A business plan and a proposal are two distinct papers that serve two distinct objectives. A business plan is a document that explains how a company plans to achieve its aims and goals, whereas a business proposal is a sales document used by a company to solicit a contract from a client.
Business Proposal vs. Business Plan
The content, aims, writing style, and format of a business plan and a business proposal are all distinct. The most significant distinction between the two is that a business plan is a document that gives facts, but a business proposal is a request for a deal and a price quotation.
A Business Plan
It is a document that describes a company’s objectives. A business plan can be thought of as the documentation of a company’s overarching vision. Business plans are, by definition, tactical. It’s the equivalent of expressing where and when you want to start when you want to get to the next point of view, and how you want to get there. A business plan contains descriptions of how the company will operate, financial goals in detail, potential business rivalry, marketing strategy, executive profile, and other aspects that will affect the company’s anticipated growth.
A business plan is highly helpful at getting the attention of possible investors in a firm (especially a startup that has yet to establish itself in its field). A business plan can also help experts like attorneys, accountants, and future workers understand what a company needs. A business plan clearly defines the scope of the company and, as a result, clears your mind as a business owner.
Since it is the blueprint of the company’s vision, the business plan should be made honestly. It shows whether the company’s business objectives are practically achievable. According to experts, creating an efficient business strategy takes about six weeks of rigorous study and foundation. To put it another way, you can’t usually write a successful business plan in one day, present it to potential investors the next day, and expect to get the outcomes you want.
A Business Proposal
A business proposal is sent straight from an established company to a potential client. It’s an attempt to sell a client service or product provided by a business entity rather than the firm itself. A business proposal isn’t the same as an estimate. Though the business proposal will include pricing and other data, an estimate is far more informal and simply a way to skim over the expenditures. It does not give the full picture.
Essentially, business proposals depict a certain concept, such as a new, profitable venture. The purpose of the proposal is to persuade investors to fund the proposed company venture. For example, a well-known restaurant company might want to expand into a neighboring state. To secure the financial assistance of its target investors, such an eatery would have to write a business proposal.
Though the business proposal (like a business plan) provides an overview of what the company does, its primary goal is to provide information about the suggested business idea, including responses to any concerns that potential investors may have.
A Business Plan Components
A business plan consists of three parts: a description of the business model, sales strategies, and financial targets. However, it contains the following parts of information in more detail:
- A summary
- Product and service descriptions
- An examination of the industry (analysis of possible business rivalry)
- Operating plan for marketing strategy
- Internal analysis of leadership structure
- A plan that has been built out
- Management is introduced
- Monetary objectives (deliberations on monetary concerns, and how to address them and achieve expected results)
A Business Proposal Components
When responding to a request for proposal (RFP), a solicited business proposal should be given in the format desired by the client in their RFP. An unsolicited business proposal may or may not follow the same format. Its goal is to come up with and develop a company concept. As a result, it’s suggested that you adopt the same format or another well-known format in your field of interest.
An unsolicited business proposal gives a company the freedom to choose the structure that best suits its needs. Regardless of the format adopted, the proposal is expected to fulfill industry standards. It should, for example, highlight important areas of interest, be extensively researched, provide a value proposition, and include a call to action.