Are you planning to start a business next year? Many businessmen or entrepreneurs find a business proposal a significant reliance on designing a new venture.
But, first, let us discuss what a business proposal is.
A business proposal is an offer in writing from a seller to a possible or prospective buyer. Usually, it is the initial step in establishing a business relationship by initiating a sale and assumes significance in any business. There are informally, formally, and unsolicited proposals. Each business proposal must have a distinctive style and a stressing point. However, all kinds of proposals need to be formal, to the extent and be convincing enough to make a sale.
A lot of entrepreneurs make the mistake of believing a business proposal is one means of forecasting the future. It is not magic; it is just numbers and words on white paper. The main objective of it is to help you make a mental framework, which enables you to articulate and explore how your company could develop, grow, and what could happen to it.
Business proposal mistakes can lead to anything from small setbacks to serious errors for your company or business. Particularly for those seeking funds, the information in the proposal must be correct, and none of the ideas are misrepresented.
To assist you to keep away from future stumbling blocks, below are five business proposal mistakes that you have to be aware of:
Many businessmen or entrepreneurs out there make the error of writing a business proposal to impress investors and lending organizations. First and foremost, your business proposal is your business proposal. It’s one place where you are brutally and totally honest with yourself. It is also where your weakness, threats, strengths, as well as opportunities acknowledge.
Once set an objective, see to it that it is realistic. Then make a specific step on how you will obtain it. Your business proposal must show how much you look forward to gaining. It should reveal how you plan to get there. It is vital to set realistic objectives as it demonstrates how you can really reach that also allows investors to understand that you know what you’re getting into. No one gives funds to somebody who is ill-prepared or not sure.
Taking for Granted the Idea Validation
Avoid overestimating the significance of the idea. Of course, you don’t require a spectacular idea in putting up a business. What you need is money, common sense, perseverance, and time.
Some successful businesses are totally based on fresh ideas. A fresh idea is harder to implement than a current one as people do not fully understand a fresh idea and are often unsure if it will work.
The business proposal never sells fresh ideas to investors. They just break down business prospects and accomplishments. Investors invest in people and their companies, not ideas. They buy into a business, with milestones met and traction and validation, not only ideas.
The business proposal, even if important, is just a way to show and present information. Therefore ensure you are ready to amaze potential business partners with your leadership skills and knowledge. Avoid skipping this part, or the business proposal you show in it- to do the job on your behalf
By its nature, a business proposal is full of assumptions. Of course, an essential one is that your company will thrive. The superb business proposals give emphasis to vital assumptions and, at the same time, offer some type of rationalization. The lousy business proposals bury assumptions in the proposal so nobody can tell where the ends of the assumptions and the facts start.
Acceptable pricing, market size, purchasing behavior of the customer to commercialization, all these involve assumptions. When possible, ensure to check your assumptions against benchmarks from a similar industry, the same industry, or some acceptable standard. Tie these assumptions to facts.
A good and simple example of this is the real estate section of the proposal. Each company eventually requires some form of real estate; it doesn’t matter if it is an industrial space, retail space, or office space. You must research the locations as well as expenses of the real estate in the area and make a cautious estimate of how much space you need prior to presenting the plan to lenders or investors.
Lack of Research
Just as it is vital to tie assumption to reality, it is equally vital to ensure that your facts are, well, facts. Know the whole thing you can concerning your industry and business- client or customer buying habits, fears and motivations, size, competitor positioning, market share as well as overall market trends.
You do not wish to get bogged down by the facts; however, you must have some numbers, statistics, and charts to support any projections or assumptions you make. You can’t improve what you can’t measure. Get insights about your potential leads leveraging an analytics tool. Well-prepared lenders or investors will check the number against a third party or industry data- once your numbers do not taunt with the numbers, your business proposal will not get funded.
The most common pitfalls can be prevented once you take the essential time to put together a sound document. Give yourself time to do research and adjust the plan. In general, it is vital to tie the whole thing together and ensure that your narrative is supported by solid facts.
Failing to Know Competition and Replies to Common Queries
Nobody wants to consider the worst-case scenario when putting up a business. As a matter of fact, by simply presenting and announcing to the world that you are putting up a business, most likely, you will get so much positive feedback from friends and loved ones that it might be hard to consider what could go wrong.
Prior to betting too excitedly, a good business proposal will assist you first, survey your competitors in the market, second, ready to respond to common setbacks and critics. You have to look forward to your audience’s concerns and questions, so you are able to solve them.
Pretending challenges do not will make them gone; it will only make you less ready to cope with them. It is so hard to know all the possible challenges; however, you are still better at studying as well as addressing the ones you are able to.
How to Write A Good Business Proposal? Avoiding these Mistakes
Business proposals are written with the aim of conveying an idea to the reader. It is a complex task that conveys complex business propositions in a clear and simple manner. The crux of writing a good proposal is to know the concept and structure it in a format, which is easy to comprehend. It must be broadly including these sections:
- Executive summary
- Business proposition
- Financial aspects
- Value propositions
- Convincing the readers
A good or professional business proposal must clearly outline the proposition totally without making the information too lengthy. Not like a business plan, RFP response documents, a business proposal is comparatively shorter as well as submitted as a prelude to a comprehensive document. Generally, it is followed by many rounds of discussion, complicated documentation, and negotiation prior to rejecting or accepting the proposition.
It is vital that just a professional takes up the challenge to write the business proposal. The writer has to know the idea, narrow it down to a micro-level, begin constructing the document, get it assessed, make the needed changes, and drive the document to completion. Once these are followed, success can be assured.
A business proposal must be written in a professional way so that the reader gets interested in the proposal as well as agrees to move to a higher level of discussion. It’s a very serious business document, and the owner of the proposal should take no chances when hiring a writer. The writer must have knowledge of the subject, experience in writing proposals successfully, and can add value to the whole process.
A business proposal must be lively and bring out the culture of the company in a good light. This will assist clients in making a trustful image of you and boost your customer retention. At this point, with many graphics and imaging on hand so easily, it will be best for you to make the right use of them. A picture speaks a thousand words; use graphs and pictures wisely to sell your services and products.
Grammatical mistakes and spell errors don’t bode well for you. These can show you being careless and provide an image of low-quality deliverables. These mistakes must be avoided assiduously. Last but not least, a business proposal must be well written from the point of view of the readers and must answer all the queries and questions.
Get Outside Support and Assistance
It might be smart to take an initial stab at your business proposal yourself since you are close to your business reality. Experts encourage business owners to make use of business software as a means of getting started. Having business proposal software on your side to revise the proposal can assist you to create a stronger business case. An objective point of view is vital. Sometimes it’s hard to see flaws in the document and where you can boost it.
Abbey Claire Dela Cruz
Abbey is the Marketing Manager of Premio. When not working, she indulges herself with nature; creating once-in-a-lifetime adventures and connecting with people of all sorts. Connect with her on LinkedIn.