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How to Write Winning Business Proposals: Examples & Free Templates (2023)
By Aditya Sheth , May 25, 2023
The great Mark Cuban once said, “Sales cure all.” If a business doesn’t sell, it doesn’t make money and by extension the business fails. That’s why you need to write business proposals .
A well-written business proposal can often mean the difference between winning or losing a prospective client.
In this in-depth guide to creating business proposals, we show you how to close more deals, make more sales and crush your business goals — all by using easy-to-edit professional business proposal templates .
Here’s what this guide will cover (click to jump ahead):
What is a business proposal.
- How to write a business proposal step by step
What should you include in a business proposal?
Business proposal format, what are the types of business proposals, more business proposal examples + writing and design tips.
- FAQs about business proposals
Looking for a shortcut? Watch this quick video for an overview of everything to include in your business proposal:
An effective business proposal is a document used by a B2B or business-facing company (this may not always be the case) where a seller aims to persuade a prospective buyer into buying their goods or services.
A business proposal outlines what your business does and what you can do for your client . It can be general like this business proposal example:
Or it can be more specific, like this business proposal template which focuses on proposing a project for the Newton Center Rail:
Or this business proposal sample, which presents a plan for a social media strategy and campaign:
To design a business proposal that holds the client’s attention, identify their pain points . Then provide your buyer with the right solution to alleviate those frustrations.
Return to Table of Contents
How to write a business proposal step by step
Before you start creating your business proposal template, you need to know what it comprises. At a high level, your effective business proposal should include the following:
- Table of contents
- Executive summary
- The problem statement
- The proposed solution
- The timeline
Pricing, billing, and legal
- Terms and conditions
- The acceptance
Below, you can see business proposal examples that demonstrate how to include these 10 sections.
Business proposal title
A compelling title could mean the difference between someone reading your proposal or ignoring it in favor of a competitor’s.
What makes a good title page? Here are the essential elements to include:
- Your name along with your company’s name
- The name of the prospect (or their business)
- The date you’re submitting the proposal
The gray business consulting proposal template above contains all the details a prospect would want to know. The title also offers a strong tangible benefit to the prospective buyer. Honestly, “Who doesn’t want to grow their business?”
Return to business proposal content sections
The table of contents is a fundamental part of every winning business proposal template. It makes your proposal scannable and easy to read.
The people you will be pitching to are usually C-level executives. These are busy people who don’t have time to read your entire proposal in one go.
That’s why most of the business proposal examples in this list include a table of contents.
Adding a table of contents to your document makes it easy for them to go through it at their own pace. They can also skim through parts of the proposal that they deem more important. You can see how this abstract business proposal template uses the table of contents:
You can also make your business proposal template easier to navigate by adding hyperlinks to the document, particularly in the table of contents. This way your clients can jump to specific sections without having to scroll through the entire document.
It’s easy to add hyperlinks in the Venngage editor. Select the text you’d like to turn into a link, then click the link icon in the top bar. From there, select the page you want to link to! Then download your completed design as an Interactive PDF .
The executive summary is a staple in all kinds of annual reports , leadership development plan , project plans and even marketing plans . It is a concise summary of the entire contents of your document. In other words, write a business proposal outline that is easy to glance over and that highlights your value proposition.
The goals of your executive summary are:
- Introduce your company to your buyer
- Provide an overview of your company goals
- Showcase your company’s milestones, overall vision and future plans
- Include any other relevant details
This gray business proposal example has a detailed yet short executive summary including some social proof in the form of clients they’ve worked with:
Take note of how precise this business proposal example is. You want to keep your executive summary concise and clear from the get-go. This sets the right tone for the rest of your proposal. It also gives your buyer a reason to continue reading your proposal.
Pro Tip: Try to write an executive summary such that, even if your prospective client doesn’t read the entire proposal (with a good executive summary, they most likely will), they should have a clear idea about what your company does and how you can help them.
The point of writing a business proposal is to solve a buyer’s problem. Your goal is to outline the problem statement as clearly as possible. This develops a sense of urgency in your prospect. They will want to find a solution to the problem. And you have that solution.
A well-defined problem statement does two things:
- It shows the prospect you have done your homework instead of sending a generic pitch
- It creates an opportunity for you to point out a problem your prospect might not be aware they had in the first place.
This bold business proposal template above clearly outlines the problem at hand and also offers a ray of hope i.e. how you can solve your prospect’s problem. This brings me to…
The good stuff. In the proposed solution section, you show how you can alleviate your prospective buyer’s pain points. This can fit onto the problem statement section but if you have a comprehensive solution or prefer to elaborate on the details, a separate section is a good idea.
Spare no details regarding the solution you will provide. When you write a business proposal, explain how you plan to deliver the solution. Include an estimated timeline of when they can expect your solution and other relevant details.
For inspiration, look at how this business proposal template quickly and succinctly outlines the project plan, deliverables and metrics :
At this point, the prospect you’re pitching your solution to likes what they’re reading. But they may not trust you to deliver on your promises. Why is this?
It’s because they don’t know you. Your job is to convince them that you can fix their problem. This section is important because it acts as social proof. You can highlight what your company does best and how qualified your team is when you write a business proposal for a potential client.
This free business proposal template showcases the company’s accolades, client testimonials, relevant case studies, and industry awards. You can also include other forms of social proof to establish yourself as a credible business. This makes it that much more likely that they will say yes!
Pro Tip: Attaching in-depth case studies of your work is a great way to build trust with a potential client by showcasing how you’ve solved similar problems for other clients in the past. Our case study examples post can show you how to do just that.
To further demonstrate just how prepared you are, it’s important to outline the next steps you will take should your buyer decide to work with you.
Provide a timeline of how and when you will complete all your deliverables. You can do this by designing a flow chart . Or add a roadmap with deadlines. Pitching a long-term project? A timeline infographic would be a better fit.
If you look at this abstract business proposal template below, even something as simple as a table can do the trick.
The timeline is not always set in stone, rather it’s an estimation. The goal is to clarify any questions your potential client might have about how you will deliver for the underlying B2B sales process.
On this page, you can outline your fees, payment schedule, invoice payment terms , as well as legal aspects involved in this deal.
The key to good pricing is to provide your buyer with options. A pricing comparison table can help with this. You want to give your client some room to work with. Make sure you’re not scaring off your client with a high price, nor undervaluing yourself.
Breaking up your pricing in stages is another great way to make sure your potential client knows what he’s paying for. Look at how this simple business proposal template does this:
The legal aspects can slot right into the terms and conditions section. Alternatively, you can add them to the signature section of the proposal to keep things simple.
Summarize everything you have promised to deliver so far. Include what you expect from your prospective buyer in return. Add the overall project timeline from start to end, as well as payment methods and payment schedule. This way, both of you will be clear on what is being agreed on.
This step is very important as it outlines all the legal aspects of the deal. That is why the terms and conditions section of your proposal needs to be as clear as possible.
I recommend consulting a lawyer or your legal team when working on this section of the business proposal. If you’re a business veteran and understand the legalities of your business, you can use the same terms and conditions across all your proposals.
The final step of this whole process. Your client has read your business proposal and they want to buy what you have to offer.
Add a small section at the end of your proposal to get the necessary signatures. This way, you and your client can sign the proposal and the partnership becomes official.
Be sure to also include your contact information in your business proposal template. It acts as a gentle prompt to your client to contact you in case they have any questions.
A business proposal usually aims to answer the following questions:
- Who you are and what your company does
- The problem your buyer is facing
- The solution your company offers to alleviate the problem
- How your company will implement this solution effectively
- An estimate of resources (time, money, etc) required to implement the solution
You can see how this sample business proposal template covers the above points.
Notice how this proposal template addresses the same project like in one of the previous templates, but uses a completely different design style (more retro, while the previous business proposal template is more modern and minimalistic).
You can remove or add more sections depending on the goal of your business proposal. Essential, your business proposal can follow this format:
- Pricing, billing and legal
We go into detail on how you can write a business proposal (plus different business proposal templates you can apply the tips to) in the next section . But you can also click on the format items above to learn how you can best write them!
If you aim to create a holistic business proposal, feel free to just edit from the two templates right above. You can also add your brand colors and logo to your design, using My Brand Kit :
Here’s another example of a business proposal template that you can edit:
Generally, there are three types of business proposals:
1. Formally solicited
A formally solicited business proposal is made when you respond to an official request to write a business proposal.
In this scenario, you know all the requirements and have more (if not all) information about a prospective buyer. You simply need to write the business proposal for your buyer to evaluate so you can begin the sales process .
2. Informally solicited
Informally solicited business proposals are written when there isn’t an official request for a proposal. A prospective buyer is interested in your services and asks for a proposal so they can evaluate it.
An informally solicited proposal requires a lot more research from your end. These types of proposals are usually created out of informal conversations. They are not based on official requests which often contain more detail.
Think of this as a marketing brochure or a cold email . Unsolicited business proposals will often take a generic, one-size-fits-all approach to business proposals. Unsolicited proposals lack any understanding of the buyer or their requirements.
But with additional market research , personalization and identifying customer pain points , you can propose a customized solution based on your buyer’s needs. This can be a very persuasive approach, such as in this business proposal example:
Now that you know how to write a business proposal, let’s look at how you can optimize your proposal to deliver results!
Below you’ll find some winning business proposal templates and examples to get you started. I’ve also included some design tips to keep in mind when you’re creating your next business proposal:
1. Know your audience
If you have some clarity on who your ideal buyer is — their pain points, their budget, deadlines, among other things — you’ve already won half the battle.
If you are a business that helps clients with everything from running giveaways or helping grow their blog , identify which customers to pitch. This is a sure-shot way to close the deal.
Mapping user personas for your ideal buyer can help bring some clarity. It will also help you position your business proposal correctly. This improves the chance of your buyer moving your business proposal to the “Yes!” pile.
2. Put your brand front and center
If your company follows certain brand guidelines, incorporate them in your business proposal templates. Consider how business proposal examples like the one below highlight brand identity :
From the color palettes to the company logos , everything follows their brand guidelines. The result: a business proposal that’s consistent across the board.
Pro Tip: Switching this template to match your brand assets is actually pretty easy. Venngage’s My Brand Kit feature allows you to import your color palettes, logos as well as font choices. Any Venngage template can now be your template.
You can also consider this sample business proposal template:
Design companies sure do know their design. They did a phenomenal job keeping their brand colors consistent while opting for a black design. This unique color scheme also makes their white logo prominent throughout the proposal.
3. Try less text, more visuals
Have you ever read a proposal and thought to yourself, “Wow, this is all text and has no images, I love it!”? Yeah, me neither.
The free business proposal template below is a perfect example of the “less is more” principle. It does a phenomenal job of communicating what it needs to. By substituting some of the text with icons and visuals, you get a clean business proposal that’s much more scannable.
Want to keep things strictly professional? Instead of icons, you can always add your team’s headshots. This shows your buyer exactly who they’ll be working with.
Check out this formal business proposal format for some inspiration:
4. Switch up your business proposal designs
It doesn’t hurt to go above and beyond once in a while. Jazz up your business proposal template with some extra colors. This helps make your business proposal more engaging. It also helps your buyers retain information faster.
The business proposal example alternates between black, white and grey backgrounds. It still manages to maintain consistency in its branding . Just switching up your backgrounds once in a while can also bring in some variety to an otherwise standard business proposal.
This SEO business proposal sample proves that it’s possible to switch up the colors in every other page. But it still maintains the same color scheme across the entire proposal just like a professionally designed website :
Pro Tip: Not a color expert? Our guide on picking colors can help you pick the right color scheme for your proposals.
FAQ about business proposals
What is the purpose of a business proposal.
A business proposal aims to streamline the B2B sales process (which is often complex) between you as a seller and a buyer.
It does this by serving the dual purpose of acting as a source of information. The proposal also acts as a sales pitch aimed at convincing your buyer why they should buy what you have to offer.
What are the best practices for business proposal design?
- Do a thorough spell-check. The goal of your business proposal is to convince your buyer why you’re the perfect person for the job. A proposal with typos or grammatical errors communicates the opposite. A thorough spell-check before you send your proposal is a must.
- Keep things clear and readable: Clarity is an important aspect that you have to ensure in your business proposal. If you want your proposal to hit home and make an impact on the buyer, you have to write it in an understandable way. To keep things clear and readable, there are a couple of things that you can do. You can, for one, take care to use easy wording and segmented sentences from the get-go. You can also try paraphrasing the hard parts of your proposal once you are done writing it.
- Let your brand shine. As discussed before, writing a business proposal is all about knowing your ideal buyer and focusing on their pain points. But that doesn’t mean your business proposal template has to be boring. Demonstrate how different you are compared to other companies. You can do this through your brand guidelines , by using more visuals, switching up your proposal design or showing off your personality in your writing .
- Create a business proposal PDF. Downloading your business proposal in PDF format allows you to attach other collaterals with your business proposal. These can include a company explainer video or case studies showcasing the work done with past clients. Also, who doesn’t love saving paper?
How long should your business proposal be?
The length depends on the scope of the work as well as the complexity of the project. Here is a one-page business proposal template:
Can your business proposal template really be one page? Yes, as long as you understand who your buyer is and their pain points. You should also have the ability to communicate everything your ideal buyer needs to know about your business in a succinct manner.
Or if you’re feeling adventurous how about just two pages? Often, clients prefer if you go straight to the point and avoid all the fluff.
For example, this green modern marketing proposal template wastes no time in getting down to brass tacks:
Need more inspiration? Check out this blog on the 5 marketing proposal examples that’ll help elevate your business.
There is no one size fits all approach when it comes to deciding how many pages you should include in your business proposal template. And at the end of the day, “the only rules are the ones you set for yourself”.
At the end of the day, writing winning business proposals that sell is all about you understanding your buyer, their potential pain points and positioning yourself as someone who can alleviate those pain points.
Now that you know how to write compelling business proposals, what are you waiting for?
Take action and start creating your own business proposals to close more deals and grow your business today!
More business communications templates + writing tips you might be interested in…
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20+ Professional Business Letterhead Templates + Branding Tips
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How to Write a Business Proposal [Examples + Template]
Published: August 09, 2023
Free Business Proposal Template
Propose your business as the ideal solution using our Free Business Proposal Templates.
- Problem summary
- Proposed solution
- Pricing information
- Project timeline
Thank you for downloading the offer.
It's finally happened. You've started a new business, and your customer base is starting to expand. But even though you're making progress, you still feel like you could be doing better.
There's a whole world of untapped potential around you — prospects you know would benefit from your product or service. And the issues you're running into are less about your solution's soundness and more about how you can reach your potential base.
That's where business proposals come in. They can bridge the gap between you and potential clients. A solid proposal can outline your value proposition and persuade a company or organization to do business with you.
Here, we'll take a look at the various kinds of business proposals and go over how to write one. We’ll also see some ideas and examples to help guide yours.
Know exactly what you need? Jump to one of the following sections:
What is a business proposal?
Types of business proposals, how to write a business proposal, business proposal templates, business proposal example, tips for writing a business proposal, business proposal ideas.
A business proposal is a formal document that’s created by a company and given to a prospect to secure a business agreement.
It's a common misconception that business proposals and business plans are the same. The proposal helps you sell your product or service rather than your business itself.
Instead of assisting your search for investors to fund your business, a proposal helps you seek new customers.
Follow Along With HubSpot's Business Proposal Template
Download the Template for Free
There are two types of business proposals: unsolicited and solicited.
- Unsolicited Business Proposals : With unsolicited business proposals, you approach a potential customer with a proposal, even if they don't request one, to gain their business.
- Solicited Business Proposals : Solicited business proposals are requested by prospective clients so that they can decide whether to do business with your company.
In a solicited business proposal, the other organization asks for a request for proposal (RFP). When a company needs a problem solved, they invite other businesses to submit a proposal that details how they'd solve it.
Propose your business as the ideal solution using our Free Business Proposal Templates
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Fill out the form to get your template.
Whether the proposal is solicited or unsolicited, the steps to create your proposal are similar. Make sure it includes three main points:
- A statement of the organization's problem
- Begin with a title page.
- Explain your why with an executive summary.
- State the problem or need.
- Propose a solution.
- Share your qualifications.
- Include pricing options.
- Summarize with a conclusion.
Before writing your business proposal, it's crucial you understand the company. If they've sent you an RFP, make sure you read it carefully, so you know exactly what they want. It can also be helpful to have an initial call or meeting with the new client to ensure you fully understand the problem they're trying to solve and their objectives.
Once you've done your research, it's time to begin writing your business proposal. There's no one-size-fits-all approach to writing a business proposal, but let's take a look at some elements proposals often include. (I designed this example business proposal using Canva .)
1. Begin with a title page.
You have to convey some basic information here. Introduce yourself and your business. Be sure to include:
- Your company's name
- The date you submitted the proposal
- The name of the client or individual you're submitting the proposal to
Your title page should reconcile engagement with professionalism. It's a tone-setter, so you need to make sure yours is sleek, aesthetically appealing, and not too "out there."
Here's an example of what a business proposal template looks like when done right:
The executive summary details exactly why you're sending the proposal and why your solution is the best for the prospective client.
Specificity is key here. Why are you the best choice for them?
Like a value proposition, your executive summary outlines the benefits of your company's products or services and how they can solve your potential client's problem.
After reading your executive summary, the prospect should offer a clear idea of how you can help them, even if they don't read the entire proposal. Here's what one should look like:
3. State the problem or need.
This is where you share a summary of the issue impacting the potential client. This is your opportunity to show them you understand their needs and the problem they need help solving.
This section should show your authority in your industry. With this in mind, be sure to include:
- Case studies
- Client testimonials
- Relevant awards
- Industry accreditations
6. Include pricing options.
Pricing is where things can get a bit tricky, as you don't want to under or over-price your product.
The pricing section of your proposal could include:
- A detailed pricing breakdown, including packages, tiers, and add-ons or optional services
- How product features and benefits align with pricing choices
- Pricing for different needs and budgets
- How your pricing compares with competitors
- An FAQ section to respond to anticipated objections and explain your pricing strategy
7. Summarize with a conclusion.
After sharing the above information, simplify it all into one final section.
- First, briefly summarize the proposal. Be sure to share your qualifications and why you’d serve as the best choice.
- Then, to prompt further conversation, confirm your availability to go over the next steps.
- At the end of the proposal, the goal is to have the client ready to work with you. So, be sure to offer your contact information for easy follow-up.
In need of some inspiration before you begin writing? Here are example business proposal templates from popular business proposal software companies you can use to help create your proposal.
1. HubSpot's Free Business Plan Templates
Download these Templates
We know how crucial a great business proposal is to your and your client’s success. That's why we've compiled 2 Free Business Proposal Templates for you to use and customize for any of your projects.
You'll gain access to a concise, one-page template (pictured above), as well as a longer template for you to refine your plan and proposal.
Download the templates now to get started on building your proposal.
2. Web Design Proposal
Companies, big and small, dedicate resources to establishing a noticeable social media presence. With advertising on social networks projected to reach $82.23 billion dollars in 2025 , it's in your business's best interest to have a plan for growing your client's social media presence.
To help you in that effort, the information in this social media marketing proposal includes an executive summary to help introduce your high-level ideas, an assessment of the client’s company to show your diligence, and a breakdown of billing to show how your company charges for posting, content creation, and analytics.
8. Content Marketing Proposal
When pitching your content marketing services to clients, this template can help you organize your ideas. While it walks you through initial objectives and how to communicate your prospected results, one of the most helpful parts of this template is the pricing ideas it gives you when charging for your services.
Business proposal templates are helpful places to get started, but what should your business proposal look like when it's complete? Below, we share an example of a business proposal template that will inspire you.
In the business template example below, Social Portal Consulting (SPC) pitches a marketing proposal to Graphic Bean. At first sight, this proposal appeals to the creative. A nice touch would include designing the layout in your or your client’s brand colors.
Besides the design, the social media icons quickly tell the prospect what platforms Social Portal is pitching. Because we see Facebook, Twitter, Instagram, and Pinterest icons, the client instantly knows that this proposal doesn’t include LinkedIn, YouTube, or other platforms.
While maintaining its design, this example outlines Social Portal Consulting’s plans efficiently. It begins by providing insight into Graphic Bean and its goals before elaborating on how SPC can leverage its expertise to help them achieve them.
This business proposal template includes an easy-to-follow timeframe for goals and objectives while keeping the client abreast of how payment will happen across the project.
Overall, this is an excellent example of how to combine the elements of social media marketing into a creative and concise business proposal. Finally, we'll leave you with some business proposal ideas to get you started on your own.
- Start with an outline.
- Keep it simple.
- Stay on brand.
- Quality control.
- Include data and visuals.
- Add social proof.
- Use a call-to-action.
- Create a sense of urgency.
- Make the decision for them.
- Incorporate video into your proposal.
- Include up-sell and add-on opportunities.
- Clarify your terms and conditions.
- Include a space for signatures to document agreement.
- Create a table of contents.
1. Start with an outline.
If you want to produce a thoughtful, effective business proposal, you need to have some idea of what you're hoping to achieve with it.
So before you dive into writing, outline the major sections of your business proposal and the pertinent information you want to include. This will help you stay focused and make sure your message stays intact as you write.
Use these free business proposal templates to make sure that your outline includes everything you need.
2. Keep it simple.
There's no definitive blueprint for how long a business proposal has to be. Yours should be however long it takes to convey the information you want to get across.
That said, you're best off focusing on quality over quantity. Keep your sentences short and simple, and avoid including too much business jargon.
You want anyone who picks up your proposal to make sense of it. So, be straightforward and don't get too fancy. Aim for substance over flash.
3. Stay on brand.
Don't be afraid to let your company's personality shine through in your proposal. Stay true to your brand and show the client what sets you apart from your competitors.
4. Quality control.
A quick spelling and grammar check before you hit send isn't enough for a business proposal.
Your proposal needs to be clean and airtight. So, as you draft your proposal, and after checking for the basics, keep scanning this document until it's just right.
Check to make sure your proposal:
- Meets client needs and expectations
- Highlights your value proposition
- Is well-structured and easy to read or skim
- Complies with legal, ethical, and regulatory requirements
- Looks professional and engaging
5. Include data and visuals.
You want your business proposal to capture your prospect's attention and help set you apart from any other ones they might have received. One of the best ways to do that is to include hard, quantitative data that helps stress the value of your business.
Use relevant, compelling figures that highlight what you have to offer. This can establish authority and make your proposal more convincing. It also helps to include visuals such as charts and graphs to enhance your proposal.
6. Add social proof.
You can only be so convincing when you're personally talking up how great your business is. Adding social proof lends your proposal another degree of credibility.
Prospects are skeptical. They may not take you at your word. But they'll likely trust peers and fellow customers. That's why including elements like customer quotes and testimonials can go a long way.
7. Use a call-to-action.
Prospects need direction. The best proposal in the world can only take you so far if you don't clearly define the next steps. That's why you have to make sure the reader knows what to do after reading your proposal.
A clear call-to-action is the best way to get there.
Define and highlight exactly what they should do to act on the interest your proposal has generated. Without that guidance, you might leave your reader in limbo.
HubSpot customers : Use this CTA builder to create powerful customized CTAs.
8. Create a sense of urgency.
No one wants to feel as if they missed out on a great opportunity. Without urgency, your prospect might drag their feet and put off making a decision.
So, as you create your business proposal, your goal should be to create a sense of urgency.
When prospective clients read your business proposal they should feel that the best time to sign up for your service is now.
One way you can accomplish this is by stating your short and long-term goals for their business. They'll have to wait for the long-term goals, but you can make the short-term goals so enticing that they'll be ready to begin a collaboration.
9. Make the decision for them.
Craft your copy in a way that seems like saying "no" to the proposal would be stepping over dollars to pick up pennies. Your offer should go above and beyond their expectations. Do everything in your power to remove friction and objections along the way.
10. Incorporate video into your proposal.
If you're creating an online proposal using document file formats like PDF, add multimedia elements. This will enhance the proposal experience, make your document richer, and keep them engaged.
Try adding a video at the beginning as an intro to your proposal. Or, put a video in the project breakdown to verbally discuss some of the more confusing parts.
Extras like this can make an impression. This tip works especially well with prospects who are visual or auditory communicators.
Pro tip : HubSpot Video makes it easy to record and embed video into a website or email for a big proposal boost.
11. Include up-sell and add-on opportunities.
They say you won't receive unless you ask. And readers won't explore the upper tiers of your solutions if you don't give them the opportunity.
So, share some upsells and add-ons about your business that they can act on. Call out a specific pain point and how this extra can add value.
With this step, balance is important. Show them everything your business has to offer without overwhelming your recipient.
12. Clarify your terms and conditions.
Your business proposal should include details on your project timeline and payment schedule. This summary is basically what you and the client agree to if they accept your proposal.
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How to Write a Business Proposal — 2022 Guide and Template
A business proposal can make or break your chances of securing a new client. Write a great one, and you’ll likely snag their business.
Write a poor one, and you might lose out—even if you’re offering the best service out there. So, how do you write a business proposal? What is the proper format? What do you need to include?
While it all depends on your industry, and whether or not you’re offering a product or service, writing a business proposal is pretty straightforward. We’ll answer all those questions and more throughout the course of this guide.
What to expect with this business proposal guide
Whether you’re starting fresh or need to look at a specific section, here’s what we’ll be covering in this guide.
- What a business proposal is
- The differences between a business proposal and a business plan
- The format of a business proposal
- How long to make your business proposal
How to write a business proposal
You can download a free business proposal template here to start writing up your own proposal as you work through this article. By the end, you’ll be prepared to develop a well-written business proposal that can explain your business clearly and win more clients. Let’s get started.
What is a business proposal ?
A business proposal is a document you’d send to a prospective client, outlining the service you’re offering, and explaining why you’re the best person for the job.
It’s a pitch by a business or individual to complete a specific job or project, to supply a service, or, in some instances, to be the vendor of a certain product.
What are the different types of business proposals?
A business proposal can be either solicited or unsolicited. With a solicited proposal, the prospective client will put out a request for proposals; with an unsolicited business proposal, you are approaching a client in hopes of attracting their business, even though they did not explicitly request a proposal.
While both are commonplace, a solicited proposal is an easier sell, as your prospective client has already decided that they want to make a purchase or use a service, and they’re evaluating possible vendors or businesses.
With a solicited proposal, your prospective client might have issued an RFP, or “request for proposal.” This is exactly what it sounds like—they want you to send over a business proposal so they can take a look at it.
Differences between a business proposal and a business plan
A business proposal is not the same as a business plan . This is the most common misconception, but while there are areas of overlap (like your executive summary ) the two are different.
That being said, you can certainly pull information from your business plan while writing your business proposal—in fact, that’s a great way to start.
But don’t confuse the two; they are distinct and separate. In short, a business plan represents the cohesive strategy of how your business operates and makes money. A business proposal is an official pitch to clients selling your products or services.
A business proposal outlines a particular product or service offered by an established business to a prospective client.
You’re trying to sell your prospective client on your product or service, not on your business itself. You’re not after funding, as you are with a business plan, you’re trying to make a sale.
A business proposal is also not an estimate; although you’ll likely touch on costs and pricing in your business proposal, an estimate is much more informal and just a quick look at the costs, not the whole picture.
What goes into a business proposal?
Your business proposal should address the three Ps:
- Problem statement: What your customer’s current problem is
- Proposed solution: How your business solves that problem better than other solutions
- Pricing: How much that solution costs compared to alternatives
If you’re stuck on how to start, maybe try brainstorming first; start with these three points, and you’ll have a rough, bare-bones version of your business proposal.
Once you’ve done that if you’re ready to go more in-depth, here is a step-by-step look at how to format your business proposal.
Your business proposal should start with a title page, which should include your name, the name of your company, the name of the person to whom you’re submitting your proposal, and the date submitted.
Table of contents
Depending on how long your business proposal is, a table of contents is a nice touch. Include it after your title page, and before you launch into any details. If you’re delivering it as a PDF, including anchor links down to each section, so it’s easy to get to specific areas.
Introduce your proposal with a great executive summary, one that really sells your business and the products or services you provide—it’s about why you’re the right company for the job. You can draw from your business plan’s executive summary here, too.
Statement of problem, issue, or job at hand
Following your executive summary, go on to discuss the problem that the client is currently facing. Think of “problem” or “issue” loosely; after all, their main problem may just be finding the right person to complete their project. But be sure you understand why they want the product or service they’re seeking. If the proposal is for developing a brand new website, make sure you understand what they want to get out of the site—better sales, more content management flexibility.
This is the place to show your new client that you understand their needs , and fully grasp the issue they are trying to solve. Take this opportunity to restate the issue they are facing in your own words so that they know you understand what they are looking for.
Approach and methodology
This section shows how you plan to tackle your potential client’s problem, and the steps you’ll take to carry out your plan.
This is where you’ll get into the nitty-gritty of how you actually plan to fulfill your client’s needs. While earlier sections might have been a bit surface-level, this section of the business proposal is where you’ll go into detail about what steps you’ll take to solve their problem.
Be careful of going into too much detail, though—keep the jargon to a minimum. Your client should be able to follow along and get a clear sense of your plan, but you don’t want to drown them in minutiae.
Go ahead, brag a little—this is the section of your business proposal where you get to convince your potential client why you are the most qualified person to take on the job.
You can mention any relevant education, industry-specific training, or certifications you have, your past successful projects of a similar nature, years of experience, and so on.
Schedule and benchmarks
Be clear with your potential client: How long will your proposed project take?
Making sure you and your prospective client are on the same page from the outset will help make sure that the relationship stays positive for both of you, and that you don’t set your client up with unrealistic expectations.
While you might be tempted to underestimate how long it will take you to complete the project, don’t. Don’t promise what you can’t deliver!
If you’re offering a product, this section might not be applicable to you, so feel free to omit it. The business proposal format is flexible, so tailor it to suit your business and industry.
Cost, payment, and any legal matters
Here is where you get down to brass tacks and state the cost, and payment schedule if necessary.
How you structure this section will largely depend on the particular project or service you are offering. A section entitled “Fee Summary” may be sufficient if one-time payment is required; otherwise, a “Fee Schedule” list or pricing table might be more appropriate. Always refer back to the client’s RFP whenever possible, to make sure you’re supplying them with all the information they need to help make their decision.
If there are any legal issues to attend to, such as permits or licensing, include this information here. Feel free to add a section entirely devoted to handling the legal side of the project if need be.
This is your final sell—don’t be afraid to detail for your prospective client all they have to gain by choosing you to complete the project.
Impress upon your clients why you are the best choice, and all the ways in which their business will benefit from choosing you and your business as their solution.
How long should a business proposal be?
When it comes to the format of a business proposal, this is the million-dollar question without an answer. Remember in school, when you’d ask your teacher how long an essay should be, and they’d reply, “as long as it takes to answer the question.”
The same applies to your business proposal. It ultimately depends on your industry, the scope of the project, and the client’s specifications in terms of detail and elements included.
That being said, the tighter your initial proposal can be and the more directly you can make your point, the easier it will be to pitch it to clients. Start by following the business proposal format above as a guide, and you’ll be well on your way to creating a winning business proposal—and securing new clients.
Editor’s note: This article was originally written in 2018 and updated for 2021.
Briana is a content and digital marketing specialist, editor, and writer. She enjoys discussing business, marketing, and social media, and is a big fan of the Oxford comma. Bri is a resident of Portland, Oregon, and she can be found, infrequently, on Twitter.
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How to Write a Business Proposal in 7 Steps
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Whether you’re a B2B or a B2C company, you’re in the business of convincing customers to choose to spend their money with your business. For a B2B company that process usually involves a business proposal. In the B2B industry, once you've attracted new customers, which are most likely other businesses, you have to actually make a deal. Unlike B2C companies, who use marketing strategies and then hope their customers respond and purchase their product and service, there's a little more involved in this exchange. That's where your business proposal will come into the picture.
Luckily, even though your process and the exact format for your business proposal can be unique to your company, there is also a general formula you can follow to make things easier, especially the first few times you write a proposal.
In this guide, we'll walk you through the general steps of how to write a business proposal—including how to decide what kind of proposal you're writing, how you should organize it, and what information you should include.
How to write a b usiness proposal: 7 essential steps to follow
With these starting points in mind, let's get down to the process. Whether you’re just learning how to write a business proposal, or want to change up the one you’ve already been using, you’ll want to break down writing into a step-by-step approach. The organization is key when you’re writing a business proposal—structure will not only help you answer the core questions mentioned above, but it’ll also help you create consistent, successful proposals every time you’re pitching new business.
This being said, when writing a business proposal, you can break down the document into these sections:
Table of contents
Deliverables and milestones
Bonus: Appendix (if necessary)
Step 1: Introduction
The introduction to your business proposal should provide your client with a succinct overview of what your company does (similar to the company overview in your business plan). It should also include what sets your company apart from its peers, and why it’s particularly well-suited to be the selected vendor to undertake a job—whether the assignment is a singular arrangement or an ongoing relationship.
The most effective business proposal introductions accomplish more with less: It’s important to be comprehensive without being overly wordy. You'll want to resist the temptation to share every detail about your company’s history and lines of business, and don’t feel the need to outline every detail of your proposal. You'll want to keep the introduction section to one page or shorter.
Step 2: Table of contents
Once you've introduced your business and why you're the right fit for the client you're submitting the proposal to (a quasi-cover letter), you'll want to next create a table of contents. Like any typical table of contents, this section will simply outline what the client can expect to find in the remainder of the proposal. You'll include all of the sections that we'll cover below, simply laid out as we just did above.
If you're sending an electronic proposal, you may want to make the table of contents clickable so the client can easily jump from section to section by clicking the links within the actual table of contents.
Step 3: Executive summary
Next, your business proposal should always include an executive summary that frames out answers to the who, what, where, when, why, and how questions that you’re proposing to the client lead. Here, the client will understand that you understand them.
It's important to note that despite the word "summary," this section shouldn't be a summary of your whole business proposal. Instead, this section should serve as your elevator pitch or value proposition. You'll use the executive summary to make an explicit case for why your company is the best fit for your prospect’s needs. Talk about your strengths, areas of expertise, similar problems you’ve solved, and the advantages you provide over your competitors—all from the lens of how these components could help your would-be client’s business thrive.
Step 4: Project details
When it comes to how to write a business proposal, steps four through six will encompass the main body of your proposal—where your potential client will understand how you’ll address their project and the scope of the work.
Within this body, you'll start by explaining your recommendation, solution, or approach to servicing the client. As you get deeper within your explanation, your main goal will be to convey to the client that you’re bringing something truly custom to the table. Show that you've created this proposal entirely for them based on their needs and any problems they need to solve. At this point, you'll detail your proposed solution, the tactics you’ll undertake to deliver on it, and any other details that relate to your company’s recommended approach.
Step 5: Deliverables and milestones
This section will nest inside the project details section, but it’s an essential step on its own.
Your proposal recipient doesn’t get merely an idea of your plan, of course—they get proposed deliverables. You'll outline your proposed deliverables here with in-depth descriptions of each (that might include quantities or the scope of services, depending on the kind of business you run). You never want to assume a client is on the same page as you with expectations, because if you’re not aligned, they might think you over-promised and under-delivered. Therefore, this is the section where you'll want to go into the most detail.
Along these lines, you can also use this section of the prospective client's proposal to restrict the terms and scope of your services. This can come in handy if you’re concerned that the work you’re outlining could lead to additional projects or responsibilities that you’re not planning to include within your budget.
Moreover, you might also want to consider adding milestones to this section, either alongside deliverables or entirely separately. Milestones can be small, such as delivery dates for a specific package of project components, or when you send over your first draft of a design. Or, you can choose to break out the project into phases. For longer projects, milestones can be a great way to convey your company’s organization and responsibility.
Step 6: Budget
There’s no way around the fact that pricing projects isn’t easy or fun—after all, you need to balance earning what you’re worth and proving value, while also not scaring away a potential client, or getting beaten out by a competitor with a cheaper price. Nevertheless, a budget or pricing section is an integral part of a business proposal, so you'll want to prepare your pricing strategy ahead of time before getting into the weeds of any proposal writing.
This being said, if you fear the fee might seem too high to your potential client, you might decide to break out the individual components of the budget—for example: social media services, $700; web copywriting $1,500—or create a few different tiers of pricing with different services contained in each. The second approach might not work for all types of businesses or proposal requests, but it may be worth considering if you’re worried about your overall fee appearing steep.
With these points in mind, once you've determined how to outline your pricing, you'll list it out (you might even include optional fees or services) and the overall cost for the scope of work you've described.
Step 7: Conclusion
Finally, your conclusion should wrap up your understanding of the project, your proposed solutions, and what kind of work (and costs) are involved. This is your last opportunity to make a compelling case within your business proposal—reiterate what you intend to do, and why it beats your competitors’ ideas.
If you're writing an RFP, again, meaning a potential client has requested this document from you, you might also include a terms and conditions section at this point. This end-on piece would detail the terms of your pricing, schedule, and scope of work that the client would be agreeing to by accepting this proposal.
Bonus step: Appendix (optional)
After the conclusion, you might also decide to include an appendix—where you add any supplemental information that that either doesn’t fit within the main proposal without being disruptive for the reader, or is less than essential to understanding the main components of your proposal. You’ll likely only need an appendix if you have stats, figures, illustrations, or examples of work that you want to share with your potential client. This being said, you might also include contact information, details about your team, and other relevant information in this section.
If you don't have any additional information to include, don't worry—you can end your business proposal with the conclusion section.
Business proposal considerations
Before you dive into determining how to write a business proposal that will give you a competitive edge, there are a few important things to keep in mind.
First, you'll want to make sure that you’re accomplishing the right objectives with your proposal. When writing a business proposal, you’re trying to walk a line between both promoting your company and addressing the needs of your would-be client, which can be difficult for any company to do.
This being said, you'll want to remember that a business proposal is different than a business plan, which you likely already wrote for your company when you were starting your business. Your business plan spells out your company's overall growth goals and objectives, but a business proposal speaks directly to a specific could-be client with the purpose of winning their business for your company.
With this in mind, in order to write a business proposal for any potential client, you'll need to establish your internal objectives and how these will contribute to the work you're proposing. To explain, you'll need to consider the following:
What tasks will need to be done for this work?
Who will do each task, and oversee the job at large?
What you’ll charge for the job?
Where will the work be delivered?
When will it be done?
Why are you the best fit for the job the client needs to be accomplished?
How will you achieve results?
Not only are these questions at the heart of clear and concise writing, but you also won't be able to write your business proposal without answers to them. So as you're going through the different pieces of your business proposal, keep in mind the objectives of your business, while also remaining persuasive regarding why the potential client should work with you instead of someone else.
The next important thing you'll need to keep in mind before you start writing a business proposal is what kind of proposal are you writing. Essentially, there are two types of business proposals—solicited proposals where someone requested the proposal from your company—and unsolicited proposals, where you're sending the document to another business unprompted.
In the case of solicited proposals, often called RFPs (short for a request for proposal), it’s likely that this potential client already knows at least a little about your business. With these kinds of business proposals, you'll want to spend less time convincing the client that you're the best small business consultant for the job and more on making your proposal feel custom to their specific brief, project, or problem. On the whole, the less generic your business proposal is, the more likely you are to win the work.
Unsolicited proposals, on the other hand, are much harder to sell.
As you’re writing a business proposal to a company that doesn’t know they may need your services, you’ll want to focus on getting them to understand why your company is specifically unique. You want to show them that you can add significant value to their business that they don’t already have. If there is currently someone performing the function you would like to, the sell will even be more difficult.
Business proposal examples
So, now that we've gone through all of the steps to show you how to write a business proposal, let's discuss some examples. As you go through the writing process, you might find it's helpful to consult external resources to review business proposal samples or templates and see how other businesses have structured these types of documents. Specifically, it might be even more helpful to review business proposal examples that relate to your particular industry—such as marketing, advertising, or finance.
General business proposal sample
If you're looking for a general business proposal example, you might consult BPlan, which offers advice, examples, and templates for the documents that are required to plan and operate a small business. In the BPlan sample, BPlan breaks their example into three overarching parts—a problem statement, a proposed solution, and a pricing estimate. This may be a good place to start if you're writing a business proposal for the first time and need a simple, general example to follow.
For a solicited proposal or RFP, you may want to reference a business proposal example that specifically operates under the assumption that you've been asked for this proposal. In this case, you may check out one of the downloadable RFP templates from Template Lab.
Template Lab offers both Word and PDF versions of their templates—and these business proposal samples will include sections more appropriate for RFPs including terms and conditions, scheduling, and points of contact.
Business proposal template services or software
For the most advanced and plug-and-play type business proposal samples, you may decide to utilize a service like Proposify or PandaDoc. These software services allow you to choose from their library of professionally designed and outlined business proposal examples (which are also usually industry-specific) and customize the template for your business's needs.
It's important to note, however, that although you may be able to sign up for a free trial for these services, most of them will eventually require a paid subscription.
5 best practices for writing a business proposal
Writing a business proposal can seem overwhelming at first, as it requires you to provide information about your company and its services as they relate specifically to what your prospect needs. As you go through the process again and again, however, it will become easier and easier to write a succinct and effective business proposal.
This being said, there are a few best practices you can keep in mind to help you as you get started:
1. Be direct.
Although you might feel the urge to show off your language skills while trying to impress a client, when you’re writing a business proposal, tour best bet to win business is to be clear, concise, and direct. You won't want to use overly flowery language or anything that could possibly be misconstrued.
2. Don’t leave room for ambiguity.
You'll want to make sure your proposal is straightforward and easy to understand, with no room for misinterpretation around what you say you’ll do or deliver.
Therefore, you'll want to avoid overly complicated industry jargon to be sure your client can understand exactly what you're talking about and what it means within the scope of your (and their) business.
3. Write for the right audience.
If you were writing a proposal for a specialty food business, it shouldn't look or sound exactly the same as if you were writing a proposal for an asset management company. You'll always want to keep your audience in mind as your craft and develop your proposal.
Ultimately, your best bet is to be straightforward, clear, and stick to the details, but you also shouldn't be afraid to tailor your writing to your audience so that your client feels that the proposal has truly been created with their business in mind.
This being said, your proposal should show that you not only understand your potential client but that you also respect them professionally.
4. Consider a title page.
Although this may not be necessary for a shorter business proposal, a title page can help with the general organization, flow, and professional feel of your document.
Like a title page for any other type of report, this one-page cover sheet would precede the remainder of your proposal and would likely include your business's name, contact information, and logo, as well as who you're submitting the proposal to.
Depending on your business or the potential client you're submitting the proposal to, you might decide that a title page is unnecessary, however, it's worth keeping in mind that it may be something to visually draw in your reader from the start.
5. Err on the side of brevity.
Finally, within the world of business proposals, shorter is usually better. This isn't to say, of course, that you should leave out details or omit important sections—it simply means that you should try to find the most succinct way to say what you need to say and get your point across to the potential client.
The bottom line
There's no doubt about it—learning how to write a business proposal is a lot of work. Luckily, however, you can follow our steps so you know what to include in your proposal and how to include it.
Ultimately, selling your services to potential clients is part of running and managing your business and as you do it again and again, it will only become easier.
This being said, as you go through the lifecycle of your business, you'll begin to accumulate a library of business proposals that you can continuously reference and use to develop your pitching strategy and writing process based on proposals that have and have not worked. And, hopefully, by taking the time to invest in this business proposal process, you'll be winning the work you need to grow your business.
This article originally appeared on JustBusiness, a subsidiary of NerdWallet.
On a similar note...
Sales | How To
How to Write a Business Proposal (+ Template & Examples)
Published February 27, 2023
Published Feb 27, 2023
REVIEWED BY: Jess Pingrey
WRITTEN BY: Bianca Caballero
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Free Business Proposal Template
- 1 Determine Sales Proposal Requirements
- 2 Gather Necessary Information
- 3 Design Your Proposed Solution
- 4 Calculate Pricing
- 5 Draft Your Proposal
- 6 Edit Your Proposal Draft
- 7 Send Your Proposal
- 8 Follow Up With Your Recipient
- 9 Best Practices in Writing Sales Proposals
- 10 Bottom Line
A business proposal is a document sent to a prospective client that outlines a firm’s product or service offerings. It also explains how you will provide a solution, the cost, timeline, and qualifying information, such as your background and prior work experience. In this article, we outline eight steps for how to create a business proposal, offer a free proposal template, and provide best practices for writing proposals.
Creating a sales proposal can feel tedious, especially if you’re drafting it from scratch each time. We’ve created a free template that you can use as a resource for your sales proposal.
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Free Sales Business Proposal Template
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After you’ve downloaded our free template above, you can now customize it according to your business needs as you follow the steps to writing a proposal below:
1. Determine Sales Proposal Requirements
The first step in learning how to write a business proposal is knowing what needs to be included. Government agencies, public universities, and large corporations typically use requests for proposals (RFPs). These are formal solicitation requests for products or services in which the requirements are normally laid out line by line and must be followed precisely.
If you are writing a proposal for a potential customer undergoing your unique sales process , include things a decision-maker would like to see. For instance, pricing, timelines, and the proposed solution regarding quantities and the mode of product or service delivery are critical purchasing factors enclosed in the document.
Pro tip: ClickUp is a free-forever project management tool that helps teams:
- Create professional proposals
- Collaborate with shared tasks and team chat
- Assign tasks to teammates
ClickUp project management board (Source: ClickUp )
2. Gather Necessary Information
Gathering essential information and materials for your proposal can be complex because each potential client may want different details. This could demand other personnel to get involved in pulling the documents and information needed. For instance, some may only request the price and proposed solution, while others will ask for your background story, client reference lists, and work samples to show you’re qualified.
While learning how to write a proposal for business purposes, you may have to dig around your file database for company information, employee biographies, marketing materials, and pricing sheets. Keeping all resources needed for a proposal in one place makes this process easier. Use customer relationship management (CRM) systems to track your proposal progress and acquire what’s needed to draft it in one place.
Pro tip: HubSpot is a popular CRM platform that lets you monitor opportunities using sales pipelines and store documents—all in one system. You can utilize the Sales Documents feature to store, share, and customize templates and materials you’ll need for your proposals.
HubSpot’s deals and opportunities pipeline (Source: HubSpot )
HubSpot’s Sales Documents library (Source: HubSpot )
3. Design Your Proposed Solution
Your proposed solution involves the processes, materials, product quantities, and personnel required to fulfill the offerings or address your customer’s problem statement. Additionally, it should be included in the scope of work section in the proposal. For businesses that only provide a product, such as equipment for a manufacturing plant, this step could be as easy as knowing the quantity and having a logistics plan for delivery and installment.
For more service-based businesses, such as business consultants or content development services, there will likely be more steps and deliverables to complete the work. Regardless of your business, you can use the five W’s and an H methodology to construct a proposed solution that addresses your prospect’s primary pain points:
- Who: Who will be involved, do the work, manage, and be a point of contact for the prospect?
- What: What solutions or products will be delivered, and what resources, processes, or technology will be used?
- Where: Where will work be done or delivered to?
- When: When will the work start and be completed, what are the key milestones throughout the project, and when is each deliverable expected to occur?
- Why: Why did you choose this particular solution for this customer’s needs?
- How: How will work be done, managed, and checked for high quality and customer satisfaction?
For example, a business-to-business (B2B) content writing business might be trying to address a statement of needs issued by a client: “We would like to express thought leadership on the topic of the Zero Trust Cybersecurity Framework.” In this case, the business could use the solution in this business proposal example:
The objective of this business proposal is to demonstrate how ABC Writing Agency can promote the thought leadership of Cybersecurity Corp. for the Zero Trust Security Model. We believe the best course of action is to research and copyright a branded e-book (roughly 4,000 words) regarding Zero Trust Security, the details of the solution, its benefits, and the modern-day security challenges it solves (what) with the final product completed in August 2022. (when) The e-book will use your logo and branding scheme to convey your personal grasp on the subject and thought leadership using a series of direct quotes and statistical callouts. (why)
To ensure high-quality work and client satisfaction, we will begin with an initial call to construct a detailed outline discussing the sections, style guides, tone, and to retrieve direct quotes. Following an initial draft, multiple rounds of edits will take place between Cybersecurity Corp. and ABC Writing Agency to develop a final draft. (how)
The project will be led by our senior editor, Collin Buchanan, and content manager, Jake Cunningham, who comes from the world of cybersecurity. Our team will utilize and manage freelancers experienced in writing e-books on technical topics to research and copyright the asset. (who) All work will be completed by us virtually and delivered via Google Docs. (where)
4. Calculate Pricing
Once you know how you’ll provide your product or service, the next step in writing a proposal is formulating the costs to specify in the document’s pricing section. This is one of the toughest steps because of all the factors that need to be considered, such as product cost and other expenses. That’s why it is critical to accurately communicate your costs to avoid losing a deal for overcharging—or worse—winning a deal with significantly underestimated costs.
As you price everything, you can either do a flat fee, hourly rate, per-unit charge, or some combination of the three. Sometimes, it’s best to work backward by establishing your desired probability first in the form of a percent like 20% profit or a flat dollar amount such as $10,000 above the work cost.
For example, you want to make a 20% profit on the work for an equipment installation job for a manufacturing business, and you’re pricing using a flat fee. You’ve itemized the costs as the following:
- 1 x $80,000 manufacturing equipment = $80,000
- 3 installation/delivery employees x 5 hours x $32 per hour = $480 wages
- $480 employee wages x 7% employer payroll tax = $33.6 payroll tax
- $480 employee wages x 20% benefits and workers’ compensation = $96 benefits and compensation
- $200 for the delivery truck and gas = $200 for delivery costs
When you add all the itemized expenses, the total cost for this installation job will be around $80,809. To get the total, you need to charge this customer to meet your desired profitability, and multiply it by 20% to get $16,162. Add that to your total cost ($80,809 + $16,162), and $96,971 is the flat fee you will charge for the installation job.
Pro tip: Struggling to visualize your pricing process? Try using these seven free estimate templates . Designed for various business types, these templates allow you to outline and itemize the costs of providing work to share with your customers to help win more deals easily.
5. Draft Your Proposal
Now that you know your proposal requirements, have gathered the necessary information, determined the proposed solution, and calculated pricing, you are ready to draft the document. Following along with our free template, your draft will consist of the following elements:
The title page leans more toward showing the professionalism of your business than providing information. There should be a specific title establishing the purpose, such as “ABC Writing Agency Proposal for Cybersecurity Corp. to Promote Thought Leadership on Zero Trust Security.”
Also, be sure to indicate who the proposal was prepared for in terms of the decision-making person and their company name. Add your logo to the front and the contact information for the primary point of contact for your business so they can contact you with further questions.
Table of Contents
Use a table of contents to break down each part of the proposal for business so they can easily navigate through it. Because of the digital age we live in, we recommend linking your table of contents electronically to each associated section. That way, those reading your proposal can go to any part of the document by clicking on the table of contents.
The executive summary takes everything in your proposal and compresses it into one paragraph. Essentially, if a reader reads this section, they should be able to grasp the general idea of your solution. Here’s a business proposal example using the content writing example above:
With over 10 years of experience in writing high-quality marketing assets, we are eager to assist Cybersecurity Corp in its endeavor to promote thought leadership on Zero Trust Security. We plan to achieve this by writing a comprehensive e-book using engaging copy, stat callouts, and direct quotes from your leaders to help associate the security framework with your brand.
Here’s your time to talk about your inception story, mission statement , founding purpose, and company history. You can also provide biographies and professional pictures of your company founders, leaders, and key personnel that might be involved in the work you provide.
This is also the time to express your unique selling proposition . In other words, addressing the question “why choose us” over competitors. Lastly, if you’ve had any recognition or won any company awards, this is the section to highlight those successes.
Scope of Work
This section correlates with creating your proposed solution in step three as you present it in an actionable business plan. Describe the work that will be completed and the tangible deliverables associated with it.
In this small business proposal example, we see how a content writing business might construct a scope of work:
We will provide content writing services to create predetermined marketing assets for Cybersecurity Corp. This includes researching online data for usable information, interviewing subject matter experts (SMEs) for additional insights and quotes, copywriting drafts, inserting callouts, and making edits per revision requests made by Cybersecurity Corp. Deliverables for the scope of work above include:
- 1 x outline developed by ABC Writing Agency and approved by Cybersecurity Corp.
- 1 x drafted e-book (max. 4,000 words) delivered by Google Doc
No matter how long your scope of work is, it’s crucial to avoid industry or technical jargon that the general audience may not understand. Take the time to review the scope of work and translate any statements that may be misunderstood or confusing.
Be sure to indicate how long you expect it to take to complete the entire scope of work. It’s also a good idea to provide estimates for each milestone or individual deliverable you set. Whenever possible, present the information visually to help your reader absorb it better. Below is a sales proposal timeline example for a sales consulting business and its milestones.
Pricing or Price Estimate
For this section, take the price calculation you did in step four and present it to the potential customer. While you should itemize it to show where the price comes from, avoid adding your desired profitability, as that should be private to your business. Make sure it’s clear as to how each item is priced, whether that be hourly, per unit, or a flat fee.
This section should also be used to explain payment expectations, e.g., when invoices must be paid by, how much money is required upfront vs after work is completed, refund policy, and if other billable expenses can be included automatically or require client approval.
Be upfront with your estimate if you don’t know how many units you’ll need or how many hours it will take to accomplish your business offering. Provide an explanation and an estimated range.
Conclusion, Terms & Appendix
The final sections should include additional information that could be useful to your prospective client. A conclusion should express your gratitude for the opportunity and explain the next steps to move forward. Terms (or terms and conditions) can be added in a proposal or in the service agreement to cover legal aspects of a working contract, like contract dispute policies, confidentiality, rules on subcontracting, etc.
The appendix is optional but would utilize visuals or supplemental documents to enrich your proposal. For instance, you might include links to sample work, a client reference list, or a catalog of options for materials or software vendors from which the client can choose.
6. Edit Your Proposal Draft
Once you have completed the first draft of your proposal, run it by multiple departments to ensure it is comprehensive and accurate. Some things to consider as you review it for potential revisions:
- Has strong readability: The proposal uses appropriate style, tone, and structured sentences to create a clean flow of information understood by the specific reader.
- Avoids grammar and technical errors: The proposal avoids punctuation, spelling, or other errors related to proper writing mechanics.
- Addresses requirements: The proposal contains all the information and sections required to meet the reader’s or customer’s needs and objectives.
Use editing tools such as Grammarly to evaluate your business proposal writing for enhanced quality. Grammarly lets users upload text into a system to check for grammar and spelling mistakes as well as for engagement and readability of content. There’s also a plagiarism check feature to evaluate the text to billions of pages online. You can even adjust style preferences when subscribing to Grammarly Business to ensure it meets all your goals.
Grammarly Business’ in-line writing suggestion (Source: Grammarly Business )
Pro tip: Use graphic design tools like Canva to give your sales proposal the professional touch it needs. Canva is a user-friendly platform with thousands of free templates for presentations, marketing materials, social media posts, and proposals for business. Users of all design skill levels can easily turn regular copies into visual masterpieces.
Canva’s sales proposal templates (Source: Canva )
7. Send Your Proposal
Now that your proposal is drafted, edited, and has the aesthetics it needs, it’s time to send the document for review. More formal submissions for RFPs may require that you submit them in person, electronically, or both, so review those provisions carefully before sending them in.
Some sales plans incorporate unsolicited proposals to new leads to present problems they didn’t know existed with viable solutions they could offer. In these cases, they use the proposal to get their foot in the door and create sales opportunities.
When taking this course of action, it’s important to add context to the unsolicited proposal. For instance, in a sales email , briefly introduce yourself, your business, and what services you provide. Furthermore, indicate why you wanted to send a proposal to them specifically and let them know they can reach out if they wish to discuss it further.
8. Follow Up With Your Recipient
Even after you send a proposal, the process is not over. Make time to follow up to confirm the contact received the proposal and see if they have any questions. Because of the proposals’ details, there are usually other clarification steps in the procurement process, such as interviews, client meetings , or sales presentations before work begins.
We recommend using a customer relationship management (CRM) system with task management capabilities to ensure sales reps don’t forget to reach out to a prospect after a proposal is initially sent. A CRM like Pipedrive lets you design and assign tasks to team members from within a project. You can also create projects that are linked to open or won deals.
Pipedrive’s project and task management feature (Source: Pipedrive )
Best Practices in Writing Sales Proposals
Now that you know the steps in how to write a business proposal, there are a few tips you can practice and maintain to produce thoughtful and effective proposals.
Keep It Simple
When learning how to make a business proposal, remember to write short, simple sentences. While there is no strict rule on the business proposal format or length, make sure it is straightforward and easy to understand. Avoid loading it with too much business jargon and fancy words. Instead, strike the sweet spot between conveying essential information and ensuring anyone who reads it can understand it.
Outline Major Sections & Pertinent Information
The first thing to do when learning how to do a business proposal is to outline all the major sections of your document. This should also include all the pertinent information that you want to get across. The business proposal outline will help you stay focused on the main points of the document and keep your ideas from drifting away.
Add Data & Visuals
Capture your prospect’s attention by including quantitative data and figures highlighting your offerings and the value of your company. For example, you can show your month-on-month sales trends as proof of your stellar performance. Adding visual elements like charts and graphs can also help make your proposal more engaging.
Pro tip: Maximize the use of visualization tools from your CRM. For example, Pipedrive allows you to create a sales flow chart based on reports, making it easier to generate the best data to make your offerings more appealing.
Increase Credibility With Social Proof
Assert your company’s credibility. Many prospects won’t readily believe your claims about your business and are most likely to trust the word of their own peers and other customers. To help build your credibility and gain their trust, include social proof, such as reviews and testimonials from your own customers.
Use a Call to Action (CTA)
After the prospect reads your proposal, direct them to the next step. Use a call to action with a verb that defines what they should do to act on their interest in your proposal. Examples of CTAs are “Subscribe today” or “Download this guide now.” You can also use a CTA with a no-obligation statement like “Sign up, it’s free” for prospects who perceive risks in taking action.
Another excellent idea when adding CTAs is to create a sense of urgency to make your prospect feel that now is the best time to subscribe to your service. Some people are motivated to do something right away for fear of missing out (FOMO). That said, phrases like “Limited-time offer” and “On sale now for 20% off” can trigger action from prospects.
Stay True to Your Brand
Each company has a different brand voice and personality. Staying true to your business brand is a great way to stand out among your competitors. For instance, if your company sells baby clothes, it is best to use language that parents with babies can relate to, like “cute and cuddly” or “snug and comfy.” Use a more formal tone of voice in your proposal if you are selling office wear.
Many business owners and sales managers would like to standardize their proposal-writing system. However, it can be tricky to address the unique needs of every solicited and unsolicited opportunity to get the correct information in order and present their proposed solutions. Our how-to sales proposal examples and free template will help you streamline your bidding process to win more deals.
About the Author
Find Bianca On LinkedIn
Bianca Caballero is a subject matter expert at Fit Small Business who covers Sales and Customer service topics. Prior to working at FSB, she was in field sales and territory management. When she launched her career as a writer, she worked with companies from the US, Australia, and China. She gained expertise in writing and editing news, health, technology, and business articles. At present, she uses her decade-long writing experience to provide FSB readers with the best answers to their questions.
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How to Write a Proposal
Last Updated: August 2, 2023 References Approved
This article was co-authored by Dave Labowitz . Dave Labowitz is a Business Coach who helps pre-entrepreneurs, solopreneurs/entrepreneurs, and team leaders start, scale, and lead their businesses and teams. Before beginning his coaching career, Dave was a startup executive who spent over a decade building high-growth companies. Dave’s “path less traveled” life includes adventures such as dropping out of high school, co-authoring a book in the Smithsonian Institute, and getting his MBA at Pepperdine’s Graziadio Business School. There are 8 references cited in this article, which can be found at the bottom of the page. wikiHow marks an article as reader-approved once it receives enough positive feedback. This article received 81 testimonials and 85% of readers who voted found it helpful, earning it our reader-approved status. This article has been viewed 3,961,711 times.
Writing a good proposal is a critical skill in many occupations, from school to business management to geology. The goal of a proposal is to gain support for your plan by informing the appropriate people. Your ideas or suggestions are more likely to be approved if you can communicate them in a clear, concise, engaging manner. Knowing how to write a persuasive, captivating proposal is essential for success in many fields. There are several types of proposals, such as science proposals and book proposals, but each following the same basic guidelines.
Planning Your Proposal
- Who will be reading your proposal? What level of familiarity with your topic will they have? What might you need to define or give extra background information about?
- What do you want your audience to get from your proposal? What do you need to give your readers, so they can make the decision you want them to make?
- Refine your tone to meet your audience's expectations and desires. What do they want to hear? What would be the most effective way of getting through to them? How can you help them understand what you're trying to say?
- What is the situation this issue applies to?
- What are the reasons behind this?
- Are we certain that those, and not others, are the real reasons? How are we sure of it?
- Has anyone ever tried to deal with this issue before?
- If yes: has it worked? Why?
- If no: why not?
Tip: Use your summary to show that you've conducted in-depth research to evaluate and understand the issue. Include only the information that's most relevant to your topic, and avoid writing a summary that's obvious to anyone in the field.
- Your proposal needs to define a problem and offer a solution that will convince uninterested, skeptical readers to support it. Your audience may not be the easiest crowd to win over. Is the solution you're offering logical and feasible? What's the timeline for your implementation?
- Consider thinking about your solution in terms of objectives. Your primary objective is the goal that you truly must achieve with your project. Secondary objectives are other goals that you hope your project achieves.
- Another helpful way of thinking about your solution is in terms of "outcomes" and "deliverables." Outcomes are the quantifiable results of your objectives. For example, if your proposal is for a business project and your objective is "increase profit," an outcome might be "increase profit by $100,000." Deliverables are products or services that you will deliver with your project. For example, a proposal for a science project could "deliver" a vaccine or a new drug. Readers of proposals look for outcomes and deliverables because they are easy ways of determining what the "worth" of the project will be.
- How are you going to be persuasive? Convincing proposals can use emotional appeals, but should always rely on facts as the bedrock of the argument. For example, a proposal to start a panda conservation program could mention how sad it would be for the children of future generations to never see a panda again, but it shouldn't stop there. It would need to base its argument on facts and solutions for the proposal to be convincing.
Avoid writing in jargon and using obscure abbreviations or needlessly complex language. Instead, write in plain, direct language as much as possible.
For example, instead of saying "rectification of a workplace imbalance," you could simply write, "let employees go."
- Your outline should consist of your problem, your solution, how you'll solve it, why your solution is best, and a conclusion. If you're writing an executive proposal, you'll need to include things like a budget analysis and organizational details.
Writing Your Own Proposal
- If you have any stark facts that shed some light on why the issue needs to be addressed and addressed immediately, it's a safe bet that's something you can start with. Whatever it is, make sure what you start out with is a fact and not an opinion.
- Emphasize why your problem needs to be solved and needs to be solved now. How will it affect your audience if left alone? Make sure to answer all questions and cover them with research and facts. Use credible sources liberally.
Tip: Make the issue as relevant to the audience as you can. Tie it to their interest or goal as directly as you can. Make it specific to them, and avoid relying solely on generic appeal to emotions or values.
- Discuss the larger impact of your ideas. Ideas that seem of limited applicability aren't as likely to spark enthusiasm in readers as ideas that could have widespread effects. Example: "Greater knowledge of tuna behavior can allow us to create a more comprehensive management strategy and ensure canned tuna for future generations."
- Addressing why you will do something is as significant as stating what you will do. Presume that your readers are skeptical and will not accept your ideas at face value. If you're proposing to do a catch-and-release study of 2,000 wild tuna, why? Why is that better than something else? If it's more expensive than another option, why can't you use the cheaper option? Anticipating and addressing these questions will show that you've considered your idea from all angles.
- Your readers should leave your paper assured that you can solve the problem effectively. Literally, everything you write should either address the problem or how to solve it.
- Research your proposal extensively. The more examples and facts you can give your audience, the better -- it'll be much more convincing. Avoid your opinions and rely on the hard research of others.
- If your proposal doesn't prove that your solution works, it's not an adequate solution. If your solution isn't feasible, nix it. Think about the results of your solution, too. Pre-test it if possible and revise your solution if need be.
- Your readers probably understand that your budget may change, especially if this is a startup project, but they want to see that you at least have a cohesive plan. They have to see that you know directionally where you're going to spend the money and how long it's going to last.
- When do you envision the project starting? At what pace will it progress? How does each step build on the other? Can certain things be done simultaneously? Being as meticulous as possible will give your readers confidence that you've done your homework and won't waste their money.
- Make sure your proposal makes sense financially. If you're proposing an idea to a company or a person, consider their budget. If they can't afford your proposal, it's not an adequate one. If it does fit their budget, be sure to include why it's worth their time and money.
Tip: Stay away from vague or unrelated objectives! Include details, responsibilities, and time commitments for departments and individual staff.
- If you have extra content that doesn't exactly fit into your proposal, you may want to add an appendix. But know that if your paper is too bulky, it may scare people off. If you're in doubt, leave it out.
- If you have two or more appendices attached to your proposal, letter them A, B, etc. This can be used if you have data sheets, reprints of articles, or letters of endorsement and the like.
- Have another set of eyes (or two) read over your work. They'll be able to highlight issues your mind has grown blind to. There may be issues that you haven't completely addressed or questions you've left open-ended.
- Eliminate jargon and clichés! These make you look lazy and can get in the way of understanding. Don't use a long word when a short word will do just as well.
- Avoid the passive voice whenever possible. Passive voice uses forms of "to be" verbs and can make your meaning unclear. Compare these two sentences: "The window was broken by the zombie" and "The zombie broke the window." In the first, you don't know who broke the window: was it the zombie? Or was the window by the zombie and just happened to also be broken? In the second, you know exactly who did the breaking and why it's important.
- Use strong, direct language and avoid muddling your proposal with qualifiers and extra phrasing. For example, instead of using phrases like "I believe that...," or "this solution may aid...," say, "The plan will significantly reduce poverty rates."
- Any mistakes on your end will make you look less educated and less credible, reducing your likelihood of getting approved.
- Make sure that your formatting is in line with whatever the guidelines require.
- Use language that everyone can understand. Keep to short sentences that are clear and to the point. Thanks Helpful 0 Not Helpful 0
- Any discussion of financial or other resources should be conducted carefully and should present a realistic picture of the expense required. Thanks Helpful 0 Not Helpful 0
- Do not try to use very twisty and tacky words, which are not used in a normal conversation, thinking that it would be useful and impressive. Don't beat around the bush. Go to the main point straight away using simple words. Thanks Helpful 0 Not Helpful 0
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- ↑ https://writing.wisc.edu/handbook/assignments/grants-2/
- ↑ http://www.nsf.gov/pubs/2004/nsf04016/nsf04016.pdf
- ↑ https://libguides.usc.edu/writingguide/academicwriting
- ↑ https://www.northwestern.edu/climb/Research%20Proposal%20Writing/A%20Basic%20Research%20Proposal%20Outline.pdf
- ↑ https://www.ndsu.edu/fileadmin/cfwriters/Graduate_Student_Writing_Resources/GrantOutline.pdf
- ↑ https://library.sacredheart.edu/c.php?g=29803&p=185918
- ↑ https://advice.writing.utoronto.ca/revising/revising-and-editing/
- ↑ https://writingcenter.unc.edu/tips-and-tools/editing-and-proofreading/
About This Article
To write a proposal, start with an introduction that clearly states the purpose of your proposal. Then, explain the problem at hand and why it needs to be solved right now. Go on to detail your proposed solutions to the problem and why you've chosen those solutions. Also, don't forget to include a schedule and budget. To conclude your proposal, briefly summarize the key points you want readers to walk away understanding. For help formatting and outlining your proposal, read the article! Did this summary help you? Yes No
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How To Write A Proposal: Data-backed Best Practices For 2022
Business proposals are sometimes perceived as a necessary evil in sales. Whether you're writing a proposal for a huge new contract or simply pitching to a potential lead, writing sales proposals can be daunting.
After all: with how hard you've worked to get the potential customer to this part of the process, a lot rides on your ability to get them to cross the finish line.
What if we told you that writing a smart, data informed business proposal could be the highlight of your sales process that also helps you to close more deals and increase revenue?
12 min. read
The purpose of this guide is to provide a clear set of rules when it comes to how to draft, format, and implement a successful, stress-free sales proposal.
We'll take a deep-dive into the elements that need to be included, why these elements are essential for success, and how to effectively structure your proposal so that it's easy for your customers to understand their problem, your proposed solution, and make them eager to start doing business with you.
What is a business proposal?
A business proposal is an offer from a seller to a prospective customer. It's a document that outlines the scope of work, costs and deliverables for a project. Unlike estimates and invoices, business proposals are written before any work has started and are used to win new clients. Business proposals can vary; however, there's one thing in common: their purpose is to convince potential customers to buy your products or services.
They can be grouped into two categories:
This is also known as an RFP (Request for Proposal). It's sent in response to a request from an existing customer or when contacting a company you already know. This type of proposal is based on the specifications provided by the client and must include all the information they have requested.
Unsolicited proposals are sent to companies you don't have an established relationship with. This type of proposal is more like a sales pitch as you don't have any specifications to follow. In this case, you need to include as much information about your products or services as possible in order for your potential client to assess whether you're the right fit for them.
Why putting time and effort into your business proposal will pay off
If you've just landed a new prospect, you're likely both excited about the opportunity and wanting to move forward.
A well-crafted business proposal is a step toward landing the deal. A poorly crafted one, on the other hand, might give them reason to take their business elsewhere.
The hardest part of writing a business proposal is making a compelling argument for your work.
You need to show that:
- you clearly understand the client's needs
- you have the right skills and experience to undertake the project
- your ideas are original and fresh
- you have the willpower and determination to follow through on your promises
- you have personality! (Nobody’s here for the boring business stuff)
With the world's information always quick search away, clients want to know why you're the absolute best solution to their problems, and that you're going to be worth investing in.
To ensure that you're always sending out top-quality proposals that will win over clients, use these data-backed best practices for writing business proposals in 2022.
Best Practices: What Should a Project Proposal Include?
A proposal’s structure and flow is like that of a story: it has a beginning, a middle and an end. Just like a good narrative, it is organized and tells a convincing story designed to captivate clients.
Most proposals follow similar patterns, but every proposal will be different depending on the company, industry, deal size, and the product or service in question.
The following sections detail the sections typically found in business proposals as well as explain how to include them.
1. Cover Page
It's hard to judge a book by its cover, but you can guess how well it will sell. A sales proposal cover page that is clean and informative, including the client’s name, your name and contact info, and the date submitted, is key to gaining and keeping a client’s attention. Consider including a table of contents to make it easy for the client to jump to the area they need to review.
2. Executive Summary
The executive summary isn't a brief rehashing of the whole proposal, it is a highlight of the most important elements of your business proposal. The goal is to show the client that you understand their background information, business plan and unique challenges--and that you are just the one to solve them. Pique their interest and give them a reason to continue reading.
For inspiration writing your executive summary, take a look at these three executive summary examples you can steal.
How do you solve your prospects’ problems better than your competitors? How can your company solve customers’ pain in ways that are unique and compelling to your reader? The key to successful proposal writing is to outline the ways in which you provide solutions and make yourself a winning choice.
4. About Us/Our Team
Introduce your leadership team, company founders, and team members who will be working with your new clients on their project. Better yet, show how the members of your team have had success handling similar situations in the past.
The goal of this section is to give your client confidence that they will be working with a competent, professional team and minimize any doubts they might have about hiring you.
Pro Tip: in marketing, it's well known that including real, human photos increases trust with a customer and as a result, higher conversion rates. Apply this insight to your about us/our team section to create a memorable impression with your reader.
The deliverables section of a business proposal is probably the most important section because it outlines exactly what will be delivered for the client.
It’s important to always include this section in your business proposals, as it gives the prospect a clear picture of what you are going to do and how you are going to do it.
The deliverables section should outline details like:
- The scope of the project includes recommendations based on research and analysis.
- What you will provide (content, design, strategy, etc.)
- How you will provide it (online, onsite, etc.)
- When you will provide it (timeline)
- Who will be responsible for what tasks and when they will be performed.
Aim to keep your pricing section succinct and straightforward. Explain how much their total investment is going to cost. List and describe all the project fees, taxes, discounts, and optional extras. If your client has any confusion or concern about hidden extra fees, they'll be more likely to trust you less — leading to a higher chance of rejection.
Highlight any additional costs that may arise during the project lifecycle. Clients tend to be sensitive about extra costs that weren't mentioned in the proposal. The more transparent you are with them, the more likely it is they will trust you and be willing to pay those additional costs if they crop up later on in the project. Make sure this is crystal clear in your business proposal price section so there's no confusion about what's included and what's not included in your pricing
Pro Tip : Instead of referring to your prices as fees or charges, label your pricing section Your Investment. This will remind people they’re making an investment in their own development and that of their team and organization.
7. Terms and Conditions/Sign Off
If you've gotten this far, you're on the home stretch. The closing of a business proposal should be the easiest part of creating it. You already did the hard work in the beginning and throughout, so it's time to wind down and push things over the finish line.
A clean, well-designed page is a great way to close out your proposal with confidence. Just make sure that you include all the necessary information: a place for your new client to esign, clear, up-to-date terms and conditions, and any other last-minute details they may need to review before making your partnership official.
8. Bonus: Case Studies
A case study is an in-depth look at a single example of a success story. It’s typically used to demonstrate how your offering has helped a customer overcome a key challenge they’ve been facing, and how it’s delivered tangible results as a result.
Case studies and testimonials are particularly useful in the closing stages of the deal cycle, when buyers are trying to determine whether or not a proposed solution is right for them. Social proof from a client who’s experienced success with your solution can go a long way in helping get your buyer over the line.
How Should A Business Proposal Look?
Given the high stakes of winning new business, you can’t afford to have a bad looking proposal. You’ve got to make it look good and fast.
Too many people focus on the content and forget about the design. The truth is both are equally important to the success of your proposal.
If you're not designing, you're losing out.
A well-designed proposal with engaging, high-quality images, graphics and video stands out from the competition and quickly communicates value to decision makers. Business proposals that stand out close deals.
Proposals with images close at a higher rate
In Proposify's annual State of Proposals report , we analyzed the data from the 1+ million business proposals sent through our software in 2021.
When it comes to images, the message is clear. Proposals that include images perform significantly better than those without. In fact, project proposals that contained images were 72% more likely to close, and they did so at a 20% faster rate.
If you’re looking for a way to make your proposals shine, adding images can be a real game-changer. They can help catch the attention of your prospect, while also allowing your company to show off its expertise and communicate ideas more effectively.
But which images should you include? Here are some suggestions:
Headshots of your team members:
If you’re offering services, it helps to let the prospect know who they’ll be working with. It also helps build trust — if they know who you are and can put faces to names, they’ll feel like they have an established relationship with you by the time they open the proposal.
Product shots to show off what you sell:
If you’re offering a specific product or service, including photos gives the prospect a better idea of what it entails. Product shots are particularly useful if you’re selling through an online marketplace such as Amazon or Etsy, because customers will already be used to seeing them there.
Images that illustrate your services in action:
For example, if you were pitching for a window cleaning job, showing images of past projects would serve as case studies that would help show off your skills and convince the prospect that you could create something similar for them.
Adding video to proposals increases close rates
Rather than just talking about how a proposal was constructed, proposal videos can show the reasoning behind their pricing. This makes the close much more effective, and greatly helps to close deals.
(Need help with video? Check out Vidyard .)
When your client shares your proposal internally, video makes it easy to have conversations where your voice is always present. Your client will love you because you’re explaining the deal yourself. Decision makers and buying committees will love you because you can demonstrate how you’ll solve their problem in 5 minutes, asynchronously, instead of 30 minutes over a scheduled call.
From Proposify's annual State of Proposals report :
"Video is quickly becoming a critical part of the closing process. In 2021, there was a 40.5% year-over-year increase in the use of proposal video. This is up from a 31% YOY increase in 2020. Despite this increase, however, only 21% of all proposals contain video."
As companies search for creative ways to engage potential buyers, you can capitalize on this strategy now to help your deals stand out.
For inspiration, check out these examples on winning proposal design .
Sales Proposal Follow-Up
The best way to follow up with leads is to use data, not guesswork.
Professional persistence is an important element of good salesmanship—and when done right it can go a long way. A cautious approach and a smart strategy, not to mention personal reliability, will pay off.
How you follow up after sending a proposal is just as important as the proposal itself, and the timing of your follow-up can be the deciding factor in getting a deal closed, so it's important to know when is best to reach out.
You’re more likely to succeed when you reach out with important information based on your prospect’s behavior. For example, if you know that prospects open a proposal an average of five times before they make a decision, build high-importance tasks into your process for reps to follow up on the proposal as soon as it has been opened for a fifth time.
To effectively use your follow-up process, you need to know the baseline metrics of your team. Once you know these numbers, you can identify patterns that indicate a deal may be in trouble and act before you miss your opportunity.
Ready to get started but need some inspiration?
Proposify's free Proposal Templates include everything you need to dominate your brand pitches and win more clients. Included are dozens of business proposal templates for businesses ranging from accounting firms, creative agencies, and architecture firms all the way to individual construction job proposal templates. If there’s a business that does it, there’s likely a template waiting for you inside.
A winning business proposal has a greater chance of success and can be the difference between getting that client, making that sale, or missing out on that opportunity. To get your proposal noticed in a sea of competitors, you need to work at creating a document that is easy and enjoyable to read.
Our best tip? Keep it short and concise, but don’t hesitate to include details in the most relevant sections.
Long story, short: create the proposal that you would be thrilled to get.
How to Structure a Proposal
May 18, 2021
How To Write an Executive Summary
May 20, 2021
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10 Simple Tips to Write a Successful Business Plan In the new book "Write Your Own Business Plan," business expert Eric Butow takes the anxiety and confusion out of planning and offers an easy-to-follow roadmap to success.
By Entrepreneur Staff • Sep 26, 2023
"The absolute biggest business plan mistake you can make is to not plan at all." So writes Noah Parsons in his helpful blog post 17 Key Business Plan Mistakes to Avoid in 2023 . But how does one pull together all of the necessary components of a cohesive plan? It can feel overwhelming.
Eric Butow, CEO of online marketing ROI improvement firm Butow Communications Group, has teamed up with Entrepreneur Media to update the second edition of our best-selling book Write Your Business Plan to provide you with a simple, step-by-step process for creating a successful business plan. In the following excerpt, he gives ten tips to gather all of the critical information you will need to succeed.
1. Know your competition.
You need to name them and point out what makes you different from (and better than) each of them. But do not disparage your competition.
2. Know your audience.
You may need several versions of your business plan. For example, you may need one for bankers or venture capitalists, one for individual investors, and one for companies that may want to do a joint venture with you rather than fund you.
3. Have proof to back up every claim you make.
If you expect to be the leader in your field in six months, you have to say why you think that is. If you say your product will take the market by storm, you have to support this statement with facts. If you say your management team is fully qualified to make the business a success, be sure staff resumes demonstrate their experience.
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4. Be conservative in all financial estimates and projections.
If you feel certain you'll capture 50 percent of the market in the first year, you can say why you think so and hint at what those numbers may be. But make your financial projections more conservative. For example, a 10 percent market share is much more credible.
5. Be realistic with time and resources available.
If you're working with a big company before you buy a business, you may think things will happen faster than they will once you have to buy the supplies, write the checks, and answer the phones yourself. Being overly optimistic with time and resources is a common error entrepreneurs make. Being realistic is important because it lends credibility to your presentation. Always assume things will take 20 percent longer than you anticipated. Therefore, twenty weeks is now twenty-four weeks.
6. Be logical.
Think like a banker and write what they would want to see.
7. Have a strong management team.
Make sure it has good credentials and expertise. Your team members don't have to have worked in the field. However, you need to draw parallels between what they've done and the skills needed to make your venture succeed. Don't have all the skills you need? Consider adding an advisory board of people skilled in your field and include their resumes.
Write Your Own Business Plan is available now at Entrepreneur Bookstore | Barnes & Noble | Amazon
8. Document why your idea will work.
Have others done something similar that was successful? Have you made a prototype? Include all the variables that can have an impact on the result or outcome of your idea. Show why some of the variables don't apply to your situation or explain how you intend to overcome them or make them better.
9. Describe your facilities and location for performing the work.
That includes equipment you use to create your products and/or services. If you'll need to expand, discuss when, where, and why.
10. Discuss payout options for the investors.
Some investors want a hands-on role. Some want to put associates on your board of directors. Some don't want to be involved in day-to-day activities at all. All investors want to know when they can get their money back and at what rate of return. Most want out within three to five years. Provide a brief description of options for investors, or at least mention that you're ready to discuss options with any serious prospect.
To dig deeper, buy Write Your Own Business Plan and get 1 month of free access to business planning software Liveplan Premium.
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What is a business proposal a simple definition for small businesses.
A business proposal is sent from a supplier to a potential client for the purpose of winning a specific project. It is a written document and it can either be requested by the client or sent unsolicited. Many service-based small businesses rely on proposals in order to sell their services and bring in new work, according to Inc. .
In this article, we’ll cover:
What Is a Business Proposal?
What is a business proposal letter.
The definition of a business proposal is a document in writing sent by a supplier to a potential client in hopes of winning a project.
At heart, it is a sales document that includes all the standard information found in similar documents like estimates, bids and quotes.
This standard content includes:
- Scope (what the project does and doesn’t include)
- What the business promises to deliver (services or products)
- Completion date and timelines
But a proposal is more detailed because it’s typically used to win complicated or unique jobs, according to Inc. .
- For example, a proposal might be used to win a complex residential landscaping job. Or a customer wants a marketing firm to provide a detailed report on their target market .
Also, proposals are specific in what they promise—they don’t provide approximate pricing and believed scope like estimates do.
Below is an example of what a proposal template looks like in FreshBooks. This template has many of the key elements that go into the typical proposal.
Requested vs. Unsolicited Proposals
A client may specifically request a proposal. They can ask for one casually in conversation, request one via email or send a formal “request for proposal” (or “RFP”) document.
A RFP specifically outlines what product or services they want and when they want the proposal back. They may also invite the business to offer unique solutions to complete the project.
An RFP means that the potential client is in a buying mood and is actively looking to select a supplier. Your job is to write a proposal that helps them choose you by showing you understand their requirements and can provide unique solutions.
A business can also send a potential client a proposal without the client requesting one. In this sense, a proposal is more like a sales presentation.
- For example, a nutritionist can submit a book proposal to a publisher on the keto diet. The proposal outlines the popularity of the keto diet, the nutritionist’s professional qualifications and previous writing experience and how the book will be different (and better) than existing books about the keto diet.
Ready to create your own business proposal? FreshBooks has cloud-based proposal software that makes creating and sending winning proposals easy.
If you want to learn more first about how to create a business proposal, this article delivers a business proposal outline and format ideas plus proposal templates you can download for free.
A business proposal letter (or “cover letter”) is part of a business proposal, according to Inc. .
A business proposal typically has two parts:
- Cover letter
- Proposal document
A shorter proposal may combine these two parts into a six to eight page document.
A cover letter helps provide context on why you’re sending the attached proposal.
A cover letter (or “transmittal document”) should be brief. One page is ideal, according to the Houston Chronicle . Two pages is the maximum length. After all, the proposal document itself is most important than the cover letter.
A cover letter should also be in standard business letter format and you can write it in first person (using “I”).
A cover letter can include the following content:
- Cite when and under what circumstances the proposal was requested by the client
- Credit anyone who helped prepare the proposal
- A summary of the proposal (an “executive summary”)
- Thank the potential client
- Include your contact information
- Ask the client to contact you with any questions
As for circumstances, you can mention the client’s request for proposal document (RFP) and what date it was sent. Or you can refer to a past conversation where the potential client expressed interest in seeing a proposal about a project.
A cover letter is also useful if the proposal contains any surprises, such as:
- The proposal contains anything different than what was originally agreed upon, such as project scope or cost
- Problems that will affect the project that came to light after your last conversation with the client
FreshBooks lets you attach documents to your proposal, making it easy to include a cover letter and send the entire proposal package to your client.
Looking for a template for your cover letter? Here are a couple samples:
- A simple business letter Word template from MS Office
- A detailed business proposal letter template , you can also download it for Word
- A business proposal letter template for the construction industry
People also ask:
What Is the Difference Between a Proposal and an Estimate?
What is the purpose of a business proposal, what are the types of business proposals.
Proposals and estimates are both sales documents that a business uses to try to win a project. But, proposals are much more detailed than estimates and usually cover more complex projects, according to Inc. .
Proposals also explain the value a company will provide to a potential client and list its past projects or include client testimonials.
Some small businesses use estimates to detail the costs and tasks a project will involve. Then, instead of drawing up a formal proposal they prove their value through other means—usually during a call or on a site visit.
Or the business doesn’t have to prove their value because they have a great reputation and the client is already sure they’re the best fit for the job. Maybe the potential client got a referral from a trusted friend. Or they read good reviews online. In these cases, the job is usually not overly complex or unique.
If a job is complicated or has very specific requirements, more proof is required that a business is the right fit for a job. A proposal is needed to prove that the supplier can provide the right schedule, design, approach, aesthetics and more.
The purpose of a business proposal is to win a new project, often with a new client where there isn’t an established business relationship.
A business’s proposal is often in competition with proposals from competitors. So the purpose of a proposal is also to differentiate you from your competition and demonstrate the value you’ll provide the prospective client.
Value could include demonstrating how you’ll save your prospective client time or money or even help them make more money.
Often testimonials and examples of past projects are included to showcase your reputation and what your business is capable of doing. This type of proof helps build trust with your potential client.
- For example, a construction company could include health and safety documents.
Business proposals have different formats specific to different industries, according to Inc. . Most service-based businesses can follow a general proposal format, though there are exceptions.
- Trades (like electric wiring)
- Architecture and landscaping
Trades will want to find old proposals in their field and copy the format. In landscaping and architecture, a model may be required as well as a visual presentation. Advertising proposals will probably need a presentation as well.
In all the industries listed above, a meeting is usually crucial to make the sale. It also gives the business a chance to deliver their visual presentation. The written business proposal isn’t a key part of their marketing, though it is useful to sum up the presentation (an “executive summary”), reiterate why their company is the best choice for the job and include any important administrative notes.
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10 Game Changing Business Proposal Ideas from Creative Business Owners
- Apr 24, 2023
- 12 min read
- First published on
- Aug 7, 2017
If you’re struggling with your business proposals and are looking to better understand the whole process, this is the blog for you.
We’ve collected ten of the most creative business proposal ideas from some of the best companies around.
T hese ideas will work no matter the types of business you’re in. Use them to inspire you and improve your business proposals.
Whether you’re a small business , a new business or running a big and successful team, a little bit of inspiration could go a long way.
Let’s take a look at our favourite business proposal ideas that can help you improve your business plan.
The comparison checklist from Tony Isgrove
If there’s one industry you wouldn’t think would be at the forefront of proposal design and innovation, it’s probably the Painting and Decorating industry.
However, they understand the importance of visuals and creative expression. It’s safe to say that their business proposals are beautiful and easy to get through.
Tony Isgrove and his team came up with something absolutely genius.
As part of his business proposal idea, he includes a helpful checklist so you can easily compare his painting service to that of anyone else. This is how it looked:
Nothing revolutionary you might think, but this is where he’s so clever. He’s setting the frame.
Now not only is he plugging all the things they do, accreditations they’ve won etc but even if another painter ticks every single box, he would still only be just as good as Tony’s firm.
Absolutely masterful frame control there.
When you include something like this in your business proposal, it elevates your services to a new level.
Not only are you showing your professionalism and authority amongst the competition, but also that you have a great business plan. Make your small business stand out with this genius tip.
“Let’s do this, mate” from Sampath
A simple thing with a deep psychological impact. Sampath, a growth consultant changed an otherwise normal piece of copy on the cover of his business proposal and created an awesome moment.
On covers of documents created with Better Proposals , you can edit the copy of the button from “Read Proposal” to anything you like.
Usually, people just write things like “Open Proposal”, “View Quote” or “Start Reading”. A skilled content or essay writing service provider can help you to write better call-to-action lines.
He builds a fantastic relationship with his clients so this doesn’t seem weird and of course, in the wrong situation, this is terrible advice so tread with caution, but he changed his button name to “Let’s do this, mate”.
It creates a cool “Yeahhhhhhh!” moment and they are few and far between in proposals. Consider what you call the button on your proposal covers.
We urge you to customize your proposals, from the content, down to the call to action.
Our free proposal templates are a great starting point, but you need to show your client that they’re not just a number.
Make sure to use their words when describing the problem at hand. It will show them that you listened. The focus of the proposal should be on the client.
Your business idea is only interesting to them if you show the benefits their company can expect. Whether it’s as simple as – more money or an easier way of attracting investors, or getting involved in the local market, make sure to outline it.
Don’t be afraid to get creative with your business proposal. Do a little social media stalking to find out what your potential clients love and work in into the proposal.
Testimonial on the page with the quote on it from Jigawatt
Jigowatt are a digital agency in the UK that does something that can only be described as sheer brilliance. They aren’t a cheap design agency and their pricing reflects that.
What they do to “soften the blow” to people who might be expecting a lower price is add a testimonial which conveniently touts the ROI of Jigowatt’s services.
Absolute magic. It’s so good that we have completely stolen this business proposal idea for our proposal templates. Here’s how it looks: #SorryNotSorry
All of our free proposal templates come with a pre-designed pricing section. That means that all you have to do is find the best way to price your services. Here’s a handy guide for that.
It’s helpful no matter the type of business you have, whether you freelance, are looking to start a business, run a small business or something else.
Personalised video introduction from Kevin at Blinkered
Kevin at Blinkered does something brilliant with his proposals. He’s a digital strategist based near Glasgow, Scotland.
He’s committed to making each of his proposals as personal as he can so he records a personalised introduction video for each and every client and embeds the video on the executive summary page of his proposal.
Not only does this scream “I want the job” but it shows how ‘on the ball’ he is when it comes to winning new business. I wish more people adopted this approach.
What’s even better is he doesn’t use an iPhone in selfie mode. That wouldn’t be his style.
He gets his entire professional camera gear out in a mini-studio he’s created for himself and shoots it like a high-budget movie. This is all about using your strengths to your advantage.
He has awesome camera gear, and video editing tools, speaks amazingly well and has a studio. He is as professional as he can be and that makes the entire business proposal document elevated, which is why this is such a good idea.
Personalising the cover from Tim
Tim Coe is a marketer and brand strategist from Lymington in Hampshire.
He’s the author of the book ‘Your Utterly Seductive Proposal’ and has been featured on Grant Cardone’s TV show, has done business with a who’s who of business people in the UK and has spoken at every conference worth speaking at.
He takes personalising each proposal seriously but does it in his own way. He personalises each cover depending on the client and project. I love this.
Think about it. It’s the first thing they see so making an amazing first impression is really important. He uses unsplash.com and finds an appropriate picture then uses that as the background cover.
An excellent touch and one you should employ.
It makes his business proposal engaging from the very start. The more you customize your proposals, the better the outcome will be.
Case study idea with a story from templates
Sometimes we get so boxed into pre-existing ideas we forget to step outside the box.
I was on a flight to Barcelona recently to watch the football game and the amazing 6-1 win over PSG, and on the flight, I wrote a new business proposal template .
Only, I was on the plane, and I had no internet so I wrote the content in Pages on my Mac which took me out of “ business proposal writing ” mode and more into a natural flow.
When it came to writing the case study part I for some reason wrote it as if it was a personal introduction.
This is a popular marketing strategy , since providing clients with examples showcases that you’re the right person for the job.
It was a little story of a guy called Jamie, and Jamie oddly enough had the same goals as the imaginary prospect and it only made sense we’d share this story seeing as we helped Jamie achieve all his goals.
Why is this effective? It’s different, it’s reading a success story without your “bullshit filter” on so it actually goes in your brain. Give this a try.
Remember, the trick is to make it super personal and creative. That’s the only way to create a successful case study.
Big coloured block exclaiming the goal of the project
We launched feature blocks in January 2017 and they’ve been used in almost every business template and business proposal that’s been sent since. An absolutely massive hit.
What they’ve been used for most commonly is making a big point of the opening statement on the Introduction page. The trick with this is less in the design and more in the copy.
If someone wants to double their revenue in the next 12 months and that is of paramount importance then something like this will give an epic first impression.
It grabs attention, forces them to take that piece of information in and sets the tone for the rest of the proposal.
When writing your business proposal, make sure to outline the benefits your clients can expect. It makes it more engaging for them.
Letting your client upsell themselves with the optional items in your business proposal ideas
Troy Dean from WP Elevation – they’re one of our Premium Partners, suggests in his WP Elevation Blueprint Course that you should always allow your client to upsell themselves with a few extra add-ons.
It could be a monthly report, extra support, VIP treatment or any number of things but allowing them the chance to increase the deal size by clicking one button is a brilliant touch.
Sometimes, we run into brilliant business proposal ideas and we build them into our templates.
You can see this example in our pricing tables. Here’s how it looks.
If you want to impress your clients with technological brilliance as well as increase the revenue you bring in from each client, look no further than this little beauty.
The fact that it’s web-based , to begin with.
How many times have you asked for a quote or a business proposal and received a tacky, badly designed PDF document with a brief description of the service and a price? Too often?
Sending a web-based business proposal that arrives with a beautiful full-screen cover, well-formatted text and is engaging to browse is far more interesting.
Our unofficial tagline here at Better Proposals is “Death of the PDF”. It’ll never die but we can try and make it obsolete with these amazing proposal ideas.
Benefits of web-based proposals
If you’re wondering about the benefits of web-based proposals, here are just the most popular ones:
Digital signatures, payment integrations, proposal analytics, a simplified follow-up process.
Writing a business proposal from scratch is harrowing work. Luckily, if you’re using Better Proposals, you can rely on our prewritten templates.
They are free for all of our users and help you speed up the proposal-creating process since you don’t have to worry about the proposal structure.
We offer a wide variety of proposal templates. You can easily find the right one for you, whether you’re a:
- small business
- software company
- digital marketing company
- sales team etc.
All of our business proposals are web-based, meaning your clients can easily agree to your terms by typing in their names.
The typed-in name will get turned into a legally binding digital signature.
Furthermore, your clients can pay using your business proposal payment gateways. You can choose between PayPal, Stripe or GoCardless.
The proposal analytics will show you the progress of your business proposal. You will be notified every time they are opened, forwarded, signed and paid.
Moreover, once your business proposal is opened, we’ll notify you how much time the client spent on each of the sections, making your follow-up process easy.
However, if the spent time on your timescales and executive summary, you know how to structure your follow-up email.
When you have an online proposal tool, you can integrate all the other sales and marketing tools like CRMs and more.
It will help you speed up the whole sales process and create proposals that utilize all customer data you’ve collected so far.
When you’re running a small business, every proposal counts.
You can’t afford to lose any potential clients by sending bad proposals. You have to get creative and spend some time on the writing process.
Projections from Tim’s proposal “picture the dream”
Here’s another brilliant business proposal idea from Tim Coe.
If you’re creating a business proposal which contains future projections for your client then consider setting the stage nice and early with those projections.
I’m not suggesting replacing the introduction. You should always have that opening summary, but this could immediately follow.
When utilizing this business idea, you’re hitting them with the main benefit nice and early, and then painting this amazing picture for them sets the frame up perfectly.
Now, everything they read in the rest of the business proposal is understood through the lens of knowing what years 2 and 3 could look like.
A subtle tip here, getting people to “think big” before hitting them with the price is a great way of lowering the impact your price would have.
We’ve collected ten amazing business proposal ideas for you to jazz up your proposals, and make them more engaging and fun to read.
The process of sending your business proposal is of course about doing a good job for the agreed budget, but it’s also about making them feel like you’re the right company for the job.
A great way to do that is to give them an organised, well-formatted document summing everything up. If that is a complete mess, what does it say about your service?
Conversely, what does it say if it blows them away?
I’ll leave you to work out which one you want to be.
The only thing that’s left to do is to sign up for a free trial and fall in love with Better Proposals.
Start sending Better Proposals today
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SIMPLE IRA: What It Is and How It Works
A SIMPLE IRA is a retirement plan that allows the self-employed and small business owners to contribute funds toward their employees savings and that of their own.
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For many small business owners, setting up an employee retirement plan is expensive, complex, and requires federal filing they’d rather not deal with. A SIMPLE IRA is a retirement savings designed for small businesses with 100 or fewer employees. The lower costs and ease of setup make it appealing for small business owners who don’t want to break the bank to provide their employees with a retirement plan.
How does a SIMPLE IRA work?
A SIMPLE IRA offers a tax-deferred savings plan for employees at small businesses and self-employed individuals to save for retirement. SIMPLE is an abbreviation for Savings Incentive Match Plan for Employees.
This type of Individual Retirement Account (IRA) makes it optional for employees to contribute to their retirement savings while requiring employers to match their contributions or contribute a mandatory percentage to employee accounts.
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How does it work?
Under a SIMPLE IRA, employees and employers contribute funds to the employee’s retirement account. Employee participation is optional. Whether your workers participate or not, employers still contribute to their retirement accounts.
Employers choose between matching employee contributions by up to 3% (and no less than 1%) or making a mandatory contribution of 2%. From the start, employees are 100% vested in the SIMPLE IRA, meaning all of the contributions made to the account belong to them.
If you’re interested in providing a SIMPLE plan for your small business, self-employment, or sole proprietorship, you’ll need to fill out one of two forms with the IRS– Form 5304-SIMPLE or Form 5305-SIMPLE . This depends on whether you want to choose a financial institution for all employee plans (Form 5305) or if you want employees to choose their own bank or financial institution (Form 5304).
2023 contribution limits
The contribution limits on a SIMPLE IRA are lower than other retirement savings plans. That means your employees won’t be able to save as aggressively as they would with other retirement plans, which could be a disadvantage. In 2023, SIMPLE IRA contributions are limited to $15,500. If you have employees aged 50 and older, they’re eligible to make an added catch-up contribution of $3,500 to a SIMPLE IRA.
For perspective, a 401(k) retirement plan has contribution limits of $22,500 in 2023, plus a $7,500 catch-up contribution limit. Under a 401(k) plan, employees under 50 years old could save a maximum of up to $7,000 more through their contributions than with a SIMPLE IRA. Employees 50 and older could save up to $12,000 more under a 401(k) plan.
The barriers to entry for a SIMPLE IRA are lower than other retirement plans, making it ideal for a budding small business that’s cautious of added costs. Is a SIMPLE IRA the right choice for your business? Let’s break down the pros and cons of this retirement plan.
SIMPLE IRA pros
- 100% Vested: Employees are 100% vested from the start. All contributions to the retirement account belong to them and can be taken with them if they change jobs.
- Tax Credit: Employers with 51 to 100 employees receive a tax credit under the SECURE Act, which is 50% of the administrative costs of setting up a retirement plan for employees. Employers with 50 or fewer employees could receive a tax credit of 100% of the administrative costs under the SECURE 2.0 Act.
- No filing requirement: There’s no filing requirement under this savings plan which makes maintenance easier.
- Contribute to other plans: Employees can still contribute to retirement plans with other employees or on their own.
- Lower set-up costs: Compared to other retirement plans, the SIMPLE IRA costs less to set up and maintain. Under financial institutions like Merrill Edge and Fidelity, there are no setup or maintenance fees.
SIMPLE IRA cons
- Lower contribution limits: SIMPLE IRAs restrict your employees’ tax-deferred contributions by up to $12,000 vs a 401(k) plan.
- No loans: If an employee needs money from their SIMPLE plan, there’s no option for a loan, unlike other retirement plans. Instead, they might have to do an early withdrawal, which carries heavy tax penalties and could put them significantly behind on retirement.
- Strict Rollover Rules: If an employee leaves the company and tries to roll over their balance, they have limited options. Rolling over to a Roth IRA, Traditional IRA, or 403(b) account carries a 25% penalty if they don’t meet the two-year waiting period . Otherwise, their only choice is another SIMPLE IRA.
- No other retirement plan: Employers who adopt the SIMPLE plan can’t have another retirement plan option for their employees.
Should I choose a SIMPLE IRA?
Choosing a SIMPLE IRA could allow your employees to save for retirement with tax-deferred earnings while you support their savings goals through a matching contribution. It's easier to set up and maintain compared to other employer-offered retirement accounts and even costs less. However, employees who want to save aggressively for retirement might be disappointed by the lower contribution limits. Still, it’s a great option for employers who don’t want the heavy maintenance, filing requirements, and costs associated with other retirement plans.
- Solo 401(k) vs. SEP IRA vs. SIMPLE IRA
- IRA and 401(k) Contribution Limits for 2023
- Retirement Planning for the Self-Employed: 5 Options
Seychelle is a seasoned financial professional turned personal finance writer. She’s passionate about empowering people to make smart financial decisions by combining 10 years of finance industry experience with solid research and a wealth of knowledge. Seychelle is also a Nav-certified credit and lending expert who has explored money topics such as debt consolidation, budgeting, credit, and lending in her work for publications including GOBankingRates, LendEDU, and Credible.
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A Shutdown Is Looming. What Comes Next?
Many federal agencies have plans in place to weather a shutdown, but a disruption would still affect critical government services.
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By Zach Montague
Reporting from Washington
Follow our live updates for a potential government shutdown .
The House of Representatives on Friday rejected a late bid by Speaker Kevin McCarthy to keep the government open past this weekend as more than 20 hard-right Republicans joined Democrats in voting down a stopgap funding bill.
With the midnight Saturday deadline to avert a shutdown approaching, the White House reiterated warnings to federal agencies to prepare for a shutdown, and scores of government employees scrambled to plan how to do their jobs next week while many colleagues are furloughed or halt their work altogether for the time being.
The United States has experienced 21 gaps in government funding since 1976, leading to varying degrees of disruption. Under a worst-case scenario, the White House is wary of a repeat of 2018, the longest and most recent shutdown, which sidelined roughly 800,000 of the federal government’s 2.1 million employees for 34 days.
While much remains uncertain about how long the coming shutdown might last, the broad contours of how it would play out are well-worn territory in Washington, and most agencies have readied plans for working through the tumult.
What exactly would be shut down?
A government shutdown amounts to a suspension of many government operations until Congress acts to restore funding.
For hundreds of thousands of federal employees, that means either being furloughed while the government is closed, or continuing to work without pay.
For the public, that typically means dealing with interruptions to a variety of government services and facing a range of disruptions to daily life.
In recent days, the White House has spotlighted several government programs that could cause more severe issues if suspended, in particular the nutrition and immunization assistance given out through the Special Supplemental Nutrition Program for Women, Infants and Children. If funding lapses, the White House has said nearly seven million women and children could lose critical access to food, and the federal contingency fund to keep the program running could run dry within days.
“If we have a shutdown, WIC shuts down, and that means the nutrition assistance to those moms and young children shuts down,” Tom Vilsack, the agriculture secretary, told reporters on Monday.
Closures of national parks and museums are often one of the most visible impacts of a shutdown for the public, as well. In some cases, they can produce significant losses for the communities that depend on tourism.
Gov. Katie Hobbs of Arizona, for instance, has vowed to draw on revenue from the Arizona Lottery to keep Grand Canyon National Park open. In 2021, the park drew more than 4.5 million visitors to the state, according to the National Park Service.
Even many workers in the private sector are often forced to adjust.
During the most recent shutdown, inspections of chemical factories, power plants and water treatment plants ground to a halt as the Environmental Protection Agency furloughed thousands of workers. The Food and Drug Administration also paused routine food safety inspections of seafood, fruits and vegetables, putting extra pressure on restaurants and grocers.
In addition, many government labs and research projects are frequently closed during prolonged shutdowns, hampering scientific work.
As the deadline to fund the government approaches, the White House has sought to stress the sheer variety of programs and services that would suffer while blaming House Republicans for the standoff.
“A government shutdown could impact everything from food safety to cancer research to Head Start programs for children,” President Biden said on Saturday .
What services would continue?
Many agencies whose employees carry out critical services do not suspend operations.
That includes a large number of federal prosecutors and investigators, postal workers and Transportation Security Administration employees.
Most of those employees will continue to work without pay until funding is restored. In rare cases, some may work in positions that are funded outside the annual appropriations process.
Benefits such as Medicare and Social Security also continue uninterrupted because they are authorized by Congress in separate laws that do not need to be renewed every year. Medical care of veterans also goes on unaffected.
But even in instances where federal workers may stay on the job, planning and operations supporting them can be suspended, making the work harder.
For instance, while air traffic controllers would largely continue to work, training for new staff members would cease, exacerbating shortages .
Who decides which workers are essential?
Having weathered multiple shutdowns already, most agencies have in place detailed contingency plans for determining which employees should keep working.
But those plans can vary widely.
According to its contingency plan , the Department of Health and Human Services plans to retain about 58 percent of its employees during a shutdown, while the Justice Department would direct closer to 85 percent of its employees to continue working.
The determinations for each agency are often based on workers’ roles and how precisely their jobs are deemed “necessary to protect life and property.”
Shutdowns have become so commonplace in Washington that the Office of Management and Budget publishes guidance for federal employees on what to expect when one is approaching.
Do members of Congress still get paid?
In Article I, Section 6 of the Constitution, compensation for members of Congress is differentiated from that of most federal workers.
“The senators and representatives shall receive a compensation for their services, to be ascertained by law, and paid out of the Treasury of the United States,” that section reads.
In addition, the language of the 27th Amendment, which prohibits any law “varying the compensation for the services of the senators and representatives” until the next election, is often interpreted as a constitutional requirement that lawmakers be paid on time.
Salaries for members of Congress are funded by a permanent appropriations account that does not require renewal every year.
Like federal agencies, lawmakers also have some limited discretion to keep staff members working in cases where their role is directly tied to human health and safety. This typically applies only to staff members whose work is “required to support Congress with its constitutional responsibilities or those necessary to protect life and property,” according to the Congressional Research Service .
Will furloughed employees eventually be paid?
Furloughed employees will receive back pay once Congress passes and the president signs a new appropriations bill or a continuing resolution, a guarantee enshrined in 2019 when Congress passed the Government Employee Fair Treatment Act .
Employees who worked overtime or earned other premium pay can typically also claim those extra wages once the shutdown ends.
For contractors, including many cleaners, maintenance workers and cafeteria workers, however, the situation is more precarious.
Federal contractors are not guaranteed back pay under the 2019 law, even though some who are deemed essential might still be required to work. In some cases , contractors may be unable to return to their workplace while federal sites are closed.
In most situations in which contract workers are furloughed or unable to work during a shutdown, however, many are entitled to unemployment compensation.
Zach Montague is based in Washington. He covers breaking news and developments around the district. More about Zach Montague
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UAW vs. the Detroit Big 3 automakers
Why the uaw is fighting so hard for these 4 key demands in the auto strike.
The UAW's hard bargain in ongoing negotiations with the Big Three automakers is being driven by concessions the union made in 2007. Auto workers have felt the impact of those concessions to this day. Sarah Rice/Getty Images hide caption
The UAW's hard bargain in ongoing negotiations with the Big Three automakers is being driven by concessions the union made in 2007. Auto workers have felt the impact of those concessions to this day.
Even United Auto Workers president Shawn Fain admits the union's demands in its ongoing strike against the Big Three automakers are "audacious."
From demands for wage increases of around 40% to cost of living protections, the UAW is drawing a hard bargain in its negotiations with General Motors, Ford and Stellantis — and many autoworkers strongly believe it's what they deserve.
UAW has a unique strike strategy. It keeps Detroit Big 3 automakers guessing
After launching a strike at three auto plants last week, Fain is threatening to expand the walkout unless the automakers offer substantially better deals than what's currently on the table.
The automakers are adamant the wage and benefits demands from the union would put them at a competitive disadvantage, especially as the industry navigates the transition to electric vehicles.
But from the UAW's perspective, the current demands represent a long-overdue redressal for all the concessions the union made to prop up the automakers just before and after the 2008 recession — concessions workers still feel to this day.
Here's a look at four of the UAW's key demands.
Wage increases of about 40%
Wages are, for obvious reasons, the biggest sticking point in ongoing talks for a contract.
The UAW is pushing for a roughly 40% general wage increase for its members, over the length of a four-year contract, pointing to automakers' recent profits. Collectively, the three companies posted a profit of $21 billion in just the first half of this year.
So far, the companies have offered pay raises of approximately 20% — a jump from their opening bids, but still only half of what the union sees as adequate.
The pay hike demands are being driven in part by the success other unions, including at UPS and American Airlines, have had in getting similar increases this year.
A worker on a Ford F-150 Lightning truck under production at the automaker's Rouge Electric Vehicle Center in Dearborn, Mich., on Sept. 20, 2022. Automakers argue they can't meet the UAW contract demands because it would make them too uncompetitive, especially as they transition to electric vehicles. Jeff Kowalsky/AFP via Getty Images hide caption
A worker on a Ford F-150 Lightning truck under production at the automaker's Rouge Electric Vehicle Center in Dearborn, Mich., on Sept. 20, 2022. Automakers argue they can't meet the UAW contract demands because it would make them too uncompetitive, especially as they transition to electric vehicles.
But for autoworkers, it's also personal. The contract UAW negotiated in 2007 included a freeze in base wages for workers over the length of the four-year agreement.
As a result, the average hourly wage for workers manufacturing motor vehicles and parts has dropped by more than 20% in the past two decades when adjusted for inflation, according to data from the Bureau of Labor Statistics.
Another dynamic driving the UAW's wage asks? Skyrocketing CEO pay.
General Motors CEO Mary Barra, the highest-paid chief executive among the Big Three, made nearly $29 million in 2022. Securities and Exchange Commission filings show that this is 362 times the median GM employee's paycheck.
"Obviously, CEOs should be the highest-paid person in an enterprise," says Economic Policy Institute Chief Economist Josh Bivens. "But the question is, how much higher than everyone else?"
Reinstating cost of living protections
Autoworkers also gave up cost-of-living-adjustments, or COLA, as part of the concessions to automakers during the 2008 financial crisis.
The UAW is now pushing for a reinstatement of cost of living protections, to ensure wages keep up with inflation over the course of the next contract.
The old COLA formula, according to Professor Harry Katz of Cornell's School of Industrial and Labor Relations, provided workers with roughly 90% protection against inflation.
UAW members picket outside a Jeep plant in Toledo, Ohio, on Sept. 18, 2023. Cost-of-living-adjustments have become another major point of contention between automakers and the union. Sarah Rice/Getty Images hide caption
UAW members picket outside a Jeep plant in Toledo, Ohio, on Sept. 18, 2023. Cost-of-living-adjustments have become another major point of contention between automakers and the union.
So, for example, had auto workers still had COLA in their contracts in the summer of 2022 when inflation hit 9%, they would have seen an increase close to that in their base pay based on COLA alone.
"They're asking for two things: they want payback for the loss of real income they suffered because they didn't have a COLA clause over the last several years, and then they want future protection for future inflation," Katz said.
How Shawn Fain, an unlikely and outspoken president, led the UAW to strike
The automakers have put COLA proposals on the table. But Fain has called the companies' offers deficient saying they don't meaningfully protect against inflation.
"That's not COLA. That's not even diet COLA. That's Coke Zero," Fain quipped earlier this month.
Ending the two-tier system for wages and benefits
A handful of the UAW's demands are intended to level the playing field for new hires — in terms of wages, health care and retiree benefits.
Since the 2007 union concessions, new workers have been paid less than veteran employees to do the same job.
In 2019, the companies agreed to an eight-year progression scheme, meaning a new hire can eventually work their way up to the same pay as their colleagues, over the course of those eight years.
Now, the UAW is pushing for a 90-day progression to the top rate, which Michigan State University professor Peter Berg said would virtually eliminate the tiered wage system.
Trump to skip second GOP debate and head to Detroit to court autoworkers instead
The companies have countered with an offer for a four-year progression to the top rate.
Health care and pensions are also wrapped into the UAW's fight to eliminate tiers. Concessions right before the financial crisis placed new hires in a lower tier for health are and pensions, while existing workers kept their benefits, said Kate Bronfenbrenner of Cornell University's School of Industrial and Labor Relations.
"Companies are doing this despite research that shows two-tier is harmful for the company and workers," Bronfenbrenner says, pointing to the effects of the tiers on worker morale.
The UAW has referenced the Teamsters union's success in eliminating some tiers at UPS this year in arguing that the Big Three automakers can do the same.
UAW President Shawn Fain marches with UAW members through downtown Detroit as the union strikes against the Big Three auto makers on Sept. 15, 2023. Currently new workers are being paid less than veteran employees, creating a tiered system that the UAW would like to end. Bill Pugliano/Getty Images hide caption
UAW President Shawn Fain marches with UAW members through downtown Detroit as the union strikes against the Big Three auto makers on Sept. 15, 2023. Currently new workers are being paid less than veteran employees, creating a tiered system that the UAW would like to end.
Job security in the EV transition
Looming over the UAW's negotiations this year is the transition to electric vehicles — an industry-wide shift that, from the union's perspective, underscores the need for strong protections for workers, including when existing plants are shut down to shift production to EVs.
The union wants a guaranteed right to strike over plant closures and some form of compensation in the event of a shutdown of the plant.
"It's a demand that takes an adversarial approach to the future of the industry," Berg, of Michigan State University, said, referring to the use of a strike as leverage.
However, the companies argue they need to have the flexibility to shut down or move operations. They've already pointed to the high cost of EV transition to explain painful cuts, like when Stellantis — the parent company of Chrysler — shut down a plant in Belvidere, Ill., citing the high cost of the EV transition.
Bronfenbrenner, of Cornell, said employers often use the threat of a closure to weaken union bargaining demands and prevent organizing, which she said can have a "chilling effect" on union activity.
Stellantis says they have made an offer to the UAW that includes a "strong future" for Belvidere without specifying.
The company has also demanded the unilateral right to close and sell 18 facilities, including assembly plants and parts depots, according to the UAW.
That's not something the UAW is willing to accept.
"Unions want to be able to use their one weapon of strikes," Bronfenbrenner said.
Andrea Hsu and Camila Domonoske contributed reporting.
- United Auto Workers
- General Motors