A business proposal is a written offer from a seller to a prospective sponsor.

Business proposals are often a key step in a complex sales process, where a buyer considers more than price in a purchase.

A proposal puts the buyer's requirements in a context that favors the seller's products and services, and educates the buyer about the seller's capability to satisfy their needs.

There are three distinct categories of business proposals: formally solicited, informally solicited, unsolicited.

Solicited proposals

Solicited proposals are written in response to published requirements, contained in a request for proposal (RFP), request for quotation (RFQ), invitation for bid (IFB), or a request for information (RFI).

Request for proposal (RFP)

RFPs provide detailed specifications of what the customer wants to buy and sometimes include directions for preparing the proposal, as well as evaluation criteria the customer will use to evaluate offers. Customers issue RFPs when their needs cannot be met with generally available products or services. RFIs are issued to qualify the vendors who are interested in providing service/products for specific requirements. Based on the response to RFI, detailed RFP is issued to qualified vendors who the organization believes can provide desired services. Proposals in response to RFPs are seldom less than 10 pages and sometimes reach thousands of pages, without cost data.

Unsolicited proposal

Unsolicited proposals are generic marketing brochures used to introduce a product or service to a prospective customer. They are often used as "leave-behinds" at the end of initial meetings with or customers or "give-aways" at trade shows or other public meetings. They are not designed to close a sale, just introduce the possibility of a sale.

Components

Formally solicited proposals

  1. Requirements Matrix, which matches customer requirements with the paragraph and page numbers of where those requirements are addressed in the proposal
  2. Executive Summary, which outlines the primary benefits of the vendor's solutions to the customer's requirements
  3. Technical Volume, which demonstrates how each requirement will be met
  4. Management Volume, which describes how the program will be managed
  5. Cost Volume, which provides all costing data, as well as implementation plans and schedules The Association of Proposal Management Professionals (APMP) refers to a black hat review as an independent review of the strategies and proposals likely to be put forward by competitors. Other colours are used in relation to teams: a pre-writing strategy review is sometimes called a "Pink Team", a formal draft review may be called a "Red Team", and the term "Gold Team" indicates a final pre-submission review.

Inherent to the process of managing proposal is the decision of whether to submit a bid, which is underpinned by the capture plan.

See also

  • Bidding
  • Call for bids
  • Construction bidding
  • E-procurement
  • Procurement
  • Proposal theme statement
  • Presales
  • Offer and acceptance

References

Cited references

General references

  • Binda Zane, Edoardo; (2016), Writing Proposals: A Handbook Of What Makes Your Project Right For Funding
  • Ricci, Laura; (2014), The Magic of Winning Proposals (publisher Help Everybody Everyday) .
  • Riley, Patrick G.; (2002), The One Page Proposal: How to Get Your Business Pitch onto One Persuasive Page (New York: HarperCollins) .