Business proposal letters are a way for you to reach out to potential clients or other business owners. There are a variety of reasons you may need to write a proposal letter in the course of running your business. For instance, to start a new business, customers and investors will need to know about you. To grow an established business, you may need to collaborate with other companies for a project or a product launch.

Understanding the purpose and learning how to write a proposal letter can help you establish collaborative and lucrative business relationships. Keep reading for more details on the uses of a business proposal letter and how to write one.

What Is a Business Proposal Letter?

A business proposal letter is a document used to introduce a business to a client or an investor. Its purpose can also be to propose collaboration between companies. Similarly, you may send a business proposal letter as a response to any request asking for information about your services or products.

In this letter of introduction, your goal is to present your product or services as something beneficial to a potential client. If you are writing to investors, your letter needs to convince them to hear more about your business idea and consequently invest in your company. In the same sense, if you're proposing collaboration between you and another business, your letter should outline how working with you will benefit your potential partner.

When Should You Use a Business Proposal Letter?

The main purpose of a business proposal letter is to introduce your company to another business, a prospective client, or a potential investor. To be concise and straightforward, you must include why you're writing, which could be for the following purposes:

  • To propose a collaboration
  • To ask for a capital investment
  • Partnership proposal
  • Sponsorship proposal
  • Sales proposal
  • Marketing proposal

Typically, proposal letters fall into three categories:

  • Formally solicited business proposal letter: This type of letter responds to a request for proposal (RFP) initiated by a prospective client. For example, you'll send this when you receive a request for a quotation or information about your products or services. You'll also send a solicited proposal letter whenever you're asked to submit a bid for a project.
  • Informally solicited business proposal letter: At community or networking events, you may encounter prospective clients or investors who may want you to contact them to discuss a sales pitch or a collaboration further. Your response could be in the form of this type of proposal letter. There are no rules given for writing an informally solicited proposal letter, but it's best to be professional at all times.
  • Unsolicited business proposal letters or cold calls: Most proposal letters can be categorized as cold calls. Cold calling is a technique that marketers use to solicit sales or offer products or services to potential clients.

How to Write a Business Proposal Letter

You can find business proposal templates and sample letters online. You can create them from proposal letter templates, as well. To help you compose an effective and compelling letter, review the sections below.

Letterhead and Contact Information

If you're sending a physical letter, follow the general convention for formal letter writing. Your contact details, including business name and logo, should be at the top of the letter. You'll enter the date just below that. Then, include the recipient's contact information.

If you're sending the proposal through email, input your name and purpose for writing in the subject line as a substitute for a business header.

Address the Recipient

Start your letter with a formal greeting — research how your recipient prefers to be addressed. You can find this information from their company website if they have one or you can connect with them through social media platforms, such as LinkedIn.

Start With Background Information

The first paragraph of your letter should entice your recipient to keep reading. Introduce your business. Mention background information about your company, your qualifications, and the services or products you offer. Then, briefly mention the reason for your letter and why you would be a better choice than your competitors.

If you are sending the letter as a response to an inquiry initiated by the recipient, mention it for context. If you already have a business relationship with the company, remind the recipient of that, as well.

State the Purpose of the Proposal

In this part of your letter, discuss your intention for writing and what you intend to accomplish. For example, are you asking to work together on a project or are you offering a solution to an issue they've been having?

If you're writing to discuss a collaboration, make sure you provide clear details and basic terms of the arrangement. If you're making a sales pitch to offer products or services, discuss your understanding of their problem and your viable solution. Include relevant information as proof that you've done your research and you know how to help.

In this section, you'll also discuss pricing and the methodology. Elaborate how you plan to solve the client's problem or how a partnership will benefit the other company. If you have the statistics and numbers, you can add your proposal's short-term or long-term benefits. Make sure your goals are SMART.

  • Specific — clear and definitive (For example, if you're proposing to launch products together, mention that doing so will increase their sales by 50%. Back up your claim with case studies and calculations.)
  • Measurable — can be easily checked
  • Achievable — realistic and practical
  • Relevant — goals should be relevant to your client's current business situation
  • Time-bound — setting a timeline makes the goal specific and measurable

Request a Follow-Up

In this section, thank the reader for their time and increase your chances of getting a response by adding a call to action (CTA). A CTA is a straightforward action for your recipient to take if they'd like to proceed. It could be as simple as replying to your email, giving you a phone call, or signing and returning a form.

Close this section with a specific date and time when they can expect your follow-up call or email.

Don't Forget Supporting Documents

Remember to attach any relevant forms, case studies, and other documents to make your proposal letter more compelling. You can mention the attachments in your closing section. As an alternative, list all enclosures at the end of your business proposal letter.

At this point, make sure you proofread your letter for any grammar mistakes, spelling errors, and typos. Get another set of eyes to look it over and ensure that it is perfect.

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While you focus on sending out business proposal letters, let Skynova help with your bookkeeping.

Notice to the Reader

The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always do more research or consult with other professionals to ensure that you're taking the right step for your business.