What is the Difference Between a Business Plan and a Business Proposal?

In order to send an official business proposal, you have to have a business plan. These are two different document types that people often confuse and mix.

Let’s take a look at the difference between the two, starting with the document you should have in place before submitting an official business proposal.

What is a Business Plan?

A business plan is a document that describes what your organization looks like and what services and deliveries you would provide.

As a student at BI Norwegian Business School, I learned that a business plan should include the following three elements:

1. Executive summary: Describing your business, organization structure, etc.
2. Marketing plan: Marketing strategy, different marketing analyses (Porter5, SWOT, 7Ps, Pestel)
3. Financial: Revenue, expected revenue, etc.

A business plan is a document you would not typically send to your client but to lawyers, insurance providers, banks, suppliers and other stakeholders that would find this relevant for understanding your business and its value.

What is a Business Proposal?

A business proposal describes what you can deliver, time frame, amount, cost and your terms and conditions. This is a document you would use to respond to a specific request from your client, or you would send it to your client or prospect describing what you can deliver, at what price.

When you respond to a specific request, also known as an RFP (request for proposal), you should follow this rule of thumb:

1. Always reply in their format
2. Reply specifically to what they are asking about
3. Describe how you can achieve their goals
4. Outline the scope of work
5. Provide a cost estimate
   
   

Use a proposal solution to create bid-winning content

There are many different ways to write a business proposal, and many different solutions to write it with. For the best possible outcome in terms of control, cost-efficiency, time savings and security, use an enterprise-grade co-authoring and automation tool.

The proposal solution XaitPorter is used by companies all over the world for this purpose. Here are six key advantages of using XaitPorter to create your business proposals and other high-impact, high-value documents:

1. Cloud-based: Seamless team collaboration from anywhere, at any time.
2. One document: Collaboration on the same document – simultaneous editing.
3. Auto formatting and numbering: No manual formatting or numbering.
4. Custom layout: Create professional documents in accordance with brand identity guidelines.
5. Reuse content: Built on a database – enabling easy reuse of content.
6. Export/publish document: Export to a variety of formats, including PDF and Word.