Comparison Between Business Proposal and Business Plan
Conducting a comparison between business proposal and business plan enables you to highlight the differences between the two.3 min read
Conducting a comparison between business proposal and business plan enables you to highlight the differences between the two. Business plans are documents detailing how owners want to set up their business, their goals and objectives, and the processes and methods required to achieve these goals.
Understanding the Features of a Business Plan
A business plan is a document that describes in detail how your business is set up, the vision of the company, and the methods and process for realizing business goals.
A comprehensive business plan should provide detail on your:
- Products and services.
- Business structure.
- Marketing strategy and market research.
- Budgetary expenses.
- Financial projections for the next five years.
Benefits of Drafting a Business Plan
Although developing a business plan takes a lot of research, planning, and calculation, it is well worth it. Drafting a business plan is a good idea for existing businesses and startups alike.
The reflection and time spent while creating your business plan will clarify your business ideas, providing you with insights into aspects of your business that you may not have considered and helping you strategize.
A well-written business plan is a blueprint for success because it outlines all the steps required to move your business from the ideation stage to reality.
However, not all business plans are meant to be executed. You could discover during the research stage that your business idea isn't right for implementation. Realizing this earlier on means you can save yourself time and money that you would have invested into a dead-end idea.
Before trying to raise funds for a business loan through an angel investor, incubator, or venture capitalist, ensure that you have a thoroughly researched your business plan. Developing a well-researched business plan should take approximately six weeks, so writing your plan a day before meeting with a potential investor won't cut it.
Your business plan should serve two purposes:
- To provide suppliers and investors with information about the viability of a business.
- To keep an accurate record of business goals and the steps required to achieve them.
The following is a sample structure you can use to prepare your business plan:
- Executive Summary.
- Business Description.
- Market Analysis & Strategies.
- Design and Development Plan.
- Management and Organization.
- Service/Product Line.
- Sales and Marketing.
- Funding Requests.
- Financial Projection.
What is a Business Proposal?
Business proposals are documents proposing a business arrangement between you and another enterprise. The two main categories are:
When large corporations or the government want to purchase products or services from private suppliers, they usually post a public tender inviting contractors to submit a bid. The winning bid will be selected from those submitted by interested contractors.
Some organizations may also send RFPs (Request for Proposals) to select businesses that they are considering as potential suppliers. In this instance, you will compete against a handful of pre-selected contractors. Usually, the client provides a Bidding document stipulating the categories of information to be detailed as well as the style and type of proposal they expect from interested contractors.
If the Bidding document is not available, it is up to the contractors to decide what style of proposal to present.
Companies that respond to a call for tender or an RFP are competing with other enterprises similar to theirs. As such, they must present themselves in the best possible light to win the bid.
Unlike invited proposals where the clients expect a bid for a product or service they need, an uninvited proposal is sent to solicit a business arrangement. You may have an idea for a product or service that will be beneficial to Company X and you have the ability to provide the service/product.
To indicate your interest in undertaking business dealings with Company X, you send an uninvited proposal stating your intentions to form a business relationship.
The company may or may not be open to your proposal; however, if it is interested, you don't have to worry about competing with other bidders.
To boost your chances of your non-invited proposal being accepted, you must market both your concept and your company. You must convince the prospective client of the value of the product or service as well as the stability and credibility of your company.
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