The Differences Between Business Proposals & Business Plans
People often think of business plans and business proposals as being the same but in reality they are totally different in their use and nature, although both are documents used in business but both has a different purpose.
Business plans reflect the long term plan of the business. It reflects the way a business plans to establish itself over a period of time. Business proposals on the other hand are not meant for longer term use. They are used for expressing an intention to work out a business venture with another business.
The intended audience of both the documents varies significantly. The primary target readership of the business plan will be investors and senior management staff of an organization. On the other hand, business proposals are usually targeted towards external businesses.
There is also a difference of need, as stated earlier. Business plans are needed for establishing a guideline for starting up a business from scratch. It usually defines the directions the business has to follow step wise in other to achieve that. Business proposals on the other hand are really not very useful for that purpose. They are short term focused, and are only needed to communicate a business’s intentions to work with another business.
A business plan structure has three major elements: the description of the business model, marketing model and financial projections. It consists of informative sections, including the executive summary ,business description, marketing model, analysis of industry competition, build out plan, operations plan, introduction of management, and a discussion of financial issues and projection of results. A business proposal however is more of a marketing document, designed to convince the audience to do business by presenting a value proposition and call to action.
A business plan concentrates on the business and how it will go about achieving it’s long and short term goals. A business proposal however concentrates on how to solve certain issues within the clients business.
These are the basic difference of a business proposal and a business plan. It is important to note that with both these types of document you will need to employ significant writing skills and present your information in a very convincing tone.
