This is an interesting discussion we are going to have here in. It is interesting in that a business plan is somehow a business proposal in some sense – but it is not necessarily a business proposal. From a certain angle, a business plan can be part of a business proposal package. Anyways, this is simply to highlight that the business plan and the business proposal are not the same. The differences can be subtle, depending on how you choose to look at it. However, they are significantly different and in this article we shall make those differences apparent.
A business plan is a comprehensive description of how a business will achieve its goals. A business proposal is basically a document that is put together for presentation to a prospective person or entity with regards to a particular business request or offer.
To Note: it is interesting to note that both the business plan and business proposal have similar categorizations. We are talking about those two broad categories of either being solicited or being unsolicited. Obviously those two differ in that the former is more specific whilst the latter is more generalized.
The business plan is a roadmap of a business spanning from what it is to what it seeks to achieve and how. A business proposal as the name suggests is for sort of proposing or selling an idea to someone or a business (or any other form of entity).
Structure Or Format
A business plan comprises of components such as the market analysis, company description, products & services offered, marketing strategy, executive summary, management structure and financial statements. This of course does not ignore the obvious sections such as cover pages, table of contents and appendixes.
Typically business proposals have the following components or sections. These are executive summary, problem statement, proposed solution, objectives, timespan, pricing details, implementation approaches, and terms and conditions. These are the basic components and obviously one can tweak them in the best way they see fit (even adding other sections too). For example, some business proposals might need sections such as monitoring and evaluation framework, management plan, PESTLE analysis, and so on. Where applicable, additional sections such as appendix can be included – cover page and table of contents are an obvious inclusion. You can also check the top 10 most successful businesses to start in 2021 in the link.
To Note: The lengths of business plans or business proposals somewhat fall in the same set. They can be short, medium length or very lengthy – it just depends on the nature of the context involved. Generally, business plans and business proposals can be anything from 30 to 50 pages in length.
A business plan example can be a Fashion Online Marketplace Business Plan. Interestingly the title of a business plan usually gives you a vague picture – like in this case “fashion online marketplace”. It is different for a business proposal though.
A business proposal example can be as follows: A business proposal by John Smith for a contemplated partnership, strategic alliance or joint venture between John Smith and Peter Noel for the introduction of a new product. The title of a business proposal, though it does vary, can in some cases be self-explanatory and give a comprehensive picture before going through the document in full.
Who Are They Addressed To?
Business plans are broadly addressed to or presented to prospective investors or financiers. Business proposals are usually intended for other businesses, other corporate entities or even individuals.
You can clearly see now that a business plan is different from a business proposal. There are several things that separate them even though they in some cases seek to serve somewhat similar purposes. As much as they are different they both must be written following similar principles such as diligent research, preciseness and conciseness.