Do you know how to write a business proposal that gets the needed attention? Do you need a sample format on how to write a business proposal that wins? Then i advice you read on.
You have come about a great business idea. You have done all the necessary research. You have conducted your feasibility study and crafted a compelling business plan. And you have taken all the initial steps perfectly. But you are faced with one problem—funding. You have some money lying in your bank account, but that’s not up to a fifth of what you need to get your business idea off the ground.
If the above reads like a description of you, then you are not alone, as there are several thousands of others like you. I mean, those who have great business ideas but have no funds to get started. Let’s face it, there’s only one solution to this situation and that is: turning to third party funders such as investors and lenders. But because debt financing could be a dangerous option if not handled well, equity financing proves a better option.
Equity financing, in case you don’t know what it means, refers to a business funding arrangement where you get funds from an investor or venture capital firm in return for a share of your business. Aside that this financing option saves you from huge debts due to accumulated interest rate; it also helps reduce your risks, since you will be sharing them with the investor.
Now, whoever told you that your great idea would attract investors by osmosis is a dreamer who wants to pull you into his kind of sleep. How will an investor fund your idea when they are not aware of it? You need to pitch them your business idea, hoping that they will be interested in it and do what you expect of them—write you that check!
A business proposal is one of the most powerful and important documents in the corporate world. The reason i say this is because most big projects, contracts, partnerships, joint ventures, mergers and acquisitions, business financing, fund raising, etc; all begin with a business proposal. Now for those who may not know what a business proposal is, i will take a moment to provide a definition.
What is a Business Proposal?
A proposal is an intended course of action that is yet to be executed. According to Wikipedia, a business proposal is a written offer from a seller to a prospective buyer. Business proposals are often a key step in the complex sales process; for example, whenever a buyer considers more than price in a purchase.
A business proposal is written to persuade your prospective client. It is meant to answer all their questions on why you are the best and should be chosen. In order for your business proposal to answer your clients questions, you must know your clients questions and expectations beforehand. Hence the first step to writing an irresistible business proposal is to know all your clients expectations.
Writing a business proposal for investors isn’t as difficult as you think. And no, you don’t have to hire a professional for that—you can handle it yourself. Here’s how to write a business proposal that will impress investors and prompt them to fund your business.
10 ideas for Writing a Business Proposal to Attract Investors
Your proposal should include a brief overview of the company, the required funding, a detailed explanation of how you will use the funds, a comprehensive account of the required equipment, technology, products and services, production capabilities, target market, competition, sales strategies, management, employees, and company goals. It should also include financial projections for at least three years of operation.
A business proposal can take many forms. But since you are searching for equity financing, your proposal should include the following components:
Components of a Business Proposal
1. A summary
This should be brief, no more than two to five pages, and include your contact details (such as name, address, and telephone number), your purpose for requesting the investment and the amount required, and a brief description of your company as well as your proposed products or services, required facilities and equipment and so on.
Your summary should also include a brief description of your target market, competition, sales strategies, management team and their expertise and background, a description of how you will use the funds, and a short paragraph about the company’s goals.
The summary is a condensed version of the more detailed proposal. It is intended to give a reader a quick overview and encourage a thorough overview of the proposal.
2. Company overview
This section will include the formal name of the company, its legal structure, ownership details, the industry, and the products and services to be offered. Describe your role in the business and those others who might also be involved. Also, you should give details of your own investment in the business.
3. Products and services
Provide detailed information about the products or services you intend to offer. Include inventories in stock to be purchased, the cost of the inventories, estimated production costs, selling prices, and sales forecast for the next three years.
4. Use of proceeds
This section is for describing how you will use the funds you get. Give full details of each of your expenses. Also, include your cash flow projections to demonstrate how the investor will get back their money.
This section will detail your marketing, advertising, and sales plans as well as your unique selling proposition. Include any marketing research and analysis data that will support your sales projections. Be honest and reasonable in your forecasts and forger about blowing figures out of realistic limits.
Discuss the company’s management, their individual responsibilities, employment histories, qualifications, skills and experience. Describe how each member will contribute to the growth of the business. Also, describe any additions in management that you’re planning for the near future. Don’t forget to include details of the salaries for at least three years plus any other forms of compensation intended.
Other components that should go into your business plan include the following:
- Facility and equipment
- Business financials
Most importantly, keep your business proposal simple and free of jargon. Take your time to eliminate all grammatical and typographical errors. And make your proposal very presentable.
3 Tips for Writing a Business Proposal that Attract Investors
a. Step 3 – Make it easy for them to say yes-: So many business proposals has been rejected because they look either very complicated or sound like much work not minding how lucrative they are. Make your business proposal to be as simple as possible for easy understanding.
b. Show them the money-: If there is one thing everyone who reads your proposal desires, it is winning. Investors want to invest in winning investments, government entities want to deal with individuals or companies that have the capacity to deliver at the right time. Corporate firms want to partner with winning companies or personalities. The hard truth is that everybody wants to win including you.
So it is very important that you logically explain to your prospective client how much they stand to gain if they choose partner with you or your company. Don’t make a guess, entirely stand your predictions on your currently marketing stats, sales conversion rates and other real information.
c. Your proposal should carry a sense of urgency but not desperation-: When writing a proposal, you must try to politely inform to your potential partner that you won’t wait long to hear back from them. Make them understand that if you don’t hear from them soon, that you will have to look for someone else. Anywhere. This will proof to them that you are competent enough and that you know what you are doing.