What is a Business Proposal? Definition & Best Practices

What is a business proposal Definition & Best Practices

December 9, 2020


8 Min Read

Businesses need clients to drive sales. But how do you get new clients?

Business proposals are a great way a business can gain trust and potentially win over a new client.

If you’ve ever wondered what is a business proposal, this post will highlight the key features you need to know!

If you do this poorly, your potential client will remain just that (a potential client), and your competitor will win out. However, if you do it well, you might just persuade the client to purchase your solution over your competitors.

In this article, we will talk about what a business proposal is, when and why you might use one and share some tips to structure powerful business proposals that win new business.

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What is a Business Proposal?

A business proposal is a presentation of your solution to a client’s problem, and usually this presented in a written document. 

Typically, your sales team will write a proposal to cover the off your understanding of the client’s problem, your solution, the details of the product or service, and of course, the associated costs.

A business proposal’s purpose is to list the pain points of a potential customer and present solutions to relieve those pain points – this is critical. It is essential to keep the needs of the customer in mind and avoid a pushy ‘salesy’ approach.

Types of Business Proposals

Businesses and business owners approach their clients in various ways. Sometimes companies do their research on potential clients and create solutions to present to these clients. Other times, a client might reach out to the business to buy their products or services directly.

With this in mind, there are two common types of business proposals: solicited or unsolicited proposals. We’ll touch on the differences between these two below. 

Unsolicited Business Proposals

For an unsolicited business proposal, you’d be sending your business proposal to prospective clients that you think might be interested in buying your product.

For example, if you sell cloud security services, a bank can be considered your potential client. Banks require a high level of online security to help their businesses run safely and smoothly.

Now if you go ahead and pitch a proposal to a certain bank without their having asked you to do so, this will be considered an unsolicited business proposal.

Solicited Business Proposals

Solicited business proposals are the exact opposite of unsolicited proposals. When a client shows interest in your business and requests a quote, proposal, or detailing of your services, this is then considered a solicited business proposal.

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What is an RFx?

The question around what an “RFQ”,  “RFP”, “RFI”, or other RFx’s comes up often. So what on earth is an “RFx”?

RFx (Request for, “x”) generally refers to a kind of proposal document from a potential customer. The ‘x’ can be a Request for Information (RFI), Request for Quote (RFQ), or Request for Proposal (RFP) among other terms – but these are definitely the most common.

When a client reaches out to you with a solicited business proposal, they could ask for one of these depending on what they require at that time. Here is a quick sneak peek into what these terms mean.


Refers to a document that a customer sends out to gather information about a business’s products and services. For instance, in case of a bank, if the bank is not aware of what cloud security services entail, they will send out a fact-finding document to request information about the vendor’s range of services.


RFQ documents are written to request a quote of the services the buyer is looking for. The customer will usually include a table listing all the features they are looking for and ask for pricing of those features.


RFP documents list the problems or pain points of a company and will request the vendor to create proposed solutions for those problems. A customer will usually ask for an RFP after an RFI.

It is important to note that the above RFx’s, are generally for big business and in the SME sector it is much more common that a client will just ask you directly for a quote, or proposed solution to their problem. 

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Why do You Need a Business Proposal?

A business proposal is the first step towards securing potential clients. It gives an overview of your products and services to the customer and helps them make an informed decision.

A strong business proposal will help you secure long-term clients and grow your company. Here are some of the reasons why you need a business proposal when dealing with prospective clients.


A properly crafted proposal that lists all your products and services and includes the pain points will provide the customer with all the necessary information that they can then take the time to make an informed decision. 

Beat your competitors

When you send a proposal to a client, remember that a dozen other competitors might also have reached out to them or are planning to reach out. Your proposal is not the only one they are looking at. Your potential client will only be choosing the one proposal that aligns best with their business goals. The best course of action is to reach out to your clients earlier than your competitors. Another important factor to consider is to create powerful proposals that truly speak to your client and provide value to their business.

Establish trust and commitment

When you write genuine proposals where you truly want to help your client’s business, they will see the sincerity in your approach. No one likes sales-y and pushy style of selling products. Make sure to establish a connection with your client, the trust will follow. A good proposal can be the key to securing long-term clients for your business.

Provide solutions

The primary purpose of a proposal is to provide solutions to your clients. Remember that a written proposal is at times more effective than a verbal proposal. Written documents are available at all times to reference and go back to. Your potential clients will come up with questions and ask about your specific services in detail or ask for clarifications and it’s great to be able to refer back to a written document.

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Difference between a Quote and a Proposal

What is a proposal?

Proposals, as discussed before, provide an insight into the pain points and solutions to a client’s problem. You will provide a proposal to a customer when they are not fully aware of your services and want you to detail a solution to their problem in depth.

Proposals can be short or detailed depending on what the client is looking for. The aim is to always try to go the extra mile to ensure the client picks you over your competitors.

What is a quote?

A quote is the fixed price for a project (or product) to be completed/delivered in a specific period of time. It is provided in response to a request for a service. If your potential client wants to proceed with your solutions or just wants to know the estimated cost of the project, they will request a quote.

Once you provide a quote, they will get back to you with a yes or no. If the client accepts the quote, then you must provide the services as listed in the quote and you may wish to move forward with a proposal at this point in time to further clarify the services. This will depend on your business workflow.

Always include relevant details of all the services and provide a price for each service. In this way, you will have everything documented to reference to when providing the services.

Proposal Structure

How to Structure a Business Proposal

The world is competitive out there! When writing proposals for your prospective clients, you want to make sure every important detail is covered in the proposals properly. Put yourself in the shoes of your client and aim to include all the information that you think they will find useful to make an informed decision.

Structuring a proposal comes part and parcel in the process of creating a business proposal. Most types of proposals follow a generic format, however, you can also check out some business proposal templates online to get an idea. Better still, you could use Proposal Software, which has proposal templates included to help you get started straight away.

Below is a quick reference to how to structure a business proposal.

Cover page

A cover or title page will include your company’s name and the name of the sales manager/engineer submitting the proposal. It will also include the name of the person receiving the proposal on the client’s side. Make sure to include the date of proposal submission. You can also choose to add a cover letter to your proposal. It should be brief and to the point.

Remember to choose one font style for your whole document.

Table of contents

Adding a table of contents provides a great reference for the reader to be able to go through different sections of the proposal. A table of contents section will also make your proposal look professional and more user friendly. 


The crux of your proposal will go in the body section. Here you will list the executive summary which will include the 5Ws (What, When, Who, Why, Where) and 1H (How). An executive summary provides a quick insight into why your solution is right for the client. Make the executive summary persuasive and reflective of your company and its services.

The next thing that you need to include in the body section is the problem statement and solution. You will describe the problem at hand that the customer is facing and explain how your solution will help solve or alleviate that problem.

Another important thing to mention in the body of your proposal is the cost associated with the solution. You need to be upfront about the possible costs that your services entail. Some customers might want a customised solution plan, make sure to give them estimated costs for such plans.

The last thing you should include in the body is the legal policies or terms and conditions associated with your company. Bring everything out in the open to avoid any legal problems in future.


End strong! In the conclusion paragraph, you will reiterate why your solution is the most appropriate one out there to solve the customer’s problem. Create a call to action by requesting a phone call or in-person meeting to discuss the next steps or to answer any questions that the client may have.

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Final Thoughts

Business proposals are gateways to winning prospective clients and developing a successful business. With the cutthroat competition out there, you want to ensure all your ducks are in a row at all times. When a customer asks for a proposal, put extra thought and effort into it to get the best results. Sloppily created documentation will definitely decrease your chances of being seen and considered.

Incorporate all the essential elements of a proposal, have open communication with your prospective client and be professional in all your dealings.

Get out there and create some stunning and powerful proposals for your clients!

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