Difference between a Business Plan and a Business Proposal

business plan

It’s common to hear people use Business plans and Business proposals interchangeably as they often think they mean the same thing. Business plans and business proposals are both business tools but are completely different. From the definition, reasons, structure to the goals, and uses, the business plan is entirely distinct from the business proposal.

As an entrepreneur, a career man or woman or even as a student, the need for either one of this two document comes up once in a while in our journey through the business or cooperate world thus the need to understand and conveniently differentiate between the two and most importantly know where and when to use them. Though you could be forgiven for using a business plan interchangeably with business proposals verbally or in writing, you won’t be forgiven if you tender a business plan in place of a business proposal. Well, thank goodness you are here; you will through this article learn the difference between a business plan and a business proposal and see links to learn how to write a business plan and a business proposal like a pro. if you need help in writing any, you can hire us to write for you.


What is a Business Plan?

A business plan is an official document that outlines a broad and detailed description of how a business or prospective business is set up. It is a long-term plan detailing the structure, products, and services of a company with marketing strategy planned budget and financial projections obtained from detailed market findings and research. Simply, a business plan is defined as the factual and broad description of a business and its operations.

Read Also: How to Write an Effective Business Plan

What is a Business Proposal?

A business proposal is a focused sales or calls to action document written to describe how a business will execute a project, provide the value of the project to the prospective client and ask for the client’s business. simply, a business proposal is a document that a business submits to another business putting forward a business arrangement or partnership.

Structure of a Business Plan

A business plan has three basic elements: a description of the business model, the marketing model, and financial projections. The business plan must have some sections to be complete, and those sections include:

-Executive summary – this can be intense abstract or a detailed marketing tool to draw interest in the plan

-Business description (products and services),

-Marketing plan,

-Industry analysis (competitor analysis),

-Build-out plan,

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-Internal analysis,

-Operations plan,

-Leadership structure and

-Financial projections

Structure for Business Proposal

There are two basic structures for business proposal and this depends on the type of business proposal:

Solicited business proposal – Here the business proposal is written in reply to a Request for Proposal (RFP) and as such the format would take the format in the RFP. A description of your company, followed by the description of your product and service as best suited for the RFP and providing answers for any question in the RFP, quoting all materials and tools required for the delivery of the project.

Unsolicited business proposal – the structure here follows closely to that of the solicited however, it’s presented in a way that it will create a business opportunity, anticipated questions and answers that are considered well suited for the company and with a call to action.

Read Also: How to Write a Winning Business Proposal 

Reasons for Business Plan

There are two reasons for a business plan. A business plan shows the sum total of your business, the ideology behind it, the profitability, how to go from the idea stage to the product level, and how to market prospective customers. A business plan at a glance shows the capital needed the return in with the duration. Therefore, it helps keeps the vision alive and helps the proprietor and the company at large to stay on course.

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Secondly, a business plan helps summarize your business therefore can be used to get loans from Banks and gain investors as it shows the vision of the business and how it will be achieved.

Reasons for a Business Proposal

The reason for a business proposal can be well explained based on the type of proposal. As discussed above: solicited and unsolicited proposal.

A solicited proposal is used as a reply to the solicitor and serves a means to convince the solicitors that your business is best suited for the project, it provides a means to bid for a project.

An unsolicited proposal helps you give to reach your buyers suggesting to the company or organization to purchase services or products from your company.

In Conclusion, a business plan summarizes a company’s goal and how to achieve them with a workable day to day plan with a financial projection over the spread of 5 years. Therefore, a business plan provides a detailed description of the business for investors and banks for easy funding. While a business proposal on the other hand is a document that solicits business dealings with another company.



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