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Business Proposals and Business Plans

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Title: What is a Business Proposal Author: Gayle Last modified by: Muhammad Firza Mohamed Jamri Created Date: 11/28/2005 1:23:49 PM Document presentation format – PowerPoint PPT presentation

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Title: Business Proposals and Business Plans


1
Business Proposals and Business Plans
2
What is a Business Proposal
  • Persuasive written report offering
  • To provide a service
  • To sell a product
  • To find a solution to a problem or need
  • Two types
  • Solicited formal proposal
  • Unsolicited formal proposal

3
Business Proposal
  • They range from casual, one-page memos to
    multiple-volume, lengthy reports that are
    hundreds of pages long.  

4
Proposals
  • Solicited - Sent to funder in response to request
  • Funder agency, business, foundation that
    finances projects
  • RFP request for proposal
  • RFI request for information
  • CFP commercial request for proposal
  • Unsolicited - Sent without request or invitation

5
Proposal Checklist
  • What do I propose to do?
  • Can I do it?
  • How do I propose to do it?
  • Is this possible or feasible?
  • What evidence can I introduce to demonstrate that
    what I propose to do will actually get the
    desired results?

6
Proposal Checklist
  • How much will it cost me to do the task?
  • How much shall I charge to perform the task?
  • What evidence must I show to convince the reader
    that this cost is acceptable?
  • Is my time schedule appropriate?

7
Proposal Checklist
  • What evidence can I use to convince my reader
    that my way is the best way to obtain the desired
    results?
  • How can I show my ability to do what I propose to
    do?

8
Characteristics of a Proposal
  •  
  • Proposals deal with the future
  • Proposals must convince the reader that there is
    a problem
  • Proposals must convince the reader that the
    writer is the best person to fix the problem
  • Proposals are often legally binding offers

9
To Convince the Reader
  • Proposals must be persuasive.
  • Proposals must convince your reader that they
    will get benefits from your proposal.
  • Proposals must show that you are
  • capable of fulfilling your promise

10
Internal Business Proposals
  • See text 106-107

11
Introduction
  • Convince the reader that there is a problem at
    the beginning of the proposal
  • Convince the reader that the solutions you are
    proposing is urgently needed

12
Body
  • Should suggest a practical solution to the
    problem
  • Describe the solution in detail
  • Explain the approach you will adopt
  • Tell about the expertise, qualifications and the
    personal you will use.
  • Describe the equipment you will use
  • Give the cost breakdown

13
Conclusion
  • Reconfirm that the proposal will solve the
    problem
  • Repeat that you have confidence that you can
    carry out the plan
  • Discussion of the plan could be face to face with
    the reader
  • Additional information could be given

14
Introduction of theCapital Appropriations
Proposal
  • A proposal committing a large sum of money
  • Introduction should provide all the background
    information needed to make a decision
  • Introduction should briefly describe feasibility
    study that has been conducted.

15
Body of the Capital Appropriations Proposal
  • Briefly describe the item to be purchased
  • Alternative choices you have considered
  • Life expectancy of the item
  • The specific products, services or projects to be
    supported by the item
  • Expected return on investment
  • Latest feasible date of acquisition

16
External Proposals
  • Vary in length and format
  • More formal manuscript
  • Same components as a formal report
  • Very persuasive document
  • Provide details of your credentials
  • Usually has supplementary parts
  • Occasionally contain an appendix

17
Copy of the RFP and Letter of Transmittal
  • Request for proposal
  • Letter or memo issued by a company or government
    agency that invites competing companies to bid
    for a job
  • Large companies and government agencies may have
    more than one circulating
  • Letter of transmittal sometimes called the
    cover letter.

18
Introduction
  • Refer to the RFP
  • Tell why you are submitting the proposal
  • Proposals must convince the reader that there is
    a problem
  • Proposals must convince the reader that the
    writer is the best person to fix the problem

19
Body of Proposal
  • Describe what you are offering
  • Focus on the strengths of products or service
  • Disclose enough information to convince the
    client
  • Describe how you will carry out the work
  • Give dates when portions will be finished
  • Methods and resources you will use

20
Body
  • Provide information about the people in charge of
    implementing the work plan
  • Supporting staff
  • Credentials, expertise, and qualifications
  • Budget Most important
  • Uses more numbers than words
  • Can get the proposal accepted or rejected
  • Budget carefully
  • provide the information as accurately as
    possible.
  • Breakdown the costs in detail

21
Conclusion
  • Last chance to persuade
  • Review what you have said
  • Restate the merits of the proposal briefly
  • Stress your companys strong points
  • Emphasize the benefits
  • Sound assertive, assuring and confident

22
Poor Business Proposals
  • Too little information - Submitting just a
    company brochure with a price quote.
  • Poor writing - Pleasing to look at, but, after
    the first read-through, boring to read.
  • Lack of marketing focus - Trying to be
    everything to everyone, but being nothing to no
    one.
  • Too general and self-centered - Focusing on the
    company instead of addressing the prospect's
    needs and desires.
  • Done too quickly - Offering trivial solutions
    and canned material instead of ideas that get
    results.
  • No "sell" - Presenting just information rather
    than a persuasive argument for the company.

23
Business
  • Plans

24
Definition
  • Document that can convince the reader that the
    business can produce enough revenue to make a
    satisfactory profit and therefore attractive as
    an investment opportunity

25
What is a Business Plan?
  • Define goals
  • Determine objectives to reach goals
  • Assess resources and make decisions
  • Create contingency plans for managing changes
  • Rationally assess operational feasibility and
    financial viability

26
Reasons for Writing a Plan
  • To serve as the guide you will follow throughout
    the life of your business
  • All lenders and investors require a business plan
  • A business plan is the key to conducting business
    in the international marketplace

27
Business Plan Characteristics
  • Persuade potential investors to invest
  • Allows readers to assess the profitability and
    goals of the new venture
  • Provide employees with guidance and direction
  • Convince suppliers and customers that the new
    venture is promising
  • Clarify the objectives of the new venture
  • Create strategic alliances with other business
    partners

28
The Planning Process
What are the parts of a Business Plan?
  • Cover Sheet
  • Table of Contents
  • Executive Summary
  • Part 1 Organizational Plan
  • Part 2 Marketing Plan
  • Part 3 Financial Documents
  • Part 4 Supporting Documents

29
Title Page (cover page)
  • Business name, address, and phone number
  • Date the plan was prepared
  • Confidentiality statement
  • Owner's name, address, phone number, web address,
    e-mail

30
Table of Contents
  • List major sections of the plan and the page
    number where each section can be found.
  • This page cannot be prepared until the plan is
    finished.

31
Executive Summary (prepared last)
  • Describe the business structure, purpose, and
    goals
  • Describe your products / services and production
    process?
  • What is your overall marketing strategy, and who
    will be/are your customers?
  • Who will be/is in the business, and how is it
    managed?
  • What are the skills of each member of the
  • management team?
  • What is the amount and terms of needed financing
    and what will it be used for? How will loans be
    repaid?

32
The Company Profile
  • The two major topics of the company section
  • Organization and Management
  • Products or services

33
(The Company)Organization and Management
  • Briefly mention what the business purpose is and
    what you provide to the customer
  • Identify the legal structure of your business
  • Sole proprietorship
  • Partnership
  • Corporation
  • LLC

34
Organization and Management
  • Describe your own experiences, skills,
    qualifications and education that will ensure the
    success of the business.
  • Personnel Management
  • Bookkeeping
  • Inventory control
  • Customer service
  • Advertising
  • Work history
  • Professional membership

35
(The Company) Organization and Management
  • Identify your team
  • How many employees are needed?
  • Organizational chart
  • Methods of compensation
  • Hours to be worked
  • Required skills
  • Job descriptions
  • Specialists
  • Advisors

36
The Market
  • The two major items for this section of the
    business plan are
  • Industry
  • Marketing Plan

37
Part II Marketing Plan
  • Overview Goals of Your Marketing Strategy
  • Market Analysis
  • Target Market, Competition, Industry Trends
  • Marketing Strategy Product
  • Distribution, Packaging, Pricing,
    Branding,
  • Database Marketing, Sales Strategies,
  • Promotions, Advertising Strategies,
  • Public Relations, Networking
  • Customer Service
  • Implementation of Strategy
  • Assessment of Marketing Effectiveness

38
(The Market) Marketing plan sections
  • Competition
  • Customers
  • Strategies to meet sales goals
  • Market research

39
(The Market) Marketing plan-customers
  • Who?
  • What?
  • When?
  • Where?
  • Why?
  • How?

40
(The Market) Marketing plan- sales strategies
  • What is the selling price of the product or
    service? How was this determined?
  • Quality
  • Competition
  • Service provided
  • Location
  • Your business costs
  • Perceived value to customer
  • What the market will allow
  • Profit

41
(The Market) Marketing plan- sales strategies
  • Promotional activities are determined by your
    target customers
  • Advertising newspaper, radio, TV, yellow pages,
    billboards, direct mail, flyers, posters,
    business cards, website, etc..
  • Sales promotions samples, reduced prices,
    coupons and contests.
  • Publicity feature stories, public relations,
    trade shows, networking, organizations

42
The Financial Plan
  • Major sections include
  • Financial Projections
  • Income statements
  • Balance sheet
  • Cash flow
  • Assumptions
  • Sources and uses
  • Break even analysis
  • Contingent liabilities

43
Assumptions
  • Spell out conditions assumed when compiling
    financial statements
  • Sales volume
  • Pricing structure
  • Average sales amount
  • Number of customers
  • Seasonal trends
  • Specific expenses
  • Owners draw/salary
  • Growth rate

44
Sample Sources and Uses Statement
45
SAMPLE CASH FLOW STATEMENT
46
Supporting Documents
  • Personal resumes
  • Personal financial statement
  • Supporting documentation
  • Market research
  • Business documents
  • Promotional materials
  • Letters of support
  • Proprietary protection
  • Previous income tax returns

47
  • The End
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