How to Write a Proposal Letter

by Anam Ahmed ; Updated November 21, 2018
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If you’re working in the business to business space, chances are you will be required to develop a business proposal or proposal letter at some point. This is a document that is used to offer your organization’s products or services to a prospect based on defined parameters like scope, cost, timeline and budget.

What’s a project proposal? Also known as a business proposal or proposal letter, this document usually has a specific format with certain requirements that vary based on your industry. However, the main goal of a proposal letter is always to prove to the prospect how your business can help to solve the problems they are facing.

What Is a Proposal Letter?

Proposal letters can be either solicited by a business or come unsolicited. The solicitation can be as simple as a prospect asking for a proposal after a sales call or be a formal process called an RFP, or request for proposal. This process usually involves multiple organizations sending in competitive proposals to win the business of the prospect. Based on the industry and type of RFP, the proposal will need to cover specific requirements outlined by the prospect.

When dealing with unsolicited proposals or informal requests, there are no formal guidelines you need to follow. However, it’s important to craft a document that answers the questions your prospect might have in a clear and concise way. While there may not be any formal requirements in these cases, it’s still vital to follow a logical structure and cover the critical aspects of your business and how it solves the problems with which the prospect is dealing.

A business proposal or proposal letter should include the following criteria, regardless of the industry and process:

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  • Cover letter
  • Title page
  • Table of contents
  • Executive summary
  • An overview of the problem the prospect is facing
  • The goals or objectives of the proposal
  • What makes your organization qualified to handle the problem
  • Scope, including the price and timeline
  • A call to action
  • Contact information

Conduct Research Before Starting Your Proposal

Before you start typing away, it’s important to gather all of the pertinent information in one place. Try to find out who will be reading the proposal and whether he is the decision maker. Tailor your proposal to your audience, ensuring you provide all of the information for which they will be looking.

Find out what kind of pain points the prospect is facing. Establish how your organization is best suited to solve their problems compared to your competition. List out elements that set you apart from similar businesses to which the prospect may be talking.

Ascertain whether the prospect has a budget or timeline in mind, and make sure your internal resources are aligned to meet those requirements. Once you’ve selected which of your offerings will be of the most use to your prospect, you’ll need to calculate your internal expenses before quoting them a price.

Provide the Scope of the Project

Outlining the scope of the project is a major component of the proposal-writing format. Having this key information written down gives you a head start on writing your proposal. Take some time to draft the key details of the scope. The first element is to figure out who will do the work within your organization, who will manage the process and who will be the main point of contact for your customer.

Next, you’ll need to establish what exactly needs to be done to help the customer manage their pain points. Outline the steps your organization will take and the process you will use to solve the prospect’s issues. You should also list the metrics your organization will use to measure the success of the outcome.

Finally, outline the schedule in as much detail as possible, providing milestones your company will hit in order to complete the project by the date you’ve proposed. Be generous in estimating your timeline, accounting for any unpredictable issues that may arise. This is to provide your prospect with a realistic account of what you can deliver to them.

Start With the Introduction and Executive Summary

The introduction of your proposal letter should include information about your company and brand, with some background on who you are and what you do. If you write proposal letters often, you may want to develop boilerplate text about your company which you can reuse each time.

The executive summary should include the pertinent points of your proposal. While you shouldn’t try to summarize every aspect of the document, do include information about why your company is right for the job and how you will help to manage the prospect’s pain points.

Develop the Body of the Proposal

The body of the proposal needs to include the details of the problem your prospect is facing. To demonstrate your understanding of their issues, go into the specifics of their landscape and the difficulties they are seeing on a daily basis. This helps to show your prospect that you’re well versed in the areas that matter to them.

Outline the objectives for your proposal. This will primarily be to show the prospect that you mean to help them with their business problems through the products or services you offer. Provide details about what makes your company different from your competitors and why you’re better suited to work with the prospect than they are. This may include talking about other organizations with which you’ve worked, showing examples of past projects and providing details about your knowledge and expertise.

Provide Specifications and Assumptions

Include the scope you have outlined with specific prices and schedules. Your company may not know all of the details for the prospect’s requirements, so you may have to assume a couple of things, like their internal budget and timeline restrictions. You can include those assumptions within the proposal and even provide a couple of options. For example, you can provide estimates for a four-week turnaround, a six-week turnaround and an eight-week turnaround, with corresponding pricing for each timeline.

Close With a Strong Argument

Your conclusion for the proposal letter should include a quick summary of the information you’ve provided the prospect. Thank them for taking the time to consider the proposal you’ve put forward, and provide them with information on what to do next. It’s critical to include a call to action in your business proposal. This can include calling you to discuss the proposal further or setting up a meeting to sign the agreement. Finally, include information on how they can contact you, with a couple of options like email, phone and website.

Follow the Best Practices

To make your proposal letter more effective, send along some supporting documentation. This may include case studies of your past clients, testimonials from happy customers and spreadsheets with statistics showing your success rate.

Be sure to write your proposal on the company letterhead and have it designed by a graphic designer if you have the resources available to you. Paying attention to the visual element can help your company to stand out from competitive proposals the prospect may receive.

Don’t Forget to Follow Up

While not directly part of the proposal letter document, one of the key elements of sending a proposal is to follow up with the prospect. Call or email your prospect after a few days of sending the proposal letter to find out whether they have any questions or feedback regarding the document. Offer to clarify any elements about which they may need further information. By following up, you help to cultivate a strong relationship with the prospect.

About the Author

Anam Ahmed is a Toronto-based writer and editor with over a decade of experience helping small businesses and entrepreneurs reach new heights. She has experience ghostwriting and editing business books, especially those in the "For Dummies" series, in addition to writing and editing web content for the brand. Anam works as a marketing strategist and copywriter, collaborating with everyone from Fortune 500 companies to start-ups, lifestyle bloggers to professional athletes. As a small business owner herself, she is well-versed in what it takes to run and market a small business. Anam earned an M.A. from the University of Toronto and a B.A.H. from Queen's University. Learn more at www.anamahmed.ca.

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