A business proposal refers to a written offer that is presented by the seller to a prospective buyer. Business proposals are the foremost step in the complicated sales process, that is, wherever a buyer considers price as the main factor in a purchase.
A proposal helps in putting the buyer’s requirements in a context that favors the products and services of the seller, and also aware the buyer about the capabilities of the seller in satisfying their needs. This can help both the buyers and sellers to define the working and what they can expect from each other.
A proposal can be solicited or unsolicited. A buyer may simply demand a proposal on a project in the course of sales. The proposal helps in providing the basic information related to products quantity, a deadline for delivery, how the product and services will suit the buyer and so on.
There are three different types of business proposals and they are mentioned below :
Formally solicited proposals are written in response to published requirements, that is contained in a Request For Proposal (RFR), Request For Quotation (RFQ), Invitation For Bid (IFB), or a Request For Information (RFI).
The terms mentioned above are described below :
1.1 Request For Proposal (RFP)
RFPs gives the detailed specifications about what the customer wants to purchase and at times also includes directions for the preparation of the proposal. It also contains the evaluation criteria that the customer will use to evaluate the offers.
Customers issue RFPs when their needs cannot be fulfilled with generally available products or services.
RFIs are issued to look out the vendors who are interested in providing products and services to fulfill the requirements of the customer. Based on the response received to RFI, details RFP is issued to the sellers who the organization thinks can provide with the required services. , when are in response to RFPs, can be of less than 10 pages or can go up to 1000’s of pages.
1.2 Request For Quotation (RFQ)
When the price is not the issue and customers want to buy a large number of products or services the RFQ is issued such as when delivering or availability or service are into considerations. RFQs can be detailed, which results in lengthy proposals that are written to RFQs. But they are mostly shorter than an RFP proposal. RFQs primarily consists of cost data, with the brief narratives that address customer issues like controlling the quality.
1.3 Invitation For Bid (IFB)
IFBs are generally issued by customers when they are buying some kind of service such as construction. The requirements are provided in detail, but the foremost consideration is the price. For instance, the architectural blueprint is provided by the customer so that contractors can bid on it. The proposals can be lengthy and the major part of the proposal is covered by cost estimating data and detailed information about the schedules.
1.4 Request For Information (RFI)
At times before issuing the RFP, RFQ or IFB, the customer issue a Request For Information. The main purpose of IFB is to get market intelligence regarding the products, services, and vendors that are available.
It is used as the basis and helps to shape final RFPs, RFQs, and IFBs. The vendors can take care by responding to these requests, in the hope to shape the solicitation towards their products and services.
Informal Solicited Proposals are basically the outcome of a conversation held between a seller and a potential buyer. The customer may be keen enough in a product or service that he/ she may ask for a proposal. In this, the customers generally do not ask for competing proposals from various other vendors. This kind of proposal is also known as a sole-source proposal. No formal requirements are needed to respond. But the good quality products and services are chosen.
The unsolicited proposals are basically the marketing brochures. The proposal is always generic, and there is no direct connection between the customer needs or any specific requirements. Sellers use these proposals to introduce a product or service to a potential buyer. They are generally used as “leave behinds” at the end of an initial meeting with customers or “give away” at some trade shows or various other public meetings. They are not designed for the purpose to close the sale, it is presented only to introduce the possibility of a sale.
Sales and marketing team face a great challenge in managing the business proposals. Various established management methods are not appropriate to deal with the broader issues linked with the production and delivery of the proposals. In such cases, the organization mainly relies on outsourcing. The organization identifies a proposal manager to support their proposal development needs.
Proposal management is a collaborative process. Many roles are to be occupied for creating a good business proposal. There are many responsibilities that are needed to be taken care of. It mainly consists of the following roles and responsibilities :
Creator- He/ she is responsible for creating and editing the content.
Editor- He/she is responsible for curating the content message and the delivery style, including localization and translation.
Publisher- He/ she is responsible for releasing the content for use.
Administrator- He/ she is responsible for managing the permissions granted for the documents and files, usually done by providing access rights to different groups, individuals or roles.
Consumer or Viewer- The person who reads or takes in the content that is published or shared.
Progressively, the word proposal management is used to suggest that the engagement with the process of the proposal is crucial to not just the sales team, but it also affects the working in marketing, sales and legal. There is an upcoming trend of using proposal management software. It helps the user in creating the proposals quickly and easily, collaboration with the team members, tracking and analyzing customer engagement.
By developing a proposal checklist, the proposals can be written successfully and effectively. Necessary standardized information from the sales proposals should be inculcated in the proposal to make a good proposal using relevant information. This helps the proposal writer to build up the basis on which the proposal is laid and to search for other information that is needed in the proposal. For instance, basic information such as company name, mission statement, history, etc. should remain the same for most of the proposals. The information about the company should not be altered. Customization is required in the area where information about price, product, and services are mentioned, as they need to be customized for specific customers that are being targeted. Sometimes the process can be complex and tedious, but if steps are taken accurately then it is not a difficult task. Other than solicited and unsolicited proposals, there are others that exist which includes internal proposals and sole-source contracts.
Internal proposals are the proposals that are presented to the organization’s superiors that hold the position of top management and whose views are of considerable value. These sort of proposals can be written by an individual or a group or department or division of the organization. For instance, when the product manager initiates a proposal to robotize the production process, giving in the positive aspects of taking such a decision. This helps in easy and better communication, knowing that the decision made by the clients will be fast. Some benefits from this may include competition from various companies and loss of management champions.
This type of proposal is established when a private firm, government agency or association work out to supply a service or product to another single company. It happens only when the company has excellent credibility and a good track record of achievements. The basic format for this proposal includes information about a certain product, with the price and delivery details like deadline and schedule. Some importance of this proposal includes not having resources to get the contract and the company or buyer knows the time when the work will be done.
On the basis of research, the proposals are made, making it crucial for the researcher of the proposal to have information about their client. The researcher must have information about the background of the idea that is to be presented in the proposal. It shows that he/ she is well prepared to deal with and solve the problem or a situation that the client suffers from.
The research of the company, firm, etc. is done beforehand, this helps in preparation of a well-built proposal and the reader of the proposal will have a good idea of the outcome that is concluded from the research that has been conducted.
A basic format for the proposals has the title page, abstract, scholarly statements of the problems and the method that can be used to solve it, biographical information and the budget.
It is important that the title page is curt and definite, as it may seem small but it is crucial. Using keywords for the purpose of indexing is a good idea until it is written in a relevant pattern, that is clear and understandable.
This part of the proposal states the situation, method, scope, goal and the outcome that is expected. It generally consists of around 200 words. The summary of an abstract should be short and lean. Only if the abstract is good the managers will look into the proposal. There should be some meaning that can be derived from the abstract.
It is crucial to highlight the main idea that is presented in the proposal. The idea presented should be clear and should be unique so that it can help to capture the attention of the reader. After that, the idea should be explained and what is it’s purpose should be described.
The proposal writer mentions the grant and the money that is going to be paid by it. The pay scale must be compatible with that of the company. The company may have to take up the duties of the researchers as the researchers' salary is that of a single person salary in the company. The estimated cost of disposable materials, supplies, materials, etc. are included in the proposal by the writer. There is other information that needs to be included such as publication, travel, and direct costs.
This part of the proposal proves that the one writing and submitting the proposal is capable to perform the job effectively and efficiently, having full knowledge in this respect. Whoever is involved in the making of the proposal are mentioned and also their achievements are also mentioned. Persuasion is the key element used in proposals to make the audience buy the idea. For instance, writing a proposal to try and persuade the sponsors to pitch in a project. Another can be using a proposal to persuade a buyer is when the company writing the proposal demands for a grant. The categories that involve in the grants are health care, social service, religion, economic development, education, etc. When components such as sponsor value, applicant credibility, proposal logic, etc. are included then only persuasion can work. If the project idea is related to the sponsor values or has a problem of interest only then it can make the proposal persuasive.
Sponsors or grant makers mainly focuses on any specific dilemma, injustices or inequities. The main aim is to fill up the space between the groups of “what is” and “what ought to be”. for instance, an organization trying to prevent child abuse calls the Child Abuse Prevention Foundation. Their activities may include working for the betterment of the situation such as giving support to families and children and teaching about the types of abuse and how to fight against it. In addition to this, the foundation helps in providing best practices and evaluation techniques and provides professional assistance for the same.
The job of an applicant is to authorize the credibility of the organization, individual and the project. When a firm is proposing an idea that is to be presented by the project director, it is crucial for them to have credibility.
Being able to persuade is one of the main features of success. An organization will always try to persuade its target to choose it over other firms, showing them how different and unique it is. For instance, a company may boast about its goodwill and work experience to grab the opportunity and persuade the target buyer.
This fundamentally deals with the making of proposal elements that shows an identified gap, improved situation, and benefits as an outcome to the intended people. The presented objectives when completed successfully with great results and benefits may help in persuasion. The elements should show a relationship between the values of the sponsor and the project that is being proposed. An exact description of the issue or need that is required along with the organizational purpose, funds, and way to complete the objectives. It also has the deadline and also a summarization of the intended target.
Sponsors would generally provide money for both logical and psychological reasons. Proposal psychologies tap the emotional needs of the sponsor. There are few things that can be found in a successful proposal such as passion, ownership, trust, energy, commitment, etc. Grants are used by sponsors as an investment. Sponsors must feel that the seller is really trying to help him with his problem and issues. For as long the proposal expresses interest and concern for the idea and values of the sponsor, there is a good chance of being successful in turning the proposal into products and services.
The business proposal has various advantages as well. Some are mentioned below :
The key players in the business generally create business proposals. A small firm may have a single proposal whereas a large firm may have various proposals. The proposals may be written by different individuals or departments to get a collection of new ideas and perspectives. The proposals are written to present foreword an idea or approach to a project that may not have been designed by the company executive.
A budget can be created by outlining the entire project or idea. This can help the executive to see how much cost will be incurred to plan, create, develop and execute the idea planned. For instance, if a company wants to make new products by using new products, the proposal should outline some important and basic information such as, how much money will be required, how much cost will be incurred to develop the product and how the product will be sold so that the production cost can be covered and profits can be gained. The frame of the overall budget should be there so that there may not be any negative impacts of the new plans on the working of the organization or so that the loss can be recovered.
A large overview can be obtained by creating a business proposal. It is of great significance. For instance, the product that is to be developed and the completion of the product can be done, then the problem arises of marketing that is not mentioned in the proposal. So it may help in finding the area of the problem so that the managers can fix it on time. Any section that is not completed in the proposal can be highlighted and needs attention so that the proposal can be completed on time.
The writer of the proposal after completing it tries to point out how an organization will be benefited and how it can help in the growth of the organization on the acceptance of the proposal. Even if the calculations made and the projections done are just based on the predictions that are achieved by the calculation of the sales price, production cost, product in trend, etc. The calculation is based on realistic past results and experiences.
Proposal not only helps in capturing the target audience or buyer, but it is also relevant within an organization to perform tasks formally and with perfection. It is also a great tool to use in a large organization as there is complex working and the work may get tangled. So, it is better to have a proposal for every new idea, so that it can be well communicated with the top level management of the organization. Providing a foolproof idea and hence, saving the resources as well as the time of the organization. Therefore, a business proposal is a significant and crucial tool that needs to be incorporated by every organization.
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