Every business at some time will prepare a proposal: to meet new business needs, upgrade existing facilities, or proceed with a new project. The purpose of the proposal is to describe a situation, explore possible solutions, and select the best option to meet the business need.
Proposals are powerful tools. A well-defined proposal can help persuade someone to approve a project that can greatly benefit your company.
Proposals can range from a few pages to a formal business case. The common thread is that they are selling documents. They communicate the best way to meet a particular business need.
Common Components of a Business Case/Proposal
A formal Business Case consists of several sections.
- Cover letter
- Title page
- Table of contents (optional)
- Executive summary
- The body
- Overview of the proposal (similar to executive summary)
- Cost summary
- Business case questions
- Accounting information
- Schedule/Time line
- Risk and Assumptions
- Appendix/Attachments (based on need)
The cover letter introduces the proposal. It identifies the target audience, and it may also include certain business expectations such as the deadline for review, the handling of proprietary material, or the need for confidentially. The names of individuals or groups involved in putting together the document may also be provided.
The title page usually contains:
- Title – It should describe the proposal in no more than 15 words. Use an action verb to make the title more attention-grabbing. Avoid jargon. The title should be in bold and centered in the upper third of the page.
- Client’s name (optional) – Prepared For The client’s name is centered in the middle third of the page.
- Organization/group’s name – By centered in the middle third of the page followed by organization/group’s name on the next line.
- The date submitted – centered in the bottom third of the page.
Table of Contents
A table of contents should make it easy for readers to find information quickly. A well-developed table of contents makes the proposal look organized and provides a “road map” for the reader. It includes:
- The heading ‘Contents’ centered at the top of the page
- The titles of each section
- The first level headings within each section and indented under each section title
The executive summary is crucial because it is read by most people in management. It should be a one- to two-pages long and provide a brief outline easily understood by almost anyone, especially a busy executive.
Key elements of the proposal to include
- business outcome
- scope (including areas/items not included)
- how it will help the company meet its goals
- total cost
Include only the technical details essential to understanding the proposal. While it appears first in the proposal, it is the last section written.
Although decision-making management or busy executives may read only the summary, direct reports are expected to thoroughly read the body of the proposal, so it must contain sufficient research and detail to ensure the best decision.
Body of the Proposal
The body of a major proposal should include the following:
Introduction, stating the business need and a succinct background of the problem.
Risks or other issues
Although each area may not be required for all proposals, you should consider them when constructing the business case. The following guidelines will help.
- when detailing how the proposal will meet the stated need. Consider legal and cost implications. In addition, business direction and project accountabilities will be based on the claims in the proposal.
- by gathering, quantifying, and presenting the data in clear and logical sequence. Graphs and process flowcharts are extremely helpful in turning data into useful business information. Consider gathering information from external sources. This will be valuable in answering the question, “what is our competitor doing?”
- for your audience. Technical information can be complicated, so logical organization is important. Even specialists familiar with technical data will appreciate the effort. Numbered and bulleted lists, subheadings, and visual elements can help clarify the information for your audience.
Explain the proposed project – Start by showing that you understand the situation or need by restating the problems and challenges. Then consider and summarize the answers to the thoughts below.
Rationale – What are the arguments for implementing the project? Provide sufficient background information, including present and future operating environments. Describe benefits, both tangible and intangible, that will result from implementing the project.
Justification – What is driving the need for this project now? Address the key drivers or reasons for requesting approval. Examples of key drivers are reliability, environmental, regulatory, safety, and financial. Some projects may have multiple drivers while others may only have one.
In summary, this section should include a discussion of the project’s deliverables that benefit the company and how they link to the Corporate, Department, and Business Unit goals. Examples: maintain adequate levels of safety, increase shareholder value, become the low cost provider, motivate the employee base, manage relationship with commissioners, improve customer satisfaction.
What is the total amount of money you are requesting? Summarize this data, but include enough detail to understand current and subsequent years of expenditures.It should also be broken into labor, equipment, contracts, contingency funding, and any associated incremental cost.
Remember: Be realistic and specific when constructing the budget/cost summary. Leave no service or goods unaccounted for. The budget/cost you submit may become the contract or measure used once the project is authorized.
- What options did you consider? You may also want to provide a payback analysis.
Option A: Do Nothing
Option B: Recommended Option
Option C: Other (on occasion, may come before option B)
Recommended and Alternative Solutions Tips:
Business Case Goals - The information provided should let the reader look at the options presented and reach a conclusion, which may be the same or different from the person writing the case.
The best way to present alternatives is to discuss each one separately and then discuss the relationships among them. Number the alternatives using a simple numbering system. You may want to include a detailed discussion of all alternatives, especially when the decision is close. Also include a ‘do nothing’ option.
- What is your justification for the recommended option? Why does it give the highest value at the lowest overall cost?
Calculate the return on investment and explain why this option is the right investment now as opposed to waiting.
- What are your underlying assumptions? Base them on the most current data available. Include specific information that supports the projected benefits. If revenues are to increase or expenses decline because of the project, explain carefully what is driving the assumptions.
- Have other companies or other locations implemented similar projects? If so, what was the outcome?
- How will you verify that this investment achieves the anticipated benefits?
- Does this investment involve a major purchase of equipment or software? If so, what protection will be provided to the company in the form of warranties and guarantees?
- Are there materials requiring long lead times? Have their deliveries have been incorporated into the project plan.?
Break down the major project sections into milestones and estimate how long each will take to complete. A chart or time line is a way to illustrate this section.
Prepare a realistic schedule. Determine time to complete the job by breaking it into its component parts to communicate your time line. The schedule will also help later with other resource needs. Be sure to include:
- The number of tasks needed to implement the plan
- How much time each task will require
- The order in which tasks will be completed and any overlap between them
When preparing a schedule, allow some time for unforeseen delays and problems. While being careful to avoid ‘over padding’ the schedule, always strive to finish a few days before the actual end date.
Risk or other issues
List significant events that could influence this project either positively or negatively. For each significant event, define any consequences, give a dollar impact, and propose a contingency plan.
Items to consider:
- Regulatory – Is there a deadline or authorization needed?
- Human resources related to the project success – Is manpower available? Does manpower have the expertise to achieve the goals? What is the current attitude of the work force? Motivated?
- Economic assumptions related to the project – inflation, nterest rate, expected return on equity, regulatory climate, revenue anticipated, taxes, and tax trends.
To keep the proposal easy to read, group your exhibits and supporting material in a separate section. Typical information found in the appendix includes:
- Technical Specifications
- Implementation Organization Names & Reporting Structure
- Complete schedule
An appendix is not a ‘catch all’ for any item you think may remotely be of interest. Include only the necessary supplemental information of true help in understanding the project.
General Writing Guidelines
Before sending the proposal on for review, make sure it is error-free. Spelling, grammar, punctuation, and typographical errors can ruin your professionalism and cost you further opportunities. In addition, think about these questions and pointers.
Did I clearly demonstrate the need?
Examine the situation closely and determine the importance of addressing the need or solving the problem. For example, you may have a “need” for a new smartphone, but you must justify the expense. What problem or opportunity is your proposal designed to solve?
Did I clearly support the claims in the proposal?
The evidence in the proposal is sufficient and accurate.
Did I clearly outline the benefits and link them with the company goals?
People frequently confuse features (a 24-hour phone center) with a benefit (call when it’s convenient for you). Keep asking yourself, “So what?” until you’re sure the payoffs are clear to the reader. Avoid generalizations such as “being more productive.”
Is the proposal logical, direct, concise and easy to understand?
Make sure the proposal is logical and readable the first time through. A short clear proposal is more attractive than a lengthy one. Also, leave out jargon. If possible, have someone unfamiliar with the proposal read it to identify any areas of confusion.
Have I used the visual elements appropriately in the proposal?
Visual elements can help illustrate various concepts and explain ideas that may be difficult to picture mentally. List, charts, graphs, drawings, and photographs are all considered visual elements. There are several guidelines that should be followed when using visual elements:
- Place the visual where it is needed. It is more effective if placed near the text it explains. Avoid flipping back and forth—unless the items are too large to include within the body of the proposal without seeming awkward.
- Introduce all visuals used in the proposal to establish the relationship between the visual and the information being conveyed.
- Keep the visual simple. Do not try to convey an excessive amount of information within a single visual. This defeats the purpose for using them.
- Make sure visuals are printed clearly. Copiers are notorious for poor reproduction.
Jane Ranshaw is president of Jane Ranshaw & Associates, Inc. She conducts workshops on business cases and proposals, listening, business writing, internal consulting, and managing emotions at work. An Adjunct Professor at DePaul University, she teaches graduate courses on enterprise resource planning, consulting, and change management in the School of Computer and Digital Media. She also presents communication seminars for the American Management Association.
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