The Difference Between A Business Plan And A Business Proposal

Difference Between A Business Plan and A Business Proposal
Difference Between A Business Plan and A Business Proposal

A business plan and a business proposal are two distinct documents. Most people mistake them for each other, and a lot of articles on the internet that teach how to write a business proposal are actually just explaining how to write a business plan.

While a business plan focuses on a company’s goals, the problems and solutions it’s trying to address, its potential market size, keys to success, products and services, market execution, and more, a business proposal on the other hand usually focuses on how a certain project would be executed, states a quote for the project, terms & conditions, and several other key pointers.

These two documents are very different with each serving distinct purposes. So it is important you know whether what you need is a business plan or a business proposal at any time.

See Also: 10 Reasons To Write A Business Plan


Reasons For A Business Plan

A business plan envisions your pipe dream. It shows how your business goals, objectives, philosophies, industry analysis, target market, products & services, market execution, competitive analysis, financial projections, and a whole lot more will position the business for success.

It is a detailed document that investors, banks, accountants, and financially savvy individuals can easily review to know what your business is about, its chances of success, and how you’ve planned to scale.

Business Plan Structure

In preparing a business plan, here is a sample structure you should follow to get it done right:

  • Executive Summary
  • Business Description
  • Market Analysis & Strategies
  • Design & Development Plan
  • Organization & Management
  • Service or Product Line
  • Sales & Marketing
  • Funding Request
  • Financial Projections
  • Appendix

See Also: How To Write A Business Plan: The Complete Guide


Reasons For A Business Proposal

Business proposals are usually solicited or unsolicited. A solicited business proposal is written upon request from an organization, institution, or individual. For example, if you receive a Request For Proposal (RFP), what you’re preparing would be a solicited business proposal. In this instance, you’d have to follow the requirements as stated in the RFP.

An unsolicited business proposal, on the other hand, is prepared in response to a client after a sales meeting, giving you more flexibility in curating the contents of the proposal.

Business proposals are limited in scope, and are thus, written for a specific audience.

Business Proposal Structure

Here’s a sample business proposal structure:

  • Introduction
  • Executive Summary
  • Table of Contents
  • The Body of The Proposal
  • Conclusion
  • Appendix

In your business proposal, you will detail the scope of the work, materials needed, cost estimates, project timeline, previous clients, team members, achievements, and a whole lot more in the body of the proposal. It’s a marketing tool, and its goal is to convince the target customer to do business with you.

See Also: How To Write A Winning Business Proposal: The Complete Guide


What Then Do You Need?

The variations between a business plan and business proposal are wide apart. As shown in this article, they serve different audiences and are prepared for different reasons.

If your goal is to seek investment or a bank loan, a bank and investor ready business plan is what you need. But if your goals are to convince a client to use your service whether the client has asked for a document showing how much value you’d add to them or not, a business proposal is what you need.

See Also: How To Write A Feasibility Study Report: The Complete Guide


What are your thoughts on the difference between a business plan and a business proposal? Let me know by leaving a comment below.


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Stan Edom
Stan Edom
I'm an entrepreneur with an expertise in supply chain management, small business development, e-commerce, internet startups, and agriculture. In my spare time, I'm always trying to solve problems people face in their everyday lives with tech.

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  1. Thanks Edom, I have been reading your publication, they have inspiring, informative, education and above all priceless. keep up the good work.

    samuel Chika

    • Thank you for the kind words and for being a reader, Chika.

      I appreciate them.

      Do have a great time!

  2. Great read.I have always confused the two terms.Business plan means you plan for a business and that business has not yet started but business proposal it means you propose something in a business which is ready stand.Thanks for the detailed information.

  3. in my understanding, business plan is general road map for the company strategy, but business proposal is one away to find new market or potential client.


  4. Hi Stan

    I was searching difference between B.Proposal and B.Plan. I found here, Thanks for the publication. IF you also publish “Samples” besides the templates will be more helpful to a person like me, who did not write proposal before.

    My Best Regards

  5. Hello Stan E.,

    This is absolutely spot on. No unnecessary embellishments or needless journey. Straight to the point, self-explanatory and informative.

    Thanks a million, Sir.

  6. Thanks Edom, your publication was most helpful to me. I am grateful sir, continue with the good work.

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