Proposal (business)
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A business proposal is an offering from a seller to a prospective buyer.[citation needed] Proposals can range in size from a one page letter, or price list, to several hundred pages of detailed specifications. 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, buyer and seller.
In complex sales situations, the process of selling can take several weeks, or even months, to complete. In some cases, offer and counter offers will go back and forth. The proposal provides a formal way for both sides to communicate in writing during these negotiations. Prospective buyers sometimes issue a Request for Proposals (RFP), or an Invitation for Bids (IFB), or Request for Quotation to guide the sellers and provide specific information about what products or services they want. These specifications become the customer's requirements, and meeting requirements is a major objective in writing a successful proposal.
A properly accomplished proposal will put the buyer's requirements into a context that favors the sellers products and services, educating the prospective client about the full nature of his or her needs and the capabilities of the seller in satisfying those needs. Often, a prospective client may be aware of only a portion of their needs, or they may be unaware of what the market has to offer to meet their needs. Sometimes there are long discussions between buyers & service providers before finalizing the requirements & solutions. Good references also plays an important role before finalizing the proposal. A successful proposal is one that results in a sale, where both parties get what they want. This is called a win-win situation.
[edit] Basic components of the business proposal
- An orientation to the seller's capabilities or products
- A discussion of key issues
- A description of the seller's offering and related benefits
- The cost of the offering
- A schedule for delivery of the products or services
- Testimonies from owners of products
Of course when responding to an RFP or IFB, the format of the proposal is determined mainly by the buyer, and the seller must respond in kind. Because the proposal becomes part of a contract between the buyer and seller, it must be also considered a legal document and may contain elements of their legal agreement, such as penalties for non-delivery or tardiness.
[edit] References
- Association of Proposal Management Professionals
- 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.
