to follow the requirements as stated in the RFP.
An unsolicited business proposal, on the other hand, is prepared in response to a client after a sales meeting, giving you more flexibility in curating the contents of the proposal.
Business proposals are limited in scope, and are thus, written for a specific audience.
Here’s a sample business proposal structure:
In your business proposal, you will detail the scope of the work, materials needed, cost estimates, project timeline, previous clients, team members, achievements, and a whole lot more in the body of the proposal. It’s a marketing tool, and its goal is to convince the target customer to do business with you.
See Also: How To Write A Winning Business Proposal: The Complete Guide
The variations between a business plan and business proposal are wide apart. As shown in this article, they serve different audiences and are prepared for different reasons.
If your goal is to seek investment or a bank loan, a bank and investor ready business plan is what you need. But if your goals are to convince a client to use your service whether the client has asked for a document showing how much value you’d add to them or not, a business proposal is what you need.
See Also: How To Write A Feasibility Study Report: The Complete Guide
Image Source: businessnewsdaily.com
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thanks for these information it is really gearing forward toward my goal.
I’m glad you find it valuable, Yusuf.
Do have a great time!
Thanks Edom, I have been reading your publication, they have inspiring, informative, education and above all priceless. keep up the good work.
samuel Chika
Thank you for the kind words and for being a reader, Chika.
I appreciate them.
Great read.I have always confused the two terms.Business plan means you plan for a business and that business has not yet started but business proposal it means you propose something in a business which is ready stand.Thanks for the detailed information.
You’re right Michael.
I’m glad you learned something from the article.
in my understanding, business plan is general road map for the company strategy, but business proposal is one away to find new market or potential client.
I was searching difference between B.Proposal and B.Plan. I found here, Thanks for the publication. IF you also publish “Samples” besides the templates will be more helpful to a person like me, who did not write proposal before.
My Best Regards
Thank you for reading and for the suggestion.
Hello Stan E.,
This is absolutely spot on. No unnecessary embellishments or needless journey. Straight to the point, self-explanatory and informative.
Thanks a million, Sir.
Thank you for reading, Figo.
Not many people really know the differences. They used both interchangeably. Thanks for the clarity.
Thanks Edom, your publication was most helpful to me. I am grateful sir, continue with the good work.
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Understanding the distinction between a business plan vs a business proposal is vital for entrepreneurs and business owners. While both documents are fundamental to the lifecycle of a business, their purposes, structures, and target audiences differ significantly. This article clarifies these differences and outlines their unique components.
A business plan is a comprehensive document that outlines a business’s strategic direction and future plans. It serves as a roadmap, detailing the vision, operational strategies, and financial forecasts to guide internal management and attract investors. Conversely, a business proposal is a targeted pitch to secure a specific project or relationship. It focuses on convincing a particular client or partner of the business’s capability to solve a specific problem or to deliver a proposed project.
Business plan details.
A typical business plan includes several key components:
Learn how to create a professional business plan that sets your company up for success in our article “Business Plan: Write one like a pro” .
The structure of a business proposal often includes:
Business plan audience.
The primary audience for a business plan includes internal stakeholders, investors, and financial institutions. It aims to provide a detailed and factual representation of the business’s potential and strategic plans for growth.
Business proposals are directed at potential clients or partners. The focus is external, aiming to establish a contractual relationship based on the specific needs and problems of the recipient.
Types of business plans.
Determining whether a business plan or a business proposal should be created first depends largely on your immediate business needs. Generally, a business plan should be crafted first as it establishes a comprehensive foundation for your business’s structure, goals, and strategies. This document is crucial for internal clarity and securing initial funding, which is essential before reaching out to potential clients or partners.
Once your business plan is in place, you can focus on specific opportunities for growth and collaboration, which is where the business proposal comes into play. A business proposal is typically crafted in response to a specific opportunity, aiming to adapt the strategic insights from your business plan to meet the needs and solve the problems of a potential client or partner.
Having a robust business plan in place first guides your business’s strategic direction and strengthens your business proposals. It allows you to pull relevant information from a well-thought-out business plan to create tailored proposals that directly address the needs and challenges of prospective clients. This sequence ensures that your proposals are backed by a solid business strategy, enhancing credibility and the likelihood of securing contracts.
Creating effective business plans and proposals involves clarity, thorough market research, well-defined objectives, and a persuasive presentation. Both documents should be visually appealing and align with the professional tone of the business. Utilizing tools like Modeliks can significantly streamline the process, offering templates and interactive elements to enhance the professionalism and effectiveness of your documents.
Modeliks provides cutting-edge tools that assist in crafting detailed documents. With features designed to simplify the creation process, enhance the layout, and present data interactively, M odeliks helps businesses present their cases persuasively.
Ready to take your business to the next level? Start with Modeliks today. Enhance the quality of your business plans and proposals with our robust suite of tools designed to deliver precision and professionalism. Sign up for Modeliks and revolutionize how you present your business strategies.
August 5, 2024
July 29, 2024
A business plan and a business proposal are very different documents. If you do an Internet search for how to write a business proposal, the results are predominantly focused on writing a business plan. Nevertheless, the two documents have different purposes and goals. A business plan is a factual broad description of a company and its prospects. A business proposal is a focused sales document intended to describe how a company will approach a project, state the value of the project to the client, and solicit the client's business. A business plan is a written presentation of facts. A business proposal is a quote and call to action.
A business plan documents your vision for your business and how you intend to achieve that vision. It contains financial projections of what the business will cost to develop and operate plus an estimation of the revenues to be generated. Its purpose is to provide a reasonably detailed explanation of your business for use by potential investors, suppliers, prospective employees, accountants, attorneys, and other people who need a quick but comprehensive understanding of what your company does and its potential for success. The primary reason for a business plan is to record and convey information.
Proposals may be unsolicited business ideas presented to a potential customer or partner, or they may be answers to requests for proposals submitted to your company by a potential client. They are limited in scope to a particular project or need. A business proposal also generally has a specific audience. The primary reason for a business proposal is to solicit or develop a business opportunity.
A business plan has three elements: description of the business model , the marketing model, and financial projections. It consists of informative sections, including the executive summary, business description, marketing model, analysis of industry competition, build-out plan, operations plan, the introduction of management, and a discussion of financial issues and projection of results. It is introduced by an executive summary, which can be a dense abstract or a longer marketing tool to attract interest in the business plan. The business plan is an informational document designed to factually display your company's operations and potential.
A business proposal is written in response to an RFP--A request for proposal (RFP) is a document that solicits proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service or valuable asset, to potential suppliers to submit business proposals --should follow the format requested in the RFP.
Generally, this involves a quick description of your company's services and products that are relevant to the goals of the RFP, a reiteration of the scope of work, answers to specific questions posed in the RFP and a quote detailing materials, tools, labor, delivery and other elements of the cost of the project. An unsolicited business proposal intended to create and develop a business opportunity follows essentially the same format but anticipates questions the potential client might have. A proposal is more of a marketing document, designed to convince the audience to do business by presenting a value proposition and a call to action.
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27 comments on “ the difference between a business plan and a business proposal ”.
Great work! the topic is really an interesting one, well a business plan is something organizing your work like with QuickBooks tool hub, and the business proposal is the opposite of the latter one. For better account, management one should download the QuickBooks tool hub. keep it up the great work. looking towards your next blog.
This could be the best and most simplified article on this issue I’ve come across. Straight to the point and very informative.
I have really liked it and thus so much grateful of the author,,, High arcuity comrades
i have never found it broken down as easy as this before. Thank you. it’s very helpful
Amazing job! The best and most informative article explicitly calling out the purpose and goals of a Business Plan and a Business Proposal.
I really found it helpful. Thank you
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I appreciate your thought there with that one, because of course I agree, but I’m confused with why you thought it should be added. Don’t you think plan vs. actual is included with point 3, “It’s specific. You can track results against plan,” and then point 8 “It has to bring the planning process with it, meaning regular review and course correction?”
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Every day, you’re paying a tax that Congress never voted on, a tax that’s growing rapidly heavier. Yet you may not even know when you’re paying this tax because it goes by another name: tariffs . It is baked into the prices of products, from sneakers to semiconductors to compression springs, that are manufactured abroad or that use imported components or materials—that is, a large portion of the things Americans buy.
As the presidential election approaches, all signs point to higher tariffs on American imports—no matter who wins. (While Vice President Kamala Harris was the clear favorite to be the Democratic nominee as this article went to press, it’s safe to say that any potential rival would have a similar trade agenda.) The consequences will reach far beyond those ballooning hidden taxes that Americans pay. They will also influence global geopolitics and touch every business and consumer in the U.S., plus billions more worldwide.
The trend is still hard to believe, for those who have been following the issue. After decades of working for freer trade worldwide, the U.S. has reversed course, with both parties on board. The two sides don’t offer identical trade proposals— Donald Trump’s would be much more severe—but broadly speaking, this is a rare issue on which both sides of the aisle are aligned.
Both parties are pursuing this agenda to assert their commitment to protecting American industry and jobs from overseas competition—but business mostly doesn’t like it, especially companies selling consumer goods to price-sensitive customers already wary of inflation. “Unfortunately, there does seem to be this movement within both parties to turn insular and turn away from trade in ways that will be economically damaging,” says Neil Bradley, chief policy officer at the U.S. Chamber of Commerce. “They’re going to end up hurting average Americans.”
Tariff proponents, in making their case, often cloud how they work. Tariffs require U.S. importers of foreign goods and services to pay duties to the U.S. Treasury, based on what was imported. Research over decades finds that importers pass the extra cost on to consumers in the form of higher prices—or they are forced to cut costs or accept lower profits.
This simple fact tends to be missing from the populist rhetoric: The exporting country does not pay the tariff. The importing company does. Donald Trump’s campaign boasts that as president, Trump “imposed tariffs on China that brought billions of dollars into the federal Treasury”—failing to note that it was American consumers and companies who paid those billions. Joe Biden’s White House said often that tariffs he imposed “protect American workers and businesses,” without mentioning that those tariffs have also hurt many workers and businesses.
David French, the National Retail Federation’s top government relations executive, tells Fortune , “Our hope is the next administration will move into a more comprehensive nontariff trade barrier discussion that includes multilateral negotiations. We’d love to be writing trade deals again.”
He’s likely to be disappointed. As the campaigning heats up, Democrats will likely stand on Biden’s record of imposing tariffs, pointing proudly to steeply increased tariffs on Chinese steel, aluminum, semiconductors, electric vehicles, batteries, solar cells, and more.
Trump goes much further, proposing a 60% tariff on all Chinese imports and a universal 10% tariff on imports from all countries—radically high and broad tariffs not seen in the U.S. since World War II. Goldman Sachs calculates Trump’s program would raise inflation by 1.1 percentage points and reduce GDP growth by a half point, a significant drop when GDP has most recently been growing at an annual rate of only 1.4%. Trump’s tariffs would cost a middle-income household $1,700 a year, according to the Peterson Institute for International Economics.
News that the U.S. is enthusiastically cranking up tariffs under both parties would have sounded otherworldly for most of the past 75 years. For the first portion of U.S. history, the bulk of the federal government’s revenue—in some years nearly 100%—came from tariffs. The country began to trim its reliance on tariffs after a 1913 constitutional amendment allowed income tax. Then, at the end of World War II, 28 countries banded together to negotiate agreements that would reduce tariffs and other trade barriers, reasoning that lowering these barriers to free trade would leave all the participating countries better off. That group’s successor, the World Trade Organization (WTO), today has 164 member countries, whose progress over the decades has been dramatic. In 1948, the U.S. collected duties that were 14% of the value of all tariffed imports and 6% of total imports. By 2017, the respective tariff rates had plunged to 5% and 1%.
Then everything changed. In 2018, President Trump—who had famously tweeted that “trade wars are good, and easy to win”—followed through by launching a grand-scale trade war. He imposed a slew of tariffs that eventually covered Argentina, Brazil, Canada, China, the European Union, India, Mexico, and South Korea. Most of those countries quickly launched retaliatory tariffs against the U.S.—which in turn hurt American manufacturers’ ability to compete in those growing overseas markets.
Result of the trade war: a draw at best. U.S. imports fell, but so did exports because of the retaliation, according to an extensive analysis, The Return to Protectionism , by researchers at several universities. (The pandemic did not distort the results, which were published in February 2020.) The authors found that U.S. consumers and firms that bought imports lost $52 billion. And, the researchers observed, the tariffs appeared to be intensely political: Industries that were protected by U.S. tariffs were concentrated in electorally competitive counties.
It doesn’t sound like a policy triumph, or even a political one for Trump: Foreign retaliatory tariffs disproportionately hit industries in Republican counties, and of course Trump lost his bid for reelection. Yet while President Biden changed many of Trump’s policies, he barely touched Trump’s tariffs, keeping nearly all of those he inherited and adding many more, mostly targeting China.
“During the first couple years of this presidency, with the challenge of inflation, there was every incentive to think about ways to reduce inflationary pressure, including the reduction of tariffs—yet it appears that keeping the tariffs against China was a higher priority,” says Theodore Bunzel, head of Lazard Geopolitical Advisory at the Lazard financial advisory and asset management firm. “That is striking in terms of the sea change it represents.”
Put simply: U.S. protectionism, which reached its apex in the Great Depression and was nearly extinct by 2017, has been growing again, with bipartisan support.
Meanwhile, beyond tariffs, the geopolitical forces that prompted today’s trade wars, prominently including the U.S.–China rivalry, have elevated business’s role in policy. “CEOs today have a new job in Washington,” says Klaus Kleinfeld, who dealt with trade policy when he was CEO of Alcoa and Arconic . “It’s broader than tariffs.” Companies and technology have become crucial players in international relations. “Corporations have increasingly become both the objects and instruments of foreign policy,” wrote Lazard’s Bunzel, Jami Miscik, and Peter Orszag in a recent article in Foreign Affairs .
Examples are everywhere. Elon Musk’s Starlink satellite-based internet service plays a vital role in Russia’s war with Ukraine. The U.S. forbids Nvidia from selling its most advanced chips for AI to China. The CHIPS and Science Act subsidizes semiconductor makers—American (such as Intel) and foreign (such as Taiwan’s TSMC and South Korea’s Samsung)—to build factories in the U.S.
Or consider Microsoft’s April announcement that it was investing $1.5 billion in G42, an AI company based in Abu Dhabi, capital of the United Arab Emirates. The announcement didn’t mention a critical element of the deal: that G42 would get rid of all its Chinese equipment, including that made by Huawei, the giant Chinese tech company that the U.S. considers a national security threat.
Business may have to face starkly different government priorities and geopolitical realities depending on who wins the election, with Democrats likely to follow Biden’s lead on these issues. Biden embraced America’s alliances, notably NATO, while Trump has disdained them, even threatening to take the U.S. out of NATO. Biden called Russian President Vladimir Putin “a killer,” while Trump has often praised him. Biden refused to meet with North Korean leader Kim Jong Un without preconditions, while Trump met with Kim three times, saying they “fell in love.”
Businesspeople like to say they can play to win if they know the rules. What they hate is when the rules keep changing. The outlook: With both political parties eager to reshape U.S. engagement in the global economy, wise business leaders will be checking the rules every morning.
Whatever comes next, here’s how U.S. companies can prepare . Bring in dedicated policy expertise. Says Theodore Bunzel of Lazard: “We’re seeing a lot more companies designating a chief policy officer or chief geopolitical officer.”
Do realistic scenario planning. What would your business do if a conflict—think Gaza or Ukraine—suddenly escalates? What if a major U.S. ally shifts its majority party in a national election, as the U.K. and France did recently? Apply such scenarios to an internal stress test: How would your business fare?
Accept that lobbying doesn’t work as it used to. Pleas to Uncle Sam for protection based on national security will be received more favorably than traditional arguments based on economics.
Run the numbers. How would Trump’s proposed 60% tariff on all imports from China and his universal 10% tariff affect your company and industry? What retaliatory responses seem likely? Consider adjusting your company strategy based on your findings.
Where the Democrats and Republicans stand on other issues business cares about . Taxes The future of the wide-ranging 2017 Tax Cuts and Jobs Act, scheduled to expire at the end of 2025, is the big question. Trump, who signed it into law, wants to extend it. Democrats want to let it expire. Among the many changes for business if the law expires: –Taxes on noncorporate businesses, like sole proprietorships, would rise. –The corporate tax rate could rise from 21%, but exactly how much would be determined by Congress. The pre-TCJA rate was 35%. –Companies would no longer be allowed to deduct the full cost of capital investments in the year spent, and instead would have to amortize the cost over a period of years.
Regulation Trump would roll back regulation, much as he did in 2017. The Democratic nominee would likely continue Biden’s regulation of companies’ actions affecting the environment, energy, finance, and mergers.
Immigration The Democratic Party platform will emphasize securing the southern border, consistent with Biden’s recent toughened stance—increasing deportations and denying asylum to migrants who cross unlawfully. Trump has promised the “largest deportation operation” in U.S. history.
Labor The Democratic Party will strongly support labor unions. Trump has been courting union members, but as president he was not labor-friendly: The AFL-CIO called his record “catastrophic and devastating.”
Targeted countries will retaliate. They always do, and have done so over the past six years. China, for example, retaliated against Trump’s tariffs by imposing tariffs on U.S. agriculture products that China imports from several states. Those farm states may not have many people, but each has two senators who weren’t happy. Trump learned that lesson and now promises to retaliate against the retaliators by enacting the Trump Reciprocal Trade Act, which he recently explained to a Wisconsin audience thus: “Reciprocal trade—that’s you screw us, we screw you.” Such tit-for-tat tariffs can escalate quickly.
Foreign companies will find work-arounds. Shein, a fast-growing fast-fashion Chinese retailer selling globally, uses a curious business model. Rather than shipping merchandise to the U.S. in large, economical containers for distribution to customers from U.S. warehouses, it mails U.S. customers’ individual purchases direct from China. One reason: Packages valued at less than $800 are exempt from U.S. tariffs. A congressional report says the American retailer Gap Inc. paid $700 million in import duties in 2022 while Shein paid nothing—being the exporter, not the importer—and the situation didn’t help the American company compete with the Chinese one. While Gap Inc. likely passed along the cost of its tariffs to customers, driving up its prices, it’s hard to imagine many of Shein’s U.S. customers bought $800 worth of $7 sweatshirts and $1 earrings and had to pay duties.
As protectionism expands, it will become complex and tangled. The appliance maker Whirlpool’s experience is cautionary. One of Trump’s first trade actions was to impose steep tariffs on imported large residential washing machines. “It was a moment-in-time solution that allowed us to regain our competitive footing,” says Whirlpool general counsel Kyle De Jong. “Eighty percent of what we sell in the U.S., we make in the U.S.” But those measures expired in 2023, and now U.S. tariffs are working against Whirlpool. The company must pay tariffs on some component parts that are available only in China, but when those same components arrive in the U.S. inside Asian-made washers, they aren’t separately tariffed. In addition, Whirlpool uses American-made steel to ensure a localized supply chain while avoiding tariffed imported Chinese steel. But De Jong points out that the company’s foreign competitors can use that cheaper Chinese metal in their products. “That’s the competitive dynamic we’re concerned about,” he says, “the unintended consequences for American manufacturing.”
Hurried tariffs may be the worst tariffs of all. James Wallar, a retired Treasury official and trade expert, argues in a recent article that the Trump and Biden administrations opted “for speed and optics rather than careful analysis following international rules.” Imposing tariffs on one country, as Trump and Biden have mostly done, is fast and easy for constituents and voters to understand. But significant change generally comes via multilateral negotiations, not piecemeal actions against individual countries. Wallar says the Biden administration undermined its own international profile and ability to exert pressure on other countries. Its quick and narrow tariffs on China “might look tough domestically—protection and tariffs are politically popular among voters,” he says, “but it has diminished U.S. global leadership on trade policy and its effectiveness in promoting permanent change.”
Additional reporting by Alena Botro s A version of this article appears in the August/September 2024 issue of Fortune with the headline, “What can business expect from the next president?”
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In Closing. Clearly, a business plan and a business proposal are similar - and can even be one and the same. At the same time, they can also serve very different purposes. Unlike a business plan, a business proposal can have a variety of aims and thus does not have a "one size fits all" structure.
The main difference between a business plan and a business proposal is that a business plan documents your growth strategy while a business proposal is a specific ask for someone to take an action you desire (e.g., buy your product/service, invest in your company, partner with you, etc.). In this article, we will define a business plan and a ...
A promising business plan talks about the company's future financial performance - expenditure, profit, revenue, etc. Explore new business opportunities. A business plan is a flexible document that enables learning on the go. It bolsters research and infuses businesses with new and more feasible business opportunities.
While a business plan provides a thorough overview of the entire business and targets internal stakeholders, investors, and lenders, a business proposal focuses on specific projects or opportunities and targets external clients, partners, or funding agencies. When you understand these differences and employ the best practices in creating both ...
Business Plan vs Proposal Summary. The decision between a Business Plan and a Business Proposal hinges on the specific requirements, goals, and context of your enterprise. A Business Plan lays the foundation for your company's long-term strategy, risk mitigation, and operational guidance, with an expansive view of the business's aims and ...
Business Plan vs. Business Proposal. A business plan is a comprehensive document that outlines the overall vision, strategy and goals of your business. In contrast, a business proposal is a ...
Business Plan vs. Business Proposal. A business plan and a business proposal are different from each other by content, goals, writing style, and structure. The major difference between both is that a business plan is a document that presents facts, while a business proposal is a request for a deal and a quotation of prices. ...
A business plan describes your business goals, strategies, and financial projections. A business proposal, on the other hand, proposes a specific solution to a problem or opportunity and helps you persuade the relevant stakeholder to invest in your business. However, writing a business proposal or a business plan can be challenging, especially ...
Length differences. Whilst business plans usually span between 15 and 30 pages, business proposals vary in length, based on what information the client has requested. 10 pages is usually a good starting point for a business proposal and not many will eclipse this number. This means that a business proposal has fewer pages than a business plan ...
Business Proposal vs. Business Plan. A business plan provides a detailed description of how the business was set up, plus its project. On the other hand, a business proposal is a purposeful sale document illustrating how a business will execute a particular project. Usually, it's drawn and submitted to another enterprise or organization ...
A business plan is a factual broad description of a company on the executive and operational level. A business proposal is a focused sales document intended to describe how a company will approach ...
A business proposal is a document you'd send to a prospective client, outlining the service you're offering, and explaining why you're the best person for the job. It's a pitch by a business or individual to complete a specific job or project, to supply a service, or, in some instances, to be the vendor of a certain product.
A business plan is a comprehensive document that outlines the goals, strategies, and financial projections of a business, while a business proposal is a focused document that is used to pitch a product or service to potential clients or investors. Understanding the differences between the two documents is essential for any business owner ...
The most important difference to note is that a business plan is a written presentation of fact while a business proposal is a price quote and a call to action. Definition. According to an article on Entrepreneur.com, a business plan is a document that outlines a detailed description of how a business is set up. It is a 5-year plan of a ...
Business Plan: A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. A business plan lays out a written plan from a ...
A business proposal, on the other hand, is a sales document that you put together to pitch potential projects to clients.It's not the same as a business plan, and it usually includes cost quotes for potential projects. The main difference between a business proposal and a business plan is that, while a business plan is informative, a business proposal is intended to showcase operations, goals ...
While a business plan focuses on a company's goals, the problems and solutions it's trying to address, its potential market size, keys to success, products and services, market execution, and more, a business proposal on the other hand usually focuses on how a certain project would be executed, states a quote for the project, terms ...
3:I[5613,[],""] 5:I[1778,[],""] 4:["slug","business-plan-vs-business-proposal","d"] 0:["QsP_lgIWRSCs_WgBQ9Ouk",[[["",{"children":["resources",{"children":["business ...
A business plan and a business proposal are very different documents. If you do an Internet search for how to write a business proposal, the results are predominantly focused on writing a business plan. Nevertheless, the two documents have different purposes and goals. A business plan is a factual broad description of a company and its prospects.
A good business plan guides you through each stage of starting and managing your business. You'll use your business plan as a roadmap for how to structure, run, and grow your new business. It's a way to think through the key elements of your business. Business plans can help you get funding or bring on new business partners.
Meanwhile, beyond tariffs, the geopolitical forces that prompted today's trade wars, prominently including the U.S.-China rivalry, have elevated business's role in policy.
The proposal was to the left of the one floated by Biden, who wanted to build on the Affordable Care Act, but not as progressive as Sen. Bernie Sanders' Medicare-for-All plan, which she co ...
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But in other key areas, they have expressed goals without fully articulating how they plan to achieve them. By Tim Smart Contributor Aug. 2, 2024, at 1:53 p.m. The Economy Under Trump vs. Harris