Business Proposals and Business Plans

1
Business Proposals and Business Plans
2
What is a Business Proposal

• Persuasive written report offering
• To provide a service
• To sell a product
• To find a solution to a problem or need
• Two types
• Solicited formal proposal
• Unsolicited formal proposal

3
Business Proposal

• They range from casual, one-page memos to
  multiple-volume, lengthy reports that are
  hundreds of pages long.  

4
Proposals

• Solicited - Sent to funder in response to request
• Funder agency, business, foundation that
  finances projects
• RFP request for proposal
• RFI request for information
• CFP commercial request for proposal
• Unsolicited - Sent without request or invitation

5
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?

6
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?

7
Proposal Checklist

• 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?

8
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

9
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

10
Internal Business Proposals

• See text 106-107

11
Introduction

• 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

12
Body

• 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

13
Conclusion

• 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

14
Introduction of theCapital 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.

15
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

16
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

17
Copy of the RFP and Letter of Transmittal

• Request for proposal
• 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
• Letter of transmittal sometimes called the
  cover letter.

18
Introduction

• 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

19
Body of Proposal

• 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

20
Body

• Provide information about the people in charge of
  implementing the work plan
• Supporting staff
• Credentials, expertise, and qualifications
• Budget Most important
• Uses more numbers than words
• Can get the proposal accepted or rejected
• Budget carefully
• provide the information as accurately as
  possible.
• Breakdown the costs in detail

21
Conclusion

• Last chance to persuade
• Review what you have said
• Restate the merits of the proposal briefly
• Stress your companys strong points
• Emphasize the benefits
• Sound assertive, assuring and confident

22
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.

23
Business

• Plans

24
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

25
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

26
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

27
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

28
The Planning Process
What are the parts of a Business Plan?

• Cover Sheet
• Table of Contents
• Executive Summary
• Part 1 Organizational Plan
• Part 2 Marketing Plan
• Part 3 Financial Documents
• Part 4 Supporting Documents

29
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,
  e-mail

30
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.

31
Executive Summary (prepared last)

• Describe the business structure, purpose, and
  goals
• Describe 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 the
• management team?
• What is the amount and terms of needed financing
  and what will it be used for? How will loans be
  repaid?

32
The Company Profile

• The two major topics of the company section
• Organization and Management
• Products or services

33
(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
• Partnership
• Corporation
• LLC

34
Organization and Management

• Describe your own experiences, skills,
  qualifications and education that will ensure the
  success of the business.
• Personnel Management
• Bookkeeping
• Inventory control
• Customer service
• Advertising
• Work history
• Professional membership

35
(The Company) Organization and Management

• Identify your team
• How many employees are needed?
• Organizational chart
• Methods of compensation
• Hours to be worked
• Required skills
• Job descriptions
• Specialists
• Advisors

36
The Market

• The two major items for this section of the
  business plan are
• Industry
• Marketing Plan

37
Part II Marketing Plan

• Overview Goals of Your Marketing Strategy
• Market Analysis
• Target Market, Competition, Industry Trends
• Marketing Strategy Product
• Distribution, Packaging, Pricing,
  Branding,
• Database Marketing, Sales Strategies,
• Promotions, Advertising Strategies,
• Public Relations, Networking
• Customer Service
• Implementation of Strategy
• Assessment of Marketing Effectiveness

38
(The Market) Marketing plan sections

• Competition
• Customers
• Strategies to meet sales goals
• Market research

39
(The Market) Marketing plan-customers

• Who?
• What?
• When?
• Where?
• Why?
• How?

40
(The Market) Marketing plan- sales strategies

• What is the selling price of the product or
  service? How was this determined?
• Quality
• Competition
• Service provided
• Location
• Your business costs
• Perceived value to customer
• What the market will allow
• Profit

41
(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..
• Sales promotions samples, reduced prices,
  coupons and contests.
• Publicity feature stories, public relations,
  trade shows, networking, organizations

42
The Financial Plan

• Major sections include
• Financial Projections
• Income statements
• Balance sheet
• Cash flow
• Assumptions
• Sources and uses
• Break even analysis
• Contingent liabilities

43
Assumptions

• Spell out conditions assumed when compiling
  financial statements
• Sales volume
• Pricing structure
• Average sales amount
• Number of customers
• Seasonal trends
• Specific expenses
• Owners draw/salary
• Growth rate

44
Sample Sources and Uses Statement
45
SAMPLE CASH FLOW STATEMENT
46
Supporting Documents

• Personal resumes
• Personal financial statement
• Supporting documentation
• Market research
• Business documents
• Promotional materials
• Letters of support
• Proprietary protection
• Previous income tax returns

47

• The End