What is a Business Proposal Letter?

You may have heard of a business proposal before, and that you need one for your business. This is all true, but what is a business proposal, really? Simply put, it’s a document that you send to customers in an attempt to win their business. Knowing this makes it pretty easy to see why many business experts and analysts are so emphatic about writing successful business proposal being a must-have skill for small-business owners, independent contractors and/or entrepreneurs hoping to win customers and grow their business.

However, developing the skills needed to create a successful business proposal doesn’t just happen by accident. You need a plan and a system to get there, one that starts with a firm understanding of what goes into a business proposal and what it looks like. The first step to this is dispelling one of the most common misconceptions about business proposals is that they are the same as or nearly the same as a Business Plan.

While both are documents, you use to grow your business, the two are completely separate and distinct:

Business Plan: This is a formal business document that states your business’s plan and how you intend to achieve it. A business is used to chart the development of your business and attract investors and therefore, tend to stay fairly consistent with time.

Business Proposal: A business proposal is a living document that can and must change each time you use it. This is because a proposal is a key part of your marketing strategy. Its sole job is to secure business, the particular sale, customer, or project it was carefully prepared for. So unlike a plan, a proposal must be uniquely customized for the prospective client you send it to every time you send it out in order to do its job.

Why You Need to Use a Business Proposal Letter

The world changes every day and business changes with it. As the Internet, social media, and mobile technology bring the world closer together, the ability for businesses to reach a wider audience with both their messages and products is ever increasing. This means more and more businesses are competing for the same customers in newly emerging global markets across traditional and niche business categories alike. Today, more than ever, businesses must differentiate themselves from the sea of competition. Skill and the proper tools are needed to do this.

One such tool businesses use to create excitement about their product and brand is a well-drafted, customized business proposal that absolutely captivates your customer’s attention and directly dials them into why you offer the best product, service, or solution to their needs. This is, or should be, the goal of all business proposals. Sadly, many business owners think they can create a generic business proposal and then simply spam it to thousands of unsolicited email addresses to grow their business. This is just not how a business proposal works. Business proposals are carefully crafted marketing documents. In fact, the art & craft of writing a business proposal has evolved quite a bit over their years. Today, there is an elaborate list of Dos & Dont’s that include:

Do

  • Do make every single proposal you send out unique.
  • Do ensure it is clear and easily understood.
  • Do research your competition to make sure you stand out.
  • Do be flexible and remember your proposal is only a tool that you can change at any time.

Don’t

  • Don’t send out a cookie-cutter proposal that doesn’t even talk about the client you are sending it to.
  • Don’t send out a proposal that is poorly formatted, hard to read, or full of huge blocks of text that intimidate readers.
  • Don’t pretend like your proposal is written in stone and refuse to change it if a customer asks.

Though it’s very common, the mistake many business owners and entrepreneurs make of sending out impersonal business proposals that talk more about themselves instead of the client’s needs can sabotage a proposal. Couple this with another common misconception is that the terms offered in a proposal cannot be changed, and it becomes clear why so many businesses fail to win clients with their proposals.

To help you avoid common mistakes like these and others, let’s look at 6 key things you can do with your business proposals that will truly set you apart and beat out the competition.

Below are 6 Keys on How to Write a Business Proposal Successfully:

Gold KeyResearch Your Customer

The list of Dos & Dont’s above makes one thing absolutely clear, it’s impossible to write an effective business proposal without first knowing the most about this potential customer you’re writing to. So, the first key on how to write a business proposal that will transform potential customers into actual business, is to find out as much as possible about the customer you’re sending the proposal to. There are a few specific things you should try to do as you research the potential customer:

  • Learn all you can about their customers: When you go to research the client you’re sending a proposal to, spend some time getting to know who they serve. Understanding what your customer needs to do for their own customers will give you strong insight into their priorities. This understanding lets you present your service or product in a way that clearly demonstrates how you will help them with their #1 priority, making satisfied customers of their own.
  • Learn all you can about their competition: Also research their market to see who their major competition is and how they do business. This will help you understand what standards and market expectations they must meet or exceed so that, once again, you know how to sell your own product or services in a way that clearly points out how you can help them beat their competition.
  • Meet or talk with Your Potential Customer before Presenting the Proposal:This is one of the best things you can do for a number of reasons. First, it’s an excellent way to develop a sense of familiarity between each other, and also help share more info about who you are and how you do business. Second, it’s also the best way possible to find out key pieces of information you’ll need and want to include in the business proposal. So you’ll want to come prepared with specific questions like:
    • What are the major pains, issues, or problems you are currently experiencing that led you to ask for this business proposal?
    • When you look at your company’s big picture, are there any other underlying issues that may be causing or influencing the current problems you are looking for help with?
    • What, in your opinion, would be the best way to go about fixing your current problems?

The bottom line is that the more you know about your potential customer, the more you can help them get to where they want to be and make them happy. This means you can more easily demonstrate to them why and how you can help them succeed by putting it in terms they understand. That is, in terms of their customers and competition.

Gold KeyStart Off Strong

The second key on how to write a business proposal successfully is having strong beginning. Too often business proposals start off with a thud instead of a splash. What’s truly important at the start of your business proposal is not trying to get across all your company information and history. This can even backfire by turning them off, so avoiding this mistake is crucial. It’s best is to have already communicated most of this information through the first meeting like mentioned above, or through other literature/conversations you’ve shared with the client prior to delivering the proposal.

So instead of starting off by talking about you, start by diving into a discussion of them. Hook them right away by talking about something they actually care about – which is their business, not yours. This shows your focus is on them, not you.

How do you do this? A great trick is to use an engaging line, a hook – something that instantly grabs their attention and keeps them reading to the end. The goal is to, as quickly as possible, get them deeply interested in what you have to say so they read through the full proposal. A great way to do this is to ask a question about their business or industry that you know they can’t readily answer and would be interested to learn. Curiosity alone will motivate them to keep reading if you use a technique like this. The best questions are specific ones that arise from your research into their customers and competition.

Gold KeyNever Look Like You Are Selling

The third key on how to write a business proposal successfully is to avoid the hard sell. Many businesses make too hard of a sales-pitch in their business proposal. This causes a number of problems:

  • It’s off-putting. People simply don’t like to feel pressured when deciding to spend money. This is an old sales technique, and modern consumers are just too savvy for this approach.
  • It feels insincere. When you focus on traditional sales pitches instead of focusing on fixing your customer’s problems, you come off as not truly caring about them and only caring about getting paid. Instead, talk about their needs, about helping them making money.
  • It produces the wrong result. The goal here is to lead your potential customer down a carefully cultivated path that ends up with an enthusiastic “Yes!” to your request for their business. You want them to get their own accord so that they feel like they are making the decision that is right for their business as the result of their careful evaluation of your offer – not because they are being pressured by a sales person. Why? Because even if you do manage to hard pressure a client into making a sale, this is no way to build the loyalty and trust you need to build success long term. So even when hard-sale business proposals work, they usually fail.

It’s absolutely key to remain personable and friendly throughout the process while at the same time focusing on discussing your customer’s unique needs and how your option is the best solution for those needs. You want to approach and treat them with respect, just the same way you want to be approached and treated with respect when someone is selling you something.

Gold Key Include Testimonials & Qualifications to Show Why YOUR Solution Is Best for Them

The fourth key on how to write a business proposal successfully is to make sure you show clearly why YOU are the best business or contractor for the job. There are two tasks a successful business proposal must perform:

  1. Presenting an accurate assessment of the customer’s needs and
  2. Convincing them that you are the right business or contractor to take care of those needs.

We’ve talked about how your proposal needs to mainly focus on the potential customer, but it can’t ignore your business completely. It must also spend a little time clearly demonstrating why your business deserves the contract.

There are two quick ways to do this without having to try to trump up your business:

  1. List any special qualifications, awards, or certifications you have.
  2. Include testimonials from past customers about the work you do and have completed and the advantages of using your services.

By letting your customers and awards speak for you; you don’t have to come off as bragging, over-exaggerating, and hard selling. Instead you come off as a confident high-performing professional with a good reputation.

These two things are a great start; however, if you really want to stand out, there is a third thing you may need to discuss in the proposal, communication. One mistake businesses make too often is simply falling off on communication once they’ve been awarded a bid. How would this make you feel? Chances are, your potential customer has been through something like this and has felt that way before. How much time does it take to include a very brief paragraph in your proposal to demonstrate upfront how important communication after the sale is to your team and guarantee them something better?

See the difference this can make? Taking a moment to point out a service issue that is common to contractors and then reassuring clients you deliver a better experience in that area is a quick way to stand out to any potential client whoever’s been let down by a previous worker or contractor before. This is a great technique to turn a potential negative into a huge positive.

Gold KeyPresent Pricing in a Way That Is Easy to Understand Quickly

The fifth key on how to how to write a business proposal successfully is a clear and easy-to-understand pricing structure. A common error many business proposals have is the inclusion of over complicated or hard-to-interpret pricing structures. Simply put, you want your pricing structure to be as clear as possible. You want them to understood it at a glance. Don’t fall into the trap of adding all kinds of pricing options hoping for an up sell. What this ultimately does is hurt the proposal in two ways:

  1. It makes the proposal longer for no good reason:  This is information that doesn’t speak directly to the customer’s specific needs, so adding it doesn’t make the proposal any more helpful or easy to get through. Instead of confusing them by diluting the force of your proposal, make the pricing information they are concerned with uncluttered and abundantly clear.
  2. It creates unnecessary opportunities to potentially upset your customer:  The more pricing options and details you add to a proposal, the greater the chance a price that the customer doesn’t like is included. Why upset them with pricing information that isn’t even applicable to what they want?

The key here is don’t confuse clients or turn them off with hard-to-follow or overly long pricing structures. Make it clear and easy to comprehend while leaving them as little to complain about as possible. What do you do about all those pricing options you’ve left out? A far better option is to put a simple pricing structure they can understand at a glance and follow that up with a brief note stating that any services not covered in this proposal may be subject to further fees.

Gold KeyNever Start From Scratch, Use a Template

The sixth key on how to write a business proposal successfully is to always use a template, which is perhaps the biggest key of all. Starting from scratch on a business proposal not only takes far longer than using and customizing a template, but you lose out on all the benefits the principals behind the template’s organization add’s to your proposal. With a strong business proposal template, you’re not taking stabs in the dark, but putting together a document you know is built for success from the ground up. So not only is this a quicker and simpler way to build a proposal, but a smarter one as well.

Don’t fall into the trap. however, of failing to customize and polish your proposal simply because you used a template. The truth is, you must fully customize any template in order to make it as effective as possible. Never assume when you add your information to your chosen template that it will appear as it should be or will be worded correctly. Instead, always go over every line of your template-produced business proposal. Make absolutely sure it is as well-worded, personable, and focused on winning this particular client over as possible.

So always start with a strong proposal template, then add into it the information about your services and pricing as well as the information you learned from researching your potential client and their business, and finally, polish every last line to ensure it’s perfect.

Before Submitting Your Business Proposal Letter

Once you’ve got your proposal template and entered all the information into it, you’ll want to make sure it is 100% ready to be delivered to the potential customer. Below are helpful tips on how to make sure the business proposal is ready for delivery.

  • Customize Your Proposal Again: Yes, this was just on the last list, but even after you’ve customized it the first time, go back and look it over again later when you have fresh eyes. After that initial round of polishing, let it sit half a day or longer and then come back and look at it again. You’ll see things you didn’t notice before because you were too close to it. This time, specifically look at each section and ask if it’s presented in the best way possible, in the way that will be easiest for the specific customer you are preparing it for to understand. It’s very likely that no part of the template should be left the way you found it and when you give it a second go, you may find something you missed the first time.
  • Make Sure You Come Across as Personable: Once it’s customized, read through it to ensure you are as friendly, low-pressure, and personable as possible. You want to establish a relationship here where they trust you and enjoy doing business with you. If you come across as stiff, awkward, short, or even rude – there is no chance this proposal is going to be as effective as it would be if it was warm and inviting. So look at your language and how you present ideas and adjust to a warmer, friendlier or less sales-driven tone where needed.
  • Read it From Your Customer’s Perspective: Once you’ve made it personable, read over it a third time. This time, put yourself in your customer’s position and be as critical as you possibly can. Are you really offering them value? Is that value clear? Are you just wasting their time? Do they care about what you’re talking about? How do you come off? Is it clear how your solution really impacts their bottom line and ability to outperform their competition? If anything in the proposal at all doesn’t seem like an exciting win for your customer – revise it until it does.
  • Have a Trusted Business Associate or Your Business Attorney Read it Over: The bigger the sale, project, or client, the more important your business proposal becomes. Don’t hesitate to have a trusted business associate or even your business attorney read over the proposal to give you feedback. The bottom line is that it’s always best to find out issues, problems, or other pieces of valuable information about your proposal from someone other than the client you intend to present it to. Keep in mind that there are likely parts of this proposal you want to keep confidential, so don’t just share it with anyone.

To Sum It All Up…

As you can see, a business proposal letter is a highly evolved and valuable business marketing tool to help your business win clients and build profits – but only if it’s put together and presented as it should be. Your business proposal letter must be unique, focused on your customer’s biggest needs, personable, concise, and easy to understand.

This need for a high-quality, tailored business proposal means you absolutely need to find the right template. That’s why we have a free business proposal template section.

Access Business Proposal Template Section

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