How to create business proposals. The most complete practical guide
Making your proposal tell a laconic yet comprehensive and well-founded story will leave your prospect no choice but to conclude they won’t find anyone better than you for the job.
Making your proposal tell a laconic yet comprehensive and well-founded story will leave your prospect no choice but to conclude they won’t find anyone better than you for the job.
Obviously, there is no silver bullet — the approach that will get you a win every time. However, there are many aspects worth your attention as you are working on a proposal. Addressing them will help optimize your investment and increase chances of success.
Drawing on my experience, I’ve come up with the guide touching on these 7 topics, elaborated on further on:
- Ruthlessly assess the opportunity before hitting the ground running
- Mind the structure
- Consider hygiene factors
- Respect common courtesy
- Personalize & empathize
- Consider it a groundwork for productive business relationship
- Qualify before sending it out
It can take dozens of hours to respond to an opportunity in full. More often than not, responding implies a multi-step process that involves several calls, emails, and 2–3 rounds of proposals.
Unfortunately, the investment doesn’t always pay off, and return can fall far below the desirable.
Not all the opportunities are ‘born equal’ and have equal potential for success. Brutally honest assessment whether an opportunity is worth chasing is imperative.
1. Ruthlessly assess the opportunity before hitting the ground running
Before diving headlong into the proposal, consider the following points:
- Account value.
Is this a strategic account for you? Will responding give you visibility and access to further business down the line? Will it even be worth winning the contract/Will it be profitable if you win?
Have you done similar projects before? Do you have references to show for them? Do you know enough about the industry/niche? Does the prospect fit into your target market? Do you know enough to address their needs and help them reach the desired outcomes?
- Win probability.
Have you done any successful business with this prospect until date? Do you have an established relationship with the prospect? What has your past success rate been for similar businesses? Do you know the criteria your proposal, services, and expertise will be evaluated on and do you have a match here? Are you likely to be the most qualified bidder, or this just a long shot?
- What’s the opportunity cost? Understand the value of opportunities foregone to pursue this one.
- What’s the bidding cost? Strive to minimize the proposal effort, as it sucks resources from other activities, both operational and sales and often requires involvement of senior-level subject matter experts.
- Time & expertise.
Do you have time and expertise to respond and to serve? Isn’t the timeframe too tight to result in a rushed job and a half-assed response?
And here are some traps to avoid:
- Following a low-cost bid strategy for small projects and slim profit margins.
- Taking on the opportunity because ‘we don’t have anything else better to do’.
You do. You can go prospect, work to commercialize the products built in-house, improve internal operational efficiency and do lots of other things, both inbound and outbound, to improve overall market position and well-being of your organization.
- Always prioritizing large projects first.
While large projects always look attractive at first, ensure to compare the investment to respond (the bigger the project, the higher the investment) with the win probability.
- Creating the proposal without knowing the decision makers.
Try to reach the actual decision maker(s) or, if not possible, at least know who they are and profile them carefully to better understand their needs and expectations. This will allow you to create a custom-tailored proposal and thereby increase the chances of winning.
- Shooting to win a prospect that is not serious about moving forward with the project.
Ensure they’ve secured funding, know their goals and the impact they want to create for the business.
- Ignoring the red flags indicating the client might be the j̶e̶r̶k̶ trouble.
Do they have past outsourcing experience? How was it? Why did they part ways with their other vendors? What did (did not) they like in their past vendors?
Are they changing their current vendor, why?
What’s their rating & reviews on Glassdoor and similar resources?
Are they trying to get as much as possible details from you while pushing the bid to the bottom? Are they pushing you to work overtime, on weekends/holidays, in non-working hours?
Are they chaotic in communications (suddenly disappear and then get back out of the blue, always late to the meetings or move/skip them, etc.)?
So, you decided to jump right in and take on the opportunity. Where should you start with your proposal? It’s the structure.
2. Mind the structure
“I can’t wait to cozy up by the fire with a good business proposal”
- No one ever
A really cool sarcastic saying I‘ve once heard or read elsewhere that points it out that proposals are not, never have, and never will be a reading for pleasure.
It’s a business writing, which presumes a high concentration of valuable information that is set up for easy comprehension.
Thinking of the proposal as of a one-on-one conversation with your prospect where your goal is to convince them you’re the best for the job can help you get there.
You would very likely want to start that conversation with reassuring them you understand their needs inside out, then explain your approach and suggest a solution (or a couple of alternatives), emphasize its benefits to the business, back up your words with a proof of your qualifications to follow through and deliver that solution, and finally get to the size of investment needed and the terms of potential cooperation.
Essentially, despite the components of a proposal can vary based on the request specifics (prospect’s business maturity, industry, regulatory compliance, articulated constraints, and etc.), there are these four things that a prospect is looking for to glean from the proposal:
- Your deep understanding of the business need.
Include some research or refer to related experience you have had with a similar project.
- Your approach to addressing the need (your best solution).
Offer up a strategy for solving the problem. Include benefits of the approach/solution to the business, pros & cons, deliverables, any impediments/risks/challenges, other alternatives that you’ve considered.
Anticipate the prospect’s questions, and take them through the process of delivery, so they know what they’re signing on for when they hire you.
- Proof of your qualifications.
Include case studies of client success stories, add client testimonials, mention any relevant awards and accreditations.
- Cost & Terms.
Provide and explain your pricing. You might as well provide three pricing options: what can be achieved as a minimal solution to the problem, what can be done with the prospect’s available budget, what can be done for more than their budget.
Apart from the four pillars mentioned above, I’d recommend giving attention to these points:
- Unless your proposal is very, very brief, include a table of contents.
Create a clickable one, so that a prospect can easily revisit sections without having to navigate through multiple slides.
- Set the scene for the proposal with an executive summary.
Concise, persuasive, and focused on the benefits of your offer, compelling enough to grab the reader’s attention right away and make them want to keep reading. Also, it should outline your offer and have all the information a prospects needs to make the decision on whether to accept or reject the proposal.
Include a summary of what you and the client are agreeing to if they accept your proposal: engagement model, conditions of effective collaboration, etc.
- Show off the potential team.
Make your potential new client feel confident that they’re hiring the best by highlighting the relevant experience and strength of key people that might be working on the project.
- Suggest an action path/next steps.
Use an opportunity to keep a two-way line of communication open. While the prospect will be taking their time to think your offer through, you’d want to ensure it’s easy for them to touch base with you and pick up where you left off.
There are tricky teeny-weeny things that are often not given enough attention while they can drastically damage the impression of your company in the eyes of the prospect. These are hygiene factors.
3. Consider hygiene factors
Hygiene factors — characteristics that, when adequately addressed, don’t cause either satisfaction or dissatisfaction. However, when they’re left unaddressed, dissatisfaction is imminent.
Here are some tips that help:
- Create a slide deck rather than a long-text document.
Slide decks are best for presenting an idea/a topic/a standpoint to an audience to inform, persuade, inspire, build an alignment and get a buy-in. The format of presentation encourages you to tell a coherent and concise story in a very focused manner.
- Send your slide deck out to the prospect in a .pdf format.
It’s highly portable and compatible (no issues with missing fonts, images, screwed formatting, and etc.), considered a standard and a sign of professionalism.
- Use corporate design template.
Be classy. Dressing up a proposal in a corporate template, brand typography and colors is very much like making it ‘wear a uniform’ and carries the exact same benefits:
- It puts company’s branding at the forefront of the client’s mind creating a connection which the client can identify with, as well as remember.
- It sets the company apart from competitors in the market space.
- A branded proposal instils a sense of trust and credibility in the company and its abilities.
- Use only high-quality graphics that relates closely with your point.
Make sure graphics reinforces and complements it and doesn’t cause distraction.
Try to use the same style graphical image throughout the presentation.
- Don’t mix the languages.
All the content should be in one language, be it a text or a diagram.
- Copy-paste with care.
Your proposal must be tailor-made for a specific prospect. An ill-fitting, off-the-rack things will not do.
- Clearly label each slide.
- Make sure text is large enough to read.
- Don’t use ALL CAPS except for titles.
- Use bullet points instead of sentences whenever applicable.
- Use plain, positive, and lively language.
- Avoid abbreviations, acronyms, and jargon.
- Use hyperlinks rather than plain links. Ensure all of them work and lead where they are supposed to.
- Eliminate typos and spelling errors. Proofread your proposal before sending it.
- Keep the design clean and uncluttered. Leave empty space around the text and graphical images.
4. Respect common courtesy
Don’t think of it as a nice wrapping, but as of a powerful, though often undervalued, tool for building a strong relationship with your prospecting client.
- Use the client’s language as much as possible. Their terminology, not yours.
- Be genuine: nothing is more annoying than a form letter.
- Consider cultural specifics. Consult the sales team or other qualified colleagues, scrap the Internet — the main idea is to avert the apparent diplomatic slip-ups.
- Avoid playing off your perspective/opinion against the prospect’s as well as demonstrably pointing at the prospect’s mistakes. Instead, gently express your concerns in a professional manner, show the risks/potential pitfalls and suggest well-founded alternatives. Appeal to the benefits of those alternatives from the business standpoint.
- Don’t be pushy and don’t patronize. Don’t insist, but rather recommend and provision strong arguments. Always leave the choice up to the prospect.
- Respond on time. Timing is everything in business, and submitting a proposal on time also signals the prospect that you can complete the assignment you are vying for in the time frame expected.
- The proposal is not a stand-alone activity. It’s a step in the sales process and should be a continuation of previous conversations you’ve had with a prospect.
Ensure it smoothly blends in your dialog and provisions consistent experience to the prospect.
- Should you be drawing your proposal on any conditions, terms, approaches and etc. agreed with a prospect separately (on a call, via email, etc.), outside of RFP statement, neatly fit them in the context for justification and transparency reasons. Don’t assume they’ll remember everything and keep it all in their head when reading through your porposal.
- Reply to the initial request first, and elaborate on your alternative idea after.
- Save details about who your company is until the end. Rather than starting with who you are, focus more on the client and their problems than your company and its background.
- Don’t use disguised or fake names, no-name logos or image placeholders instead of profile pictures when talking about the potential team members or your other clients (in case studies or testimonials sections). It looks disrespectful to the prospect and might demonstrate distrust of yours or fire back to you, showing you are not trustworthy. Play open and show you are proud of the people you work with and of the clients and products you’re referring to.
- Wrap it up by suggesting a follow-up call or meeting. So that not only you get an additional opportunity to pitch yourself, but show it to a prospect that you are happy to continue the dialog and stand ready to answer any questions they might get and explain in detail whatever interests them.
It’s like saying “Looking forward to seeing you again soon!” to a person before leaving.
5. Personalize & empathize
We all like it when we’re called by name, given personalized invitations to events, provided services tailored to our individual needs and preferences. We like to be special. We like to be taken care of, feel heard and understood. So do our prospects and clients.
Custom tailoring and empathy could be what makes your offer stand out in the pile of boilerplate proposals sitting on the prospect’s desk.
- Know your audience: research the prospect beyond the words in their RFP (Request for Proposal).
What information is available on their company online? Look for strategic plans, financial reports, check recent news. What is a priority for them now, what challenges are they facing?
Try to figure out how the project fits into their overall business strategy, understand the prospect’s intention for the project. What are their immediate business needs and critical pain points, the gains they are trying to achieve?
Build your story upon these, and craft a unique value proposition that will deeply resonate with that specific prospect.
- Reach out to decision makers.
Sometimes the person asking for a proposal is not the decision maker. You need to find out who is and what makes them tick.
Find out about their role, background, the resources they have, their values, main concerns, and definite deal breakers. Do your best to understand how you can specifically help them with your product and seamlessly weave this knowledge in the proposal. Design your arguments specifically for them.
- Craft your writing so the prospect comes first.
Don’t put the ‘about us’ stuff at the beginning, neither start with your own ideas and your ‘better alternative to the initial request’.
Think about it: if you’re the prospect with a need, what are your expectations from the proposal? What information do you expect to find in there first? Generally, this would be a direct response to the raised questions, the approach to tackling the challenge, and the cost. Next come the alternatives, pros & cons, risks/impediments/concerns, etc. and the ‘about us’ makes the compelling last line.
Sure, your prospect wants to know who you are and why you’re deserving of their business, but mostly they want to read about how you’re going to deliver on the promises you made.
- Include reminders of your interactions: conversations, experiences and value that you have brought to the process by now.
Provide the continuous experience, show the prospect you’ve listened carefully, and make the proposal feel like smooth and logical continuation of your dialogue.
- Throughout the proposal, use the prospect’s language as much as possible.
This makes it easier for them to digest the information and shows that you can easily get on their wavelength.
People, on the whole, are emotional decision makers. So when it comes down to hiring you or your competitor with similar qualifications, the prospect will likely decide based on who they like more.
Use empathy and personalization to fuel the connection. And if something in your proposal doesn’t relate back to the prospect, either delete or rewrite it so that it does.
6. Consider it a groundwork for productive business relationship
Relationships are a two-way street, where the traffic rules are established as a result of joint effort of both parties — your company and the client.
With each client, strive to build a comfortable, transparent, and trustful relationship, such that can only exist between true partners. It matters that your position is respected, your voice is heard, and that your contribution is valued. And here are a few steps we can take towards achieving that desired state, while at the stage of creating and negotiating a business proposal.
- Be visionary.
Start with where the prospect’s idea/product is now, what the vision of the future could be, and picture the journey to make that vision a reality with you.
This demonstrates your intent for long-going business relationship, interest in the product (idea) to have a future, and the ability to create that future.
- Bring challenges to the surface.
If you see the challenges on the way of implementing the prospect’s vision, your prospect is likely aware of them too.
Touching on them in your proposal along with the action plan will show your understanding of the business environment and genuine willingness and readiness to overcome them.
- Show your business acumen.
Tailor the range and the scope of services in your offering to specifics of the prospect’s business need. Stick with the whole product concept, and draw a straight line from their problem to the solution.
- Don’t fear admitting vulnerabilities in your suggested approach.
If you know there are vulnerabilities, some of the readers of your proposal might spot them too. In the best case, they will get back to you and ask directly or, in the worst case scenario, they might think you’ve hidden those vulnerabilities deliberately. So rather than disguising the weaknesses of the approach (if any), face them head-on and suggest a strong mitigating action. This will definitely contribute to establishing trustful and transparent relationship.
- Focus on value over price.
Hook up the prospect with the value that you are going to create and deliver, make them want to buy from you prior to hitting them with the price of your services. You won’t then have to defend the pricing (which might as well create an additional tension), since all the justification will be right there, served in advance.
- Keep commitments.
Be punctual and respond rather sooner than later. Ensure addressing all the open concerns, answering all the open questions, and providing all the requested material.
- Articulate the rules of the game.
Clearly present and explain the terms of engagement (pricing, engagement model, payment schedule, liability of the parties, etc.). This will minimize chances for the prospect to misinterpret them, as well as encourage open and informed negotiations.
- Go extra mile but not a dozen of extra miles.
To win an opportunity, sometimes it costs working overtime (on weekends, holidays) and writing late-night emails. However, make sure the prospect clearly gets it that sacrificing yourself is not your lifestyle, neither it’s a corporate culture.
If you are partners, then you are partners. Respect each other’s right to recreation and avoid keeping each other under the pressure and in stress.
7. Qualify before sending it out
To increase chances for a proposal to resonate with the client, crystallize the story being told and the message being conveyed, don’t do it all by yourself.
Neither it helps piecing a proposal together from the blocks created by different people and sending it out without a through review and validation.
Instead, beta-test your proposal with the colleagues who have the most appropriate qualifications and are customer-facing by the nature of their job. Collect and analyze the received feedback, then plant the findings back into the proposal. Iterate as needed.
To act as a united front in the eyes of the client, and to speak to them with one voice through all the channels, reach an alignment with the sales team on the key points of proposal, desired outcomes, and possible tradeoffs. Work on the cover letter and the further course of action together.
A proposal is just one, though very important, step in the buying process of your company’s products & services.
Focus on building an offer that would allow to satisfy your business & professional interest to the fullest extent through creation of desired impact for the business of the prospect.
An in-depth knowledge of the prospect’s profile, the environment their business lives & breathes in, understanding of their real goals and needs, aligned with the interest of your company, will help reveal the untapped opportunities, come up with a smart value proposition, derive the most effective strategy towards approaching that prospect, and set the right tone for the relationship to follow.