What Are Business Proposals?
Every new business requires an adequate amount of capital to pay for start-up expenses. Entrepreneurs who do not have the financial means available to them personally must look externally for resources that can lend them the necessary funds. Financial institutions, such as banks and credit unions, as well as investors, will want to see your business proposal before they agree to give you money.
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Proposal Objective
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No matter who you present your business proposal to, the objective is to get financial assistance. The funds that you obtain are your green light for moving forward with the opening of a new business or the development of a new product. In order to accomplish this, you will need to convince your prospective lenders that they can feel confident about giving you their money.
About the Business
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Your business proposal must clearly explain your statement of purpose, the industry your business is in, the types of services and/or products that you will be providing, who your target market is, where you want to be located, what your organizational structure will look like, how many people you expect to hire, what the current competition is and why you believe your services or products will be profitable. It is best to provide this information in organized sections, and as clearly and concisely as possible. Your prospective lenders do not want to read through fluff -- they want hard facts and attribution to back up your claims.
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Funding the Business
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Your must have a detailed financial component in your business proposal. After all, your readers are interested in profitability, returns and your ability to repay them. Prepare an expense list with the estimated costs for each expense that will be necessary to start and operate the business. You will have to provide this detailed list in your proposal, along with a financial projection of how the monies used at the beginning will be earned back in profit over the course of time. Make sure all of your calculations are accurate -- one simple mathematical error could jeopardize your credibility in the eyes of the lenders.
Personal Disclosure
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You will want to disclose information about yourself in the business proposal, so that readers get a chance to know the person who is asking them for money. Provide them with information about your formal education, any credentials that you hold, achievements that you have been recognized for, how many years of experience you have in the industry, whether you have started other businesses in the past and what types of social responsibilities you intend to take on with the start of your business.
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References
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