Capital strength must frequently underpin the viability of an enterprise. Unfortunately, not all businessmen and entrepreneurs have sufficient capital. For this purpose, a business proposal may be submitted to acquire additional capital, such as through investment.
Writing a business proposal requires deliberation. Not just any proposal is admissible. For the business proposal to be interesting to potential investors, it needs to show how the business compares to others in its field.
Then, how should an ideal business proposal appear? We’ve got it all covered! Continue reading to learn everything about business proposals, from their definition to their advantages.
Also read: 14 Business Goals and Objectives Entrepreneurs Should Know
What is a Business Proposal?
A business proposal is a document with data that gives an overview of how a business works and how it plans to get things done. All operational aspects are discussed, including the business’s name, funding, and history, as well as its strengths and weaknesses.
A good business proposal should be easy to understand for the intended recipient. Therefore, complex explanations should be avoided when composing a business proposal. This proposal should serve as a means of communication between the business owner and the intended recipient, painting a clear picture of the business.
A business proposal can help business owners think more critically and objectively, as well as understand the competitive economy, financial analysis, and possible sources of capital needed to grow the business.
Also read: Successful Young Indonesian Entrepreneurs Starting a Business from Scratch
Business Proposal Benefits
Business Proposal Benefits Illustration (source: Freepik).
After understanding what a business proposal is and what it means, business owners need to know what it can do for them. Several benefits of a business proposal are listed below:
1. Develop business
If the business plan is well-written and catches the attention of investors, the business will be able to get the money it needs to grow. The money that comes in can be used to improve many aspects of the business, such as making the highest-quality products and hiring the most talented people.
2. Understanding the industry trends
When a business proposal is written, it helps business actors better comprehend the industry in which they compete because everything is stated in a structured format. A business proposal can include a review of the competition in the market, marketing plans, and other information that will help the business stand on solid ground.
3. Assist in business evaluation
A business proposal is useful for identifying business gaps. The proposal makes it simple to evaluate a variety of factors, including marketing strategies, product quality, the business’s relevance to market trends, as well as capital-related issues.
Also read: What is an Entrepreneur? The Definition, Objectives, Examples
The Purpose of Writing a Business Proposal
When writing a business proposal, entrepreneurs or business actors must have specific objectives that are not limited to capital-related concerns. When creating business proposals, entrepreneurs typically have the following objectives in mind:
1. Attracting donors and investors
Capital is often a problem for business owners because they often don’t plan for a lack of money, losses, or sudden changes in their industry. So, in order to get money, business actors usually send business proposals to donors and investors.
2. See business feasibility
Sometimes, business actors do not recognize their company’s strengths and weaknesses until they write a proposal. This facilitates the modification of planned strategies during the process.
So, the business plan acts as a safety net to make sure that all the plans don’t change too much. The good news is that there will be opportunities to make necessary adjustments during execution.
Using the business proposal, business actors can gain a better understanding of their companies’ position relative to other companies in comparable industries and determine whether or not their business is competitive enough to compete on the market.
3. Simplify business planning
Even though money is often seen as the most important part of starting a business, it needs to be backed up by a well-written business plan. Without a good business plan, the company’s capital will run out quickly, and it will be more likely to lose money.
With a business proposal, business actors can more easily plan production, distribution, and sales strategies, as well as capital allocation. The business can operate and survive with efficient capital utilization if it is well planned.
Also read: What is Business Ethics and Why is It Important?
Pay Attention to These When Creating a Business Proposal!
How to write Business Proposal (source: Freepik).
As previously stated, business proposals should be crafted with care. When making a business proposal, there are a lot of things to think about to make sure the results are good and help get the results you want.
Continue reading to learn everything you must consider when writing a business proposal!
Business Proposal Content
Content is the first consideration when writing a business proposal. To get donors or investors interested, the proposal must include a well-thought-out business plan and a sharp analysis. The following items must be included in a business proposal:
1. Business profile
According to author David McCullough, “you cannot love what you know little about.” This was applicable to interactions between individuals, companies, and prospective investors. The party providing funding will want to be apprised of the offered business beforehand.
This profile includes the business’s history, prospects, benefits, anticipated problems, and proposed solutions.
2. Product specifications
It is essential to include the product or service’s specifications in the business’s proposal. Include more details about the product, such as its type, size, function, features, quantity, and anything else you think is important.
Investors should also think about an overview of what customers want and need, the resources that are needed, an overview of the competition in the market, and the buying power of customers.
3. Market competition
Before starting a business, entrepreneurs must think about the market, including market segments, marketing strategies, target customers, and pricing policies.
Most business actors aim for more than one type of market, such as a perfectly competitive market, a monopoly market, an oligopoly market, a monopsony market, or a monopolistic market.
4. Business competition
Lastly, business actors must include a map of business competition. The business plan must explain where the company stands in the market and where its competitors stand. It is also beneficial to include strategies for winning the competition.
Find out where the company is on the market map: leaders, challengers, followers, or market opportunists.
5. Financial reports
In the business proposal, financial statements are required. The income statement, balance sheet, break-even point (BEP) analysis, and sources of capital make up the data. Startups’ business plans include plans for getting more money, making money, and paying for things.
6. Business and HR management
Also, business owners must be able to explain in detail the business’s ownership, role, capital structure, and legal status, whether it is a corporation, partnership, individual, limited liability company (LLC), or another type of business structure.
It will be useful for HR to know the number of employees, their names, their positions, and their educational backgrounds.
7. Attachment
Finally, an appendix must be placed at the end of the proposal. Here, business actors can attach a copy or scan of the business permits, deed of establishment, company domicile certificates, and other supporting documents.
Also read: The Importance of Business Incubators for Entrepreneurs
Business Proposal Writing Structure
Now that you know what must be included in the proposal, you must learn how to write one. Following is the structure of a business proposal:
- • Introduction
- • Profile, location, classification, and organizational structure of the business
- • Company products
- • Manufacture of products, including materials, tools, and manufacturing processes
- • Product advantages
- • Target market and marketing strategy
- • Finance and profit-sharing details
- • Conclusion
- • Attachments such as financial reports and company legal documents
Understanding what a business proposal is and what it can do for you will hopefully help business people who want to grow their business by attracting investors.
We hope that entrepreneurs who read this article will be able to easily follow the steps and make business proposals that are convincing. If you have written a business proposal, you can also send it directly to Alpha JWC online to find funding opportunities. Simple, wouldn’t you say?
