Proposal (business)

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A business proposal is an offering from a seller to a prospective buyer. ^[1] Proposals can range in size from a one page letter, or price list, to several hundred pages of detailed specifications written by a technical writer. In the business sales process, the written proposal is the vehicle that carries the terms of an agreement between buyer and seller, and forms the basis for a subsequent business contract. When a proposed offer is accepted by the buyer, it creates a legally binding document for both parties.

In complex sales, the process of selling can take several weeks, or even months, to complete. Sometimes there are long discussions between buyers & service providers before finalizing the specifications. In some cases, offer and counter offers will go back and forth. Prospective buyers sometimes issue a Request for Proposals (RFP), Request for Information (RFI), Request for Quotation (RFQ) or an Invitation for Bids (IFB). These requests guide the sellers and provide specifications about the buyer's needs. Meeting the specified requirements is a major objective in writing a successful proposal.

The Project Mandate is a general outline of a proposal. It includes or points to the projects's business case, or Charter, the High and Low Level Requirements, Risks, Costs, Benefits and any other documentation. It can be customized to a large or small scale, in order to define the scope of the project. The objective should be to outline the project thoroughly enough so that a "Go/No Go" decision can be made.

A proposal puts the buyer's requirements in a context that favors the sellers products and services, and educates the buyer about the capabilities of the seller in satisfying their needs. A successful proposal results in a sale, where both parties get what they want. This is called a win-win situation.

Basic components of the business proposal

1. A description of the seller's capabilities or products
2. A discussion of key issues
3. A description of the buyer's specifications and how they will be met
4. The cost of the offering
5. A schedule for delivery of the products or services
6. Proof of prior experience i.e. Testimonials from previous customers, Project descriptions of previous projects

The format of the proposal is dictated by the buyer's request document. In most cases, the proposal becomes part of a contract between the buyer and seller. As such, elements contained in the proposal become binding, such as commitments for schedule of quality.

References

1. ^ Ricci, Laura. "The Magic of Winning Proposals". Retrieved on 2008-07-25.

• Association of Proposal Management Professionals
• Shipley Associates Proposal Guide for Technical Professionals, Proposal Guide
• Baugh, L. Sue; Hamper, Robert J.; (1995). Handbook For Writing Proposals. McGraw-Hill. ISBN 0-8442-3274-2. 
• Holtz, Herman; (1998). Proven Proposal Strategies To Win More Business. Dearborn Trade, a Kaplan Professional Company. ISBN 1-57410-088-2. 
• Reeds, Kitta; (2002). The Zen of Proposal Writing: An Expert's Stress-Free Path to Winning Proposals. Three Rivers Press. ISBN 0-609-80649-1. 
• Ricci, Laura; (1996-2007), The Magic of Winning Proposals (publisher R³) ISBN 0-9657399-1-0.
• Riley, Patrick G.; (2002), The One Page Proposal: How to Get Your Business Pitch onto One Persuasive Page (New York: HarperCollins) ISBN 978-0060988609.
• "Capture. Deliver. Excel. - Applying the Principles of Business Writing". Ilja van Roon. Retrieved on May 7, 2006.

See also

• Bidding
• Call for bids
• Construction bidding
• E-procurement
• Procurement

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