By
Ikenna M. Okafor,
(SmeDoctor)
Human Resource Manager @ Ammasco International Limited
Management Consultant @ Integrated Institute of Professional Management
WhatsApp: +234(0)7032940777
LinkedIn Profile – https://www.linkedin.com/in/ogahr
A proposal can be defined as a written statement of competence made by a business or idea owner to handle an assignment for an organization. A proposal can also be defined as a plan of action by a proposal or business to a client suggesting how a particular assignment will be carried out or soliciting for funding. The latter definition stands more in our today’s society. The central idea of a proposal therefore is to convince the reader or client of ones capabilities.
Proposal can be very concised and it can be wide as well. It is often used interchangeably with Business Plan, Company’s Profile or bidding document.
While, all these documents are different due to their contents, one can tweak them to be a proposal. Plus to a very large extent all these documents aside, most of these documents serving as a guide to a business owners, they are also used to solicit for partnership or funding.
This means that there are a lot of reasons why we should have this business document summarily called Proposal. One of the reasons for having a proposal (Business Plan) is to guide the business owner as to financial decisions, process ownership, and operational plans and to meet business projections. This is not commonly seen anyways. Proposal in form of Company’s Profile is also important as it passes important business information and general information about the company.
Again, this reason does not take the front seat on why people write proposals. However, the third and major reasons people write proposal or a business plan is for funding purposes. An example of this is bidding document for company. From January till date, I have written way over twenty (20) business plans across various sectors.
When should one write business plan or a proposal? From my observations, people only come to me to write a business plan only when they want to pursue a contract or need funding or want to submit it somewhere. This is a very wrong approach.
According to best practice, every business must have a business plan and a proposal to guide the business conducts and operations. It is only important to always have your business proposal handy which you always update as you progress to meet with the current realities. This implies that “when” question of a business plan should come in as soon as one comes up with a business idea.
The last question then of WHAT should be the contents of a Proposal? The contents of a proposal is relatively different depending on the purpose. Generally, a proposal shall have the business owner’s information, the operations of the business, marketing plans and strategy (depending on the purpose).
I do advise that marketing strategy is taken out when submitting to individuals for funding. You are also to include your financials especially revenue and cost. Under the financials, you should have the Balance Sheet, Income Statement and Cash Flow.
However, for a proposal being submitted for funding, the financials must be very robust because that’s usually the major area of interest of investors or those who wish to partner with your business.
Anyone investing in any business want to be sure of the security of his or her funding no matter how insignificant the investment fund may seem. Therefore, aside the three major financial statements (balance sheet, cash flow and income statement), a business proposal seeking for funds (whether loan or grant) must demonstrate its capability in paying back by its liquidity ratio.
The business should also demonstrate the exact place he/she wants the investor to invest in and the outcome of the investment.
It is important to show the investor in your proposal the contribution you are making as the owner of the business. This will give the investor a sense of assurance that the risk is being shared and that the business owner has also made some level of commitment into the business. This level of commitment could be in cash, machineries, land, raw materials and other stocks. In all, there must be some level of commitment aside being an available man power to run the business.
In conclusion, it is believed that the why, what and when of business proposal as highlighted in this write up would help is positioning business owners in, running operations and secure funding.
KEY WORDS
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