Are you interested in learning how to write a business proposal for investment as a startup? Read along with me.
Writing business proposals is a skill. Well-written business proposals can lead to brand new contracts, increased revenues, and increased profits. If you are not interested in spending more time on bid proposals, read our guide on how to write a business proposal to get better investment results for your company. It might interest you to read the Business pitfalls you should know as a startup.
What is a Business Proposal
A business proposal is a written plan for how you will achieve a shared goal. Is your customer looking for an introduction to a new market? Try creating a partnership between you and their company. Does the client want to invite you to work on an upcoming project? Write up an offer that explains how you could benefit from working together. This written offer is also a business plan. Learn the 5 Sources of business grants for startups in Nigeria.
4 Necessary Preparations to make before Writing a Proposal for investment as a Startup?
Do you need to submit a proposal for some business work? Whether you are writing about the services you provide or a specific bid, we will walk you through the process step-by-step. But first, you need to know that writing a proposal for a business occurs in stages.
The stages must be followed carefully therefore; we consider many factors first. The following are the things you need to do first:
1. Make proper research on your market and competitors
As a startup, your potential to grow and succeed depends on your earlier discovery stage, where you gather data from market study and analysis. The data benefits your business in such a way that it is used to define your product or service and how it fits into the market.
Research about your market, competitors and address existing and potential risks, and draft an assured roadmap to success despite the odds. Some factors to carry out research on your business are;
- The market size
- The potential for expansion, and
- The place of your competitors in the market.
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2. Customer profile
Business proposal writing is something that many people dread, because of many factors like studying the in-depth customer profile. Some people think they have to be a writer, while others just find it time-consuming to make studies on how to attract patronage for their services or products.
However, a well-written business proposal based on the study of target customers and how best to meet their needs can be an invaluable asset to help you grow your business.
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3. Review your product
The best time to develop a proposal for your business venture is when your service is at a minimum viable product (MVP) level. The MVP means a product that has enough patronage by users but requires some developments to become fully functional or steady. Moreover, this is the best time to write a business proposal because, at this stage, your business is attractive to investors because their potential is in plain sight.
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4. Research and gather information about investors
The investor scope and pool are wide in the market and business world, therefore, as a startup, it requires you to target a specific category. There are many investors to target, like angel investors, banks, venture capital firms, peer-to-peer (P2P), corporate and personal investors. Find out your target investor, and work towards attracting them. This factor goes a long way in determining your business proposal.
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How to Write a Business Proposal: 7 Key Elements
How do you write a business proposal? What are the key elements of a proposal for business ventures? The key elements of a proposal for business are:
1. Title
Every formal document starts with a name which is the title. A business proposal as a powerful document that can bring massive change to your business should contain an introductory title describing your product and its niche in the market. The business proposal title should be clear, concise, and easy to grasp with just one look.
2. Executive Summary
The second stage in learning how to write a business proposal for investment as a startup is the executive summary. This can serve as a cover page for your business proposal, and after that, a table of content should follow it. The main executive summary itself comes after the table of contents and it sums up your value proposition. Its key points include:
- Complete overview of your customers and their problem: State and explain your proposed solution to that problem, and how your solution will benefit the customers and investors.
- The potential return on investment (ROI): Here, I suggest you state your successful experiences as a startup or an entrepreneur, as this would boost investors’ interest in you. Keep it realistic and rational and always showcase what is in for the investor.
3. Project Details
The project details include all the information about your business plan. It should showcase your competence as a startup or an entrepreneur. Portray also your MVP and how you intend to raise it higher.
4. Company performance
Startups that have been in operation for some time can include their positive performances through a business description and overall past and present financial data. If, as an entrepreneur, you have not launched a product or service yet, then rationally share other services or product success that you contributed significantly to.
Do not forget to include the information of all stakeholders in your current project, their history and achievements, and other excellent market statistics.
5. Planned marketing and sales method
This fifth element allows you to present all your research on the market and your competitors. Try to include your marketing and sales strategies and other streams. List and describe well your product pricing, and why that is the most profitable amount.
6. Logistics and operation
Presenting a comprehensive company’s logistics gives investors an expert opinion about your startup. Include other operations like the number of employees present or that you plan to hire, equipment used or needed or to be used, company location, and other expenses.
7. Project Financing
The project financing stage is the major goal of the project, so do well to give detailed and accurate data. It should specify. Project financing elements should define your sources of funding, timeframe, return on investment, and other data forecasts.
Moreover, the most important part of this element is the business investment exit plan.
Your investment exit plan or strategy, which investors would like to see, would showcase:
- What the business has achieved in predetermined investment criteria, or
- If It cannot achieve its profit aim as stated.
Understanding What a Business Plan for Investment Means
A business proposal is an important tool for any startup or entrepreneur. It is a formal document that not only explains your company’s solution but also details how you plan on making money. When presenting your business plan, you want to ensure it is easy to read and consistent with your brand identity. This can be challenging because there are certain components of your proposal that need to be written in a professional tone, while others require one that is more casual.
It’s a fact that “the way you do one thing is the way you do everything.” If you want to write winning proposals, always prepare a business proposal. Business proposals are used in corporate firms for soliciting major projects and taking the first step in having those projects in your portfolio. They are great for building confidence with your team and for benchmarking your cost-saving or revenue generation ideas.
Uses of Business Proposal
A business proposal can be used;
- To secure funding
- Create awareness for clients.
- It is a marketing tool that allows you to prove your company’s value to your client or potential customer.
- You also use it to gain funding, as a method of marketing and selling your services or products, and
- It serves also as a way of keeping track of finances throughout the organization.
What things should I avoid when writing a Business Proposal for investment as a startup?
Before you send out your proposal, ensure it is error-free, both in grammar and usage. Therefore,
- Don’t get business proposals complicated
- Make it short and concise
- Be confident and let your writeup prove that as well
- Remove any irrelevant information and avoid repetition
- Don’t focus on any information entirely.
- Be consistent with your brand identity.
Wrap-up Thought on Business Proposal for Investment as a Startup
Writing a business proposal can be one of the most difficult tasks for a new business owner. Before you can actually write a formal business proposal, give yourself a great foundation for success. In order to do this, you need to collect all the information you will use in your proposal. You need to understand the main parts of an effective business proposal and learn how to create one that is sure to impress patrons and produce sales. The next step is crafting an introduction letter that will inspire the reader to take action. This letter should get the proposal off on the right foot and make the prospect eager to see what else is coming up.
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Conclusion
Whether you are a startup with no name and nothing to lose or a large established corporation, when you need money from an investor, one of the first things that you need to put together is a business proposal. A business proposal is essentially an introductory document that describes the reasons anyone should want to give you money. In learning how to write a business proposal for investment as a startup, follow the listed elements in this article.
