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Difference between a Business Plan and a Business Proposal

Difference between a Business Plan and a Business Proposal

There is a huge difference between a business plan and a business proposal, and this is very important because most people do not know the difference between this two so they use it interchangeably.

As a business man or you are planning to start up a business knowing this difference between a business plan and a business proposal is the key to a successful business.

There are lots of articles in the internet when trying to teach people how to write a business plan is actually teaching them how to write a business proposal but by the end of this post you will be able to differentiate between a business plan and a business proposal

A business plan is a document that concentrates on the goals of the company, description of a company and its prospects, its potential market size, products and services, problems and solutions, ways to success, market execution and strategy, planned budgets and financial projections while a business proposal focuses on how to execute a business or project, the values of the business or project, quotes for the business, terms and condition so its a document

As simple as this two explanation is some people can still tell the difference, but the fact is they are very different because each of them have different purpose.

As a entrepreneur, a businessman or you want to start a business is very important you know the difference.

There are several ways to identify a business plan because they contain three elements. A complete and a well written business plan must contain description of the business model, marketing strategy and financial projections.

A well written business plan should have the executive summary, business description (products and services), industry analysis (competitor analysis), internal analysis, marketing plan, operation plan, financial projections (discussion of financial concern, projection of results).

Reasons for a Business Plan

There are two main reasons for a business plan, one of the reasons is that a business plan carries the vision of your business and how you intend to achieve the vision. It is a guide that the business must follow if it will succeed, it contains practical strategy to guide the business.

The second reason is that a business plan can be used to raise funds, like business loans from bank, venture capitalists, etc. It gives a clear cut explanation of the business and its chance to succeed.

Reasons for a Business Proposal

There are two type of business proposal, solicited or unsolicited business proposal. A solicited business proposal is a proposal written based on request from an individual, organization or institution. For instance if you receive a Request For Proposal, commonly called RFP, the type of business proposal you would be preparing would be a solicited business proposal and so you must follow the requirement that are stated in the Request for Proposal, RFP.

Usually the requirement for RFP is a quick description of the products and services offered by your business and clearly explaining the relevance to the goals of the RFP.

An unsolicited business proposal is prepared in response to a client after a sales meeting.It is submitted to a client even when they have not ask for any business proposal. The intention of this type of business proposal is to create and develop a business opportunity, for example, giving suggestions to the company or organization to purchase products and services. A business proposal is a document used for presenting or selling a business to prospective client. You could the same method but in any method you use be sure of answering all the possible questions your client might have.

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