Presentation on theme: "Business Proposals and Business Plans. What is a Business Proposal Persuasive written report offering To provide a service To provide a service To sell."— Presentation transcript:
Business Proposals and Business Plans
What is a Business Proposal Persuasive written report offering To provide a service To provide a service To sell a product To sell a product To find a solution to a problem or need To find a solution to a problem or need Two types: Solicited formal proposal Solicited formal proposal Unsolicited formal proposal Unsolicited formal proposal
Business Proposal They range from casual, one-page memos to multiple-volume, lengthy reports that are hundreds of pages long. They range from casual, one-page memos to multiple-volume, lengthy reports that are hundreds of pages long.
Proposals Solicited - Sent to funder in response to request Funder – agency, business, foundation that finances projects Funder – agency, business, foundation that finances projects RFP – request for proposal RFP – request for proposal RFI – request for information RFI – request for information CFP – commercial request for proposal CFP – commercial request for proposal Unsolicited - Sent without request or invitation
Proposal 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?
Proposal 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?
What 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? Proposal Checklist
Characteristics of a Proposal Proposals deal with the future Proposals must convince the reader that there is a problem Proposals must convince the reader that the writer is the best person to fix the problem Proposals are often legally binding offers
To 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 are capable of fulfilling your promise
INTERNAL BUSINESS PROPOSALS
The Opening Paragraph Convince the reader that there is a problem at the beginning of the proposal Convince the reader that the solutions you are proposing is urgently needed
The Body Paragraphs Should suggest a practical solution to the problem Describe the solution in detail Explain the approach you will adopt Tell about the expertise, qualifications and the personal you will use. Describe the equipment you will use Give the cost breakdown
The Closing Paragraph Reconfirm that the proposal will solve the problem Repeat that you have confidence that you can carry out the plan Discussion of the plan could be face to face with the reader Additional information could be given
Introduction of the Capital Appropriations Proposal A proposal committing a large sum of money Introduction should provide all the background information needed to make a decision Introduction should briefly describe feasibility study that has been conducted.
Body of the Capital Appropriations Proposal Briefly describe the item to be purchased Alternative choices you have considered Life expectancy of the item The specific products, services or projects to be supported by the item Expected return on investment Latest feasible date of acquisition
EXTERNAL BUSINESS PROPOSALS
External Proposals Vary in length and format More formal manuscript Same components as a formal report Very persuasive document Provide details of your credentials Usually has supplementary parts Occasionally contain an appendix
Copy of the RFP and Letter of Transmittal Request for proposal Request for proposal Letter or memo issued by a company or government agency that invites competing companies to bid for a job Letter or memo issued by a company or government agency that invites competing companies to bid for a job Large companies and government agencies may have more than one circulating Large companies and government agencies may have more than one circulating Letter of transmittal – sometimes called the cover letter. Letter of transmittal – sometimes called the cover letter.
The Opening Paragraph Refer to the RFP Tell why you are submitting the proposal Proposals must convince the reader that there is a problem Proposals must convince the reader that the writer is the best person to fix the problem
The Body Paragraphs Describe what you are offering Focus on the strengths of products or service Disclose enough information to convince the client Describe how you will carry out the work Give dates when portions will be finished Methods and resources you will use
Body Provide information about the people in charge of implementing the work plan Supporting staff Supporting staff Credentials, expertise, and qualifications Credentials, expertise, and qualifications Budget Most important Uses more numbers than words Uses more numbers than words Can get the proposal accepted or rejected Can get the proposal accepted or rejected Budget carefully Budget carefully provide the information as accurately as possible. provide the information as accurately as possible. Breakdown the costs in detail Breakdown the costs in detail
The Closing Paragraph Last chance to persuade Review what you have said Restate the merits of the proposal briefly Stress your company’s strong points Emphasize the benefits Sound assertive, assuring and confident
Poor 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.
Definition Document that can convince the reader that the business can produce enough revenue to make a satisfactory profit and therefore attractive as an investment opportunity
What is a Business Plan? Define goals Determine objectives to reach goals Assess resources and make decisions Create contingency plans for managing changes Rationally assess operational feasibility and financial viability
Reasons for Writing a Plan To serve as the guide you will follow throughout the life of your business All lenders and investors require a business plan A business plan is the key to conducting business in the international marketplace
Business Plan Characteristics Persuade potential investors to invest Allows readers to assess the profitability and goals of the new venture Provide employees with guidance and direction Convince suppliers and customers that the new venture is promising Clarify the objectives of the new venture Create strategic alliances with other business partners
The Planning Process What are the parts of a Business Plan? What are the parts of a Business Plan? l Cover Sheet l Table of Contents l Executive Summary l Part 1: Organizational Plan l Part 2: Marketing Plan l Part 3: Financial Documents l Part 4: Supporting Documents
Title Page (cover page) Business name, address, and phone number Date the plan was prepared Confidentiality statement Owner's name, address, phone number, web address,
Table of Contents List 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.
Executive Summary (prepared last) Describe the business structure, purpose, and goals Describe the business structure, purpose, and goals Describe your products / services and production process? Describe your products / services and production process? What is your overall marketing strategy, and who will be/are your customers? 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? Who will be/is in the business, and how is it managed? What are the skills of each member of the What are the skills of each member of the management team? management team? What is the amount and terms of needed financing and what will it be used for? How will loans be repaid? What is the amount and terms of needed financing and what will it be used for? How will loans be repaid?
The Company Profile The two major topics of the company section: Organization and Management Products or services
(The Company) Organization and Management Briefly mention what the business purpose is and what you provide to the customer Identify the legal structure of your business Sole proprietorship Sole proprietorship Partnership Partnership Corporation Corporation LLC LLC
Organization and Management Describe your own experiences, skills, qualifications and education that will ensure the success of the business. Personnel Management Personnel Management Bookkeeping Bookkeeping Inventory control Inventory control Customer service Customer service Advertising Advertising Work history Work history Professional membership Professional membership
(The Company) Organization and Management Identify your team How many employees are needed? How many employees are needed? Organizational chart Organizational chart Methods of compensation Methods of compensation Hours to be worked Hours to be worked Required skills Required skills Job descriptions Job descriptionsSpecialistsAdvisors
The Market The two major items for this section of the business plan are: The two major items for this section of the business plan are:Industry Marketing Plan
Part II: Marketing Plan Overview & Goals of Your Marketing Strategy Market Analysis: Target Market, Competition, Industry Trends Target Market, Competition, Industry Trends Marketing Strategy: Product Distribution, Packaging, Pricing, Branding, Distribution, Packaging, Pricing, Branding, Database Marketing, Sales Strategies, Database Marketing, Sales Strategies, Promotions, Advertising Strategies, Promotions, Advertising Strategies, Public Relations, Networking Public Relations, Networking Customer Service Customer Service Implementation of Strategy Implementation of Strategy Assessment of Marketing Effectiveness Assessment of Marketing Effectiveness
(The Market) Marketing plan sections Competition Competition Customers Customers Strategies to meet sales goals Strategies to meet sales goals Market research Market research
(The Market) Marketing plan- customers Who?What?When?Where?Why?How?
(The Market) Marketing plan- sales strategies (The Market) Marketing plan- sales strategies What is the selling price of the product or service? How was this determined? Quality Quality Competition * Competition * Service provided Service provided Location Location Your business costs * Your business costs * Perceived value to customer Perceived value to customer What the market will allow * What the market will allow * Profit Profit
(The Market) Marketing plan- sales strategies Promotional activities are determined by your target customers Advertising – newspaper, radio, TV, yellow pages, billboards, direct mail, flyers, posters, business cards, website, etc.. Advertising – newspaper, radio, TV, yellow pages, billboards, direct mail, flyers, posters, business cards, website, etc.. Sales promotions –samples, reduced prices, coupons and contests. Sales promotions –samples, reduced prices, coupons and contests. Publicity –feature stories, public relations, trade shows, networking, organizations Publicity –feature stories, public relations, trade shows, networking, organizations
The Financial Plan Major sections include: Financial Projections Income statements Income statements Balance sheet Balance sheet Cash flow Cash flowAssumptions Sources and uses Break even analysis Contingent liabilities
Assumptions Spell out conditions assumed when compiling financial statements Sales volume Sales volume Pricing structure Pricing structure Average sales amount Average sales amount Number of customers Number of customers Seasonal trends Seasonal trends Specific expenses Specific expenses Owner’s draw/salary Owner’s draw/salary Growth rate Growth rate
Sample Sources and Uses Statement
SAMPLE CASH FLOW STATEMENT
Supporting Documents Personal resumes Personal financial statement Supporting documentation Market research Market research Business documents Business documents Promotional materials Promotional materials Letters of support Letters of support Proprietary protection Proprietary protection Previous income tax returns Previous income tax returns