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Monday, August 27, 2012

How To Write A Business Proposal

Business Proposals are built to basically address 3 key purposes.

1. To attract Investment and potential investors.

2. To add talent to build / translate your business plan to action. For this you need to share your vision with energetic team members who can join you in attaining the objectives.

3. For self. You need to translate your thoughts to paper so that you are able to do a milestone check on the journey at various stages.

To get started you'll need to work through the following steps ...

1. Talk with somebody who has written several successful business proposals. Ask what worked and what didn't.

2. Outline a two-part proposal. The first part will describe the business opportunity and your plans to take advantage of it. The second will present financial data - tax returns, a balance sheet and a summary of your operating plan.

3. Write the proposal. Limit the first part to 10 pages. Make it concise and clear. When describing the market opportunity, cite sources.

4. Explain what makes you and your company different from competitors. Perhaps you have special skills and experiences. You might have a new technology. Talk about your achievements in the industry.

5. Describe the segment of the market you will pursue. Discuss what you will do to take market share away from competitors.

6. Identify prospective customers. Explain why you are targeting them.

7. Summarize your marketing plan. Offer details, but be brief.

8. Discuss any regulatory issues your company might have to deal with.

9. Identify the management team. Who are the top three people in the company? Give brief biographical sketches.

10. Describe your expectations regarding revenue and cash flow for the first year. Discuss how much money you think you will need to get started, how it will be used, and where you plan to obtain it.

I suggest you put together a power point slide presentation to use during any briefs and meetings where you'll be "selling" your proposal. Construct that presentation as follows ....

Slide 1: Mission Statement

This is the one liner of the company that describes what it's doing. It's best here if you relate to a past success.

What the Investor is Thinking: "Why should I be interested in this?"

Slide 2: Market

How big is it and how fast is it growing? That's what you want to convey.

What the Investor is thinking: "Can I build a billion dollar company?"

Slide 3: Problem

How big is the customer's problem that you are solving?

What the Investor is thinking: "How good will my gross margins be?"

Slide 4: Solution to the Problem

What is your company's unique solution?

What the Investor is thinking: "Why hasn't anybody done this before?"

Slide 5: Team

Who is the team, what is their past experience?

What the Investor is thinking: "Would I bet my childrens' future on this team?"

Slide 6: Technology

What's your technology and why is it defensible?

What the Investor is thinking: "How long will it take to deliver this technology? 1 year, or 5 years?

Slide 7: Customers

Who is buying the product and why?

What the Investor is thinking: "Does the value proposition hold water?"


Slide 9: Go To Market Strategy

Slide 10: Milestones

Slide 11: Financials

Slide 12: Competition

Slide 13: Financing History

Slide 14: Why This Investor

Now you have a plan and raod map to put together a business plan that will work for you. The next step .... just do it!


Jerry Hingle said...

Great comprehensive post. Many people have a great idea/product and don't know where to begin. This is a good start.

Harry Parker said...

Aha very informative i was looking for phd thesis proposal. Anyway thanks for sharing your thoughts.