2What is a Business Proposal Persuasive written report offeringTo provide a serviceTo sell a productTo find a solution to a problem or needTwo types:Solicited formal proposalUnsolicited formal proposal
3Business ProposalThey range from casual, one-page memos to multiple-volume, lengthy reports that are hundreds of pages long.
4Proposals Solicited - Sent to funder in response to request Funder – agency, business, foundation that finances projectsRFP – request for proposalRFI – request for informationCFP – commercial request for proposalUnsolicited - Sent without request or invitation
5Proposal Checklist What do I propose to do? Can I do it? How do I propose to do it?Is this possible or feasible?What evidence can I introduce to demonstrate that what I propose to do will actually get the desired results?
6Proposal Checklist How much will it cost me to do the task? How much shall I charge to perform the task?What evidence must I show to convince the reader that this cost is acceptable?Is my time schedule appropriate?
7Proposal ChecklistWhat evidence can I use to convince my reader that my way is the best way to obtain the desired results?How can I show my ability to do what I propose to do?
8Characteristics of a Proposal Proposals deal with the futureProposals must convince the reader that there is a problemProposals must convince the reader that the writer is the best person to fix the problemProposals are often legally binding offers
9To Convince the Reader Proposals must be persuasive. Proposals must convince your reader that they will get benefits from your proposal.Proposals must show that you arecapable of fulfilling your promise
11The Opening ParagraphConvince the reader that there is a problem at the beginning of the proposalConvince the reader that the solutions you are proposing is urgently needed
12The Body Paragraphs Should suggest a practical solution to the problem Describe the solution in detailExplain the approach you will adoptTell about the expertise, qualifications and the personal you will use.Describe the equipment you will useGive the cost breakdown
13The Closing ParagraphReconfirm that the proposal will solve the problemRepeat that you have confidence that you can carry out the planDiscussion of the plan could be face to face with the readerAdditional information could be given
14Introduction of the Capital Appropriations Proposal A proposal committing a large sum of moneyIntroduction should provide all the background information needed to make a decisionIntroduction should briefly describe feasibility study that has been conducted.
15Body of the Capital Appropriations Proposal Briefly describe the item to be purchasedAlternative choices you have consideredLife expectancy of the itemThe specific products, services or projects to be supported by the itemExpected return on investmentLatest feasible date of acquisition
17External Proposals Vary in length and format More formal manuscript Same components as a formal reportVery persuasive documentProvide details of your credentialsUsually has supplementary partsOccasionally contain an appendix
18Copy of the RFP and Letter of Transmittal Request for proposalLetter or memo issued by a company or government agency that invites competing companies to bid for a jobLarge companies and government agencies may have more than one circulatingLetter of transmittal – sometimes called the cover letter.
19The Opening Paragraph Refer to the RFP Tell why you are submitting the proposalProposals must convince the reader that there is a problemProposals must convince the reader that the writer is the best person to fix the problem
20The Body Paragraphs Describe what you are offering Focus on the strengths of products or serviceDisclose enough information to convince the clientDescribe how you will carry out the workGive dates when portions will be finishedMethods and resources you will use
21BodyProvide information about the people in charge of implementing the work planSupporting staffCredentials, expertise, and qualificationsBudget Most importantUses more numbers than wordsCan get the proposal accepted or rejectedBudget carefullyprovide the information as accurately as possible.Breakdown the costs in detail
22The Closing Paragraph Last chance to persuade Review what you have saidRestate the merits of the proposal brieflyStress your company’s strong pointsEmphasize the benefitsSound assertive, assuring and confident
23Poor Business Proposals Too little information - Submitting just a company brochure with a price quote.* Poor writing - Pleasing to look at, but, after the first read-through, boring to read.* Lack of marketing focus - Trying to be everything to everyone, but being nothing to no one.* Too general and self-centered - Focusing on the company instead of addressing the prospect's needs and desires.* Done too quickly - Offering trivial solutions and canned material instead of ideas that get results.* No "sell" - Presenting just information rather than a persuasive argument for the company.
25DefinitionDocument that can convince the reader that the business can produce enough revenue to make a satisfactory profit and therefore attractive as an investment opportunity
26What is a Business Plan? Define goals Determine objectives to reach goalsAssess resources and make decisionsCreate contingency plans for managing changesRationally assess operational feasibility and financial viabilityWhy should you take the time and go through all the trouble of writing a business plan?It forces you to look at the business in a critical manner. A strong reality check!!!!helps you to focus and serves as a feasibility studyit can serve as an operational report and define current conditions and future possibilitiesIt can be a good communicational tool that shows your management team, competition and business purpose.Justifies financial projectionsIt is for all of these reasons that the owner of the business should write the plan. Get help from a consultant but you need to do the work.
27Reasons for Writing a Plan To serve as the guide you will follow throughout the life of your businessAll lenders and investors require a business planA business plan is the key to conducting business in the international marketplace
28Business Plan Characteristics Persuade potential investors to investAllows readers to assess the profitability and goals of the new ventureProvide employees with guidance and directionConvince suppliers and customers that the new venture is promisingClarify the objectives of the new ventureCreate strategic alliances with other business partners
29The Planning Process What are the parts of a Business Plan? Cover SheetTable of ContentsExecutive SummaryPart 1: Organizational PlanPart 2: Marketing PlanPart 3: Financial DocumentsPart 4: Supporting Documents
30Title Page (cover page) Business name, address, and phone numberDate the plan was preparedConfidentiality statementOwner's name, address, phone number, web address,
31Table of ContentsList major sections of the plan and the page number where each section can be found.This page cannot be prepared until the plan is finished.
32Executive Summary (prepared last) Describe the business structure, purpose, and goalsDescribe your products / services and production process?What is your overall marketing strategy, and who will be/are your customers?Who will be/is in the business, and how is it managed?What are the skills of each member of themanagement team?What is the amount and terms of needed financing and what will it be used for? How will loans be repaid?
33The Company Profile The two major topics of the company section: Organization and ManagementProducts or services
34(The Company) Organization and Management Briefly mention what the business purpose is and what you provide to the customerIdentify the legal structure of your businessSole proprietorshipPartnershipCorporationLLC
35Organization and Management Describe your own experiences, skills, qualifications and education that will ensure the success of the business.Personnel ManagementBookkeepingInventory controlCustomer serviceAdvertisingWork historyProfessional membership
36(The Company) Organization and Management Identify your teamHow many employees are needed?Organizational chartMethods of compensationHours to be workedRequired skillsJob descriptionsSpecialistsAdvisors
37The MarketThe two major items for this section of the business plan are:IndustryMarketing Plan
38Part II: Marketing Plan Overview & Goals of Your Marketing StrategyMarket Analysis:Target Market, Competition, Industry TrendsMarketing Strategy: ProductDistribution, Packaging, Pricing, Branding,Database Marketing, Sales Strategies,Promotions, Advertising Strategies,Public Relations, NetworkingCustomer ServiceImplementation of StrategyAssessment of Marketing Effectiveness
39(The Market) Marketing plan sections CompetitionCustomersStrategies to meet sales goalsMarket research
41(The Market) Marketing plan- sales strategies What is the selling price of the product or service? How was this determined?QualityCompetition *Service providedLocationYour business costs *Perceived value to customerWhat the market will allow *Profit
42(The Market) Marketing plan- sales strategies Promotional activities are determined by your target customersAdvertising – newspaper, radio, TV, yellow pages, billboards, direct mail, flyers, posters, business cards, website, etc..Sales promotions –samples, reduced prices, coupons and contests.Publicity –feature stories, public relations, trade shows, networking, organizationsHow will you let your potential customers know you are in business.
43The Financial Plan Major sections include: Financial Projections Income statementsBalance sheetCash flowAssumptionsSources and usesBreak even analysisContingent liabilities
44AssumptionsSpell out conditions assumed when compiling financial statementsSales volumePricing structureAverage sales amountNumber of customersSeasonal trendsSpecific expensesOwner’s draw/salaryGrowth rate
47Supporting Documents Personal resumes Personal financial statement Supporting documentationMarket researchBusiness documentsPromotional materialsLetters of supportProprietary protectionPrevious income tax returns