The real differences between a business plan and a business proposal

There are some very real differences between a business plan and a business proposal. Not only will the audience be very different but the process of creating the document and the type of thinking needed to secure a successful outcome will also be vastly different. A business plan template and a business proposal template for the two documents should be easily found and this may help you to understand the difference more clearly.

Some of the most important distinctions can be made by being clear on the issues below.

1. Know what a business plan is. A business plan is drawn up by anybody who wants to start up a business. In the business plan, the vision, mission and goal of the business should be laid out. Business plans map out timetables on when to expect returns on your investments, marketing strategies to further reach out to as many clients as possible, and predictions on future capital infusion.

2. Know how important a business plan is. Capital is the lifeblood of a business while the business plan is the mechanism that assures that everything functions as planned. Even a small business venture will need a business plan which the owner can check periodically to guide him and enable assessment of his venture's performance and troubleshoot if any is needed.

3. Know what a business proposal is. In general, proposals are in the form of offers made by a seller to a buyer.

4. Know the various types of proposals. Firstly, there is the unsolicited proposal where a seller introduces a product or a service and is usually in the form of fliers or brochures. Secondly, there is the informal proposal. For instance, you plan to have a team building activity for your employees and you call different resorts to inquire. They then send you an email detailing their rates on use of rooms, group meals, etc. And lastly, there is the formal proposal. This will usually entail bidding. Say your food manufacturing business will need additional equipment to meet increased product demand. You then inform these equipment manufacturers or sellers that you're accepting proposal bids to get the best price possible. Formal proposals are more complex and will need detailed information on how the seller plans to meet the buyer's requirements, cost summary and implementation schedule.

Creating the business itself will of course not be a straight forward task but once you have the business plan sorted out, at least you should have a very clear idea on exactly where you are going as well as some of the strategies on how to get there.