Many clients require a written proposal before they’ll consider your business.
Writing this document requires a tricky balance of hype and professionalism. You need to promote your business, yet keep the details honest and straightforward. Mastering the art of business proposal writing builds trust with your clients, while also expanding your business and driving more sales.
This guide explains how to write a business proposal in 5 easy steps. Chiming in along the way will be Andy Freivogel, who has written hundreds of business proposals as a retail tech consultant and small business owner.
You’ll also want to check out our free business proposal template that will help you get started. If you want to learn about how this process can be made smoother and faster with business proposal software like PandaDoc, check out our guide here.
Step 1: Get Your Timing Right
When a hot business opportunity becomes available, you may feel pressure to get your proposal sent over as soon as possible. While you certainly want to send it sooner than later, taking some time to learn about the client and project first will help you craft a proposal that’s more likely to be accepted.
According to Andy, a simple rule of thumb is to send it after your first meeting. Include a personal note that acts as a follow up: “Hey it was great connecting the other day…”, then attach your proposal.
There are exceptions to this rule. For example, if a business has multiple offices/locations, you may need to visit more of them before you can accurately assess the project. In this scenario, timing requires the right balance: You don’t want to send a proposal prematurely – especially if you can’t accurately estimate costs – but you also don’t want to provide too much free labor.
As we’ll explain more below, one solution is to include caveats. These will allow you to send your proposals quickly, while also protecting you from unexpected turns the project may take.
Step 2: Outline the Scope of the Project
Before you start typing out the proposal itself, take a moment to reflect on the project. Answer the “who, what, where, how, when, and why.”
- Who: who will do the work, who will manage the work, who does the customer call if there is a problem, who is responsible for what?
- What: what needs to be done/delivered, what will be required to do it, what can the customer expect, what will it cost?
- Where: where will the work be done, where will it be delivered?
- How: how will be work be done, how will it be deployed, how will it be managed, how will you achieve quality assurance and customer satisfaction, how will risks be mitigated, how long will it take, how will the work benefit the customer?
- When: when will you start, when will key milestones be scheduled, when will the project be complete, when is payment due?
- Why: why have you chosen the approaches and alternatives you have selected, why should the customer select you?
Writing these out will give you a head start on your proposal, since these answers will make up the bulk of your body. It also gives you final confirmation that you have the necessary resources to complete the project – or otherwise, will point out any major snags before you get too invested.
Estimating Labor and Costs
Early on, you also want to consider how much the project will cost – and thus, in turn, how much to charge the client. As Andy told us, many businesses use a simple formula to estimate their labor costs: Take a mental walk-through of the project & write down the realistic number of hours it will take for each task. Add all of this up, and multiply it by 1.5.
In other words, if you estimate a project will take 10 hours, write it down as 15 hours in your proposal. (10 * 1.5 = 15)
Why overestimate? Despite how it seems, this isn’t to squeeze any extra bucks out of the customers. Rather, it’s because projects often have unexpected twists and turns. Adding this extra time will help account for any potential snags.
Plus, if everything goes smoothly and you wind up below your estimated hours, you can always offer bonus work, or bill your client a lower amount. Both will make for very happy customers.
Step 3: Writing Your Proposal
Now it’s time to dive into the actual proposal document. Proposals tend to follow a loose formula: They start with an intro that summarizes your business and the project, followed by a body that fleshes out all the detail (including a pricing table), and a conclusion that tells the customers how to proceed.
Next, we’ll describe each step with more detail:
Section 1: Introduction
Start by introducing your company and mission in a way that relates your company to your prospective client’s needs. You can include a brief story that gives your client a feel for you brand’s character and helps build trust. Highlight what distinguishes your company, your accomplishments, credentials, and any awards.
The length of your intro should be a matter of common sense. If you’re proposing a one-day carpet cleaning job, don’t spend more than few sentences describing your business. If your contract is poised to last several years, however, you’ll probably need to spend a lot more time describing your core business values. Nonetheless, try to always keep it under 1 page.
Section 2: Executive Summary
The executive summary is one of the most important sections in your proposal. This is where you should present the case for why you are the right company for the job, and give the reader the takeaway message of the proposal. You should not try to summarize every aspect of the proposal, but rather focus on the conclusions you want the reader to reach after reading it.
Use direct, factual language that is objective and persuasive. This section should be also be kept under 1 page.
Section 3: Table of Contents (optional)
The Table of Contents is an optional section that is helpful for longer proposals with lots of details.
Section 4: Body
Once you have presented your overall case in the Executive Summary, you can outline the specifics of your proposal. This is where you can answer the “who, what, when, where, how, and why” questions that you identified in step 2. Include information on scheduling, logistics,, and pricing. You can also include testimonials from past clients and a link to your website.
Include your Caveats
The body is also where you include caveats, or disclaimers about the type of work you can deliver. As Andy explained, this is one of the most important parts of your business proposal – and one of the trickiest arts to master.
It’s a common tendency for clients to overextend (knowingly or unknowingly) their expectations of a provider. For example, let’s say you’re a business hired to setup internet and WiFi. While on the job, you’re also asked to set up their VoIP phones.
In the moment, this doesn’t seem like a big deal – after all it’s just a matter of plugging ethernet cables into the phones. Weeks later, however, you start receiving calls about phones that aren’t working. Unintentionally, you made yourself liable for a system that’s not even your specialty.
To avoid this type of responsibility, you can write caveats – both about the type of work you offer, and for your pricing.
An example of a caveat might be:
“[Your Company Name] will service all technical issues involving [Your Specialties]. We reserve the right to charge extra in the of an issue that is not listed above.”
On the flipside, you don’t want to include so many caveats that your client is scared away. This is where the “art” of how to write a business proposal comes in: Include all necessary disclaimers, but word them in a way that still shows the value you’ll bring to a business.
Section 5: Conclusion
Once you have outlined the details of your proposal, re-emphasize the exceptional results your company can provide. You should conclude with a call to action that encourages the reader to contact you or visit your website for more information. Ideally, you want your client to take an immediate action, even if it is something small.
Section 6: Appendix
The Appendix is an optional section that you can use to include information that might not fit well in the body of your proposal. For example, you can include resumes or additional graphs, projections, and customer testimonials.
Should I Set a Deadline?
Generally, no. Unless there’s an actual time limitation, a deadline is just an arbitrary statement. All it does is put pressure on your client to sign the deal quickly.
While this was a common sales strategy in the past, many small business owners have veered away from this philosophy today. As Andy explained to us, deadlines aren’t a great trust-builder. They reveal your focus is on the contract itself – not on the client’s needs and long-term well being.
The only time you should use a deadline is when your resources are limited depending on the time frame. For example:
- Material Costs: Price of goods like electronics, raw materials, and even some foods (Lobster anyone?) can fluctuate from one week to the next. If your pricing is time-sensitive, make note of this in the proposal.
- Resource Availability: Your office has a major project starting next month. You can pick up a smaller project beforehand, but only if you start immediately. In a scenario like this, just explain your situation so your client understands why they need to make a fast decision.
Step 4: Editing Your Proposal
First and foremost: Proofread. Whenever possible, send it to somebody else to read over. A second set of eyes can catch errors you may not notice.
Secondly, you need to pay attention to the tone and length of your proposal. In particular, make sure your proposal is short enough to read in a single sitting, and contains language that is professional, yet clear.
How Long Should the Proposal Be?
You want your proposal to be as short as possible without missing any key information. As Andy explained to us, this is for a very simple reason: So your client doesn’t pass it onto somebody else.
If your recipient can’t read and digest your proposal in a single sitting (about 8 minutes), chances are it will go back on their to-do pile, or get forwarded to another employee. Best case, this prolongs the sales process. Worst case, it pulls you out of the running.
What can I do to make my proposal shorter? Any superfluous information, like testimonials, graphs and charts can be moved to the appendix. As far as the text itself, keep an eye out for repetition. Rather than emphasize your value proposition again and again, find a single example that drives your point home: “How much do we care about our customers? Our phone line is open 24/7 and we respond to all emails within 30 minutes or less.”
The Tone And Language You Should Use
Make sure you use clear, concise, and simple language that avoids industry jargon and technical terms. At the same time, avoid using hyperbole that exaggerates your company or service (“Our groundbreaking product quadruples sales!”), as this may undermine the trust you are trying to establish with your potential client.
Your tone should be a balance of “keeping it real & keeping the basic formalities of a business proposal,” Andy says. Use the same tone you would use in their office during a meeting.
There is one exception: Even if you’ve cracked jokes with your potential client, keep humor out of your proposal. As Andy explained, this is because you never know who is reading the proposal. Often it gets passed from a business owner to other employees, spouses, and even friends. A joke that lands well with your client may fall flat with somebody else.
Step 5: Sending Your Proposal & Follow Up
If you’ve written a proposal before, you know the work is hardly over after you click “send.” Following up with a client to give them a reminder and to answer questions is a key part of the proposal process.
Since most businesses send their proposals via email, it’s fairly easy to decide when to follow up. Here’s how:
- Using email tracking software, you can receive a notification when the recipient opens your message.
- Follow up the next morning to see if they have any questions.
Email tracking is offered by a number of different programs – including email marketing programs like Mailchimp, and CRMs like Insightly. The most effective option, however, is to use business proposal software, such as our recommended company PandaDoc.
PandaDoc tells you not just when your customers open the email, but when they actually open your proposal document (and how many times they reopen it). It also tracks how much time they spend on each page, so you can learn which parts of your proposal are striking a chord, and which are being skipped.
To read more about PandaDoc and other proposal software option, check out our guide: Best Business Proposal Software: PandaDoc vs. Proposify vs. BidSketch.
The Bottom Line
In terms of how to write a business proposal, the most important thing is to try and think like your client. If you can put yourself in their shoes, you will be better able to explain why your company is the best for the job and anticipate all the questions they may have.
To help assist the process of writing and sending a proposal, we recommend using PandaDoc. In addition to using professionally-formatted templates, you’ll be able to add interactive pricing tables, ask for an e-signature to finalize the proposal, and even require payment via credit card- such as, if you need a deposit.