What Is a Business Proposal?

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  • Written By: Karyn Maier
  • Edited By: Bronwyn Harris
  • Last Modified Date: 11 October 2019
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A business proposal is a written proposal presented from a vendor that is intended to elicit business from a prospective buyer. It differs from a business plan, which is primarily constructed to obtain start-up capital by detailing the organization and operational aspects of the business to demonstrate its profit potential. A business proposal is also unique because it contains much more than figures and statistics represented by pie charts and graphs. In fact, the former involves proposal writing, which is designed to identify and target a specific market and solidly demonstrate how the bidder can deliver custom solutions to the needs of buyers within that market.

Business proposals vary in scale and intended audience. For instance, a small business may direct a limited number of proposals in batch to larger companies in the hope of establishing new lines of business. On the other hand, a company may draft a proposal in response to an invitation to bid on a specific project made public by a private company or government agency. These two scenarios represent the two basic kinds of proposals, which are solicited and unsolicited.


An unsolicited business proposal can be thought of as collateral marketing material, such as a brochure. They are largely broad spectrum in that they don’t address a particular company by name or attempt to close a sale. Instead, this kind of informal proposal is created to introduce a product or service to potential customers through direct mail distribution, by leaving the material behind after a “cold” sale call, or making printed information available at trade shows.

A solicited business proposal is quite different and much more detailed. As previously mentioned, a company or government agency may publish a request for bid proposals on a certain project, also known as a Request for Proposal (RFP) or an Invitation for Bid (IFB). Since the project is usually offered to multiple candidates simultaneously, the proposal submitted by the winning bidder will generally meet the specific requirements of the project but at the lowest price.

There is yet a third kind of business proposal, however, and that is an informal solicited proposal. While this is similar to a solicited proposal in terms of being an invitation to bid, it is generally extended to only one vendor at a time. In fact, this opportunity most often stems from a vendor and potential customer having crossed paths at a convention or trade show. Another key difference between an informally solicited proposal and a solicited proposal is there are no specific requirements for the vendor to satisfy in the written proposal. It is merely solicited by an expressed interest in the product or service that the vendor has to offer and an informal request for more information.


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