A Business Plan And A Business Proposal – What Is The Difference

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A business plan and a business proposal can be confusing to differentiate on many occasions. These two serve different purposes; however, distinguishing them has been a problem.

Here, I will share the difference between a business plan and a business proposal to help you prepare and use each of them effectively.

What Is A Business Plan

A business plan is a document that outlines a business idea, the goals, strategies and financial projections of the business.

A business plan is used for internal planning and to attract investors to evaluate how the business works and the aim it intends to achieve.

For example

A fast food restaurant that is starting out would need a business plan that outlines the summary of what the business is all about and intends to achieve, including the goals, strategies and financial projections of the company.

What Is A Business Proposal

A business proposal is an official sales document prepared to offer a product or service to a company, organisation or client.

The aim of a business proposal is to gain a contract or a business deal, which is not the same as a business plan.

For example, an ad agency writes a proposal to a clothing brand, proposing to run ads for their brand at a cost to help them get awareness, traffic, customers and sales.

Key Differences Between A Business Plan And A Business Proposal

Features	Business plan	Business proposal
Audience	It is written for founders, investors, banks or stakeholders	It is targeted to a specific company, client, or organisation proposing to work with them or sell something to them.
2. Structure And Content	Executive summary	Introduction or cover letter
	Company description	Executive summary ( problem and solution)
	Market analysis	Scope of the work or deliverables
	Organizational structure	Methodology or approach
	Product or service line	Timeline
	Marketing and sales strategy	Pricing
	Financial plan and projections	Company qualifications
	Funding (if applicable )	Testimonials

3. When They Are Used	Starting a business	Bidding for a project or contract
	Applying for a bank loan	Approaching a client to offer services
	Pitching to investors

4. What The Tone Is Like	It is formal and broad	It targets the needs of the client

Tips to Guide You in Writing a Business Proposal that Stands Out

Start the business proposal with a compelling executive summary that captures the client’s pain points and how the solution you are proposing would solve them.
Give a detailed explanation of how you, your organisation or your company intends to bring value to the client.
State what makes your solution unique
Make use of visuals
Add testimonials and social proof
Keep it clear and action-oriented
Proofread the business proposal and correct any errors.

Tips to Guide You in Writing a Business Plan that Stands Out

Start the business plan with a strong executive summary
Clearly define the business
Have a good knowledge of the market inside – out
Clearly describe the product or service of the business
Outline the marketing and sales strategy for the business
Give a breakdown of what your business operations and team would look like
Make your financial projections realistic
If your business requires funding, be clear about the amount needed and how it will be utilised.
Keep it clear, professional and easy to read

Conclusion

Now that you know the difference between a business proposal and a business plan, it is important that you use the tips as a guide as well as the differences when writing each of them.

Having known the different sections of these two official documents, you will be able to differentiate between them when you see them and know when to use them and on what occasions to use them