Understanding the three basic types of business proposals will help you develop better, faster and cheaper business proposals.

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The World of Business Proposals

Understanding and working with the three types of business proposals is crucial to helping us develop better proposals, use our time and resources more efficiently, and win more business. Once you are clear on what type of proposal you are doing, see my separate blog on Tech Tips for Developing Better Proposals.

There are three types of business proposals and buying situations:

1. Formally solicited. The buyer issues particular requirements about the products or services they want, and you, the supplier, respond very specifically to them.
2. Informally solicited. The buyer asks you, the supplier, for a proposal but hasn’t provided specifications or criteria for what they’re looking for.
3. Unsolicited. The buyer has not requested a proposal, and you, the supplier, have decided to send the buyer a proposal.

Over the years, I have seen many small businesses and suppliers submit the wrong type of proposal for the buying situation which takes up much of their time and doesn’t win them business.

I often see suppliers use a relatively generic “About Us” proposal in all three buying situations.

Usually, this means the supplier doesn’t win the formally solicited contract opportunity because they haven’t provided the right information in the right way, in enough detail or with enough validation. The generic proposal doesn’t often work with the informally solicited opportunity either because the supplier hasn’t demonstrated they deeply understand the buyer’s requirements. In the unsolicited proposal type, the generic “About Us” type proposal still doesn’t work because, typically, it is too long and has too much information for the buyer’s level of interest.

I strongly suggest that you move away from a generic proposal that you edit for different proposal-type opportunities and instead move to a content library where you can cut and paste different types of content to suit different situations.

Formally Solicited Proposals

Formally solicited proposals are written in response to a buyer releasing a formal request. The catch-all term for these formal requests is an Rfx (meaning Request for xxx). Rfx’s include Request for Proposal (RFP), Request for Quotation (RFQ) and Request for Information (RFI).

Government, publicly funded organisations and large commercial organisations are often required to use Formally Solicited Proposals (FSPs) for purchases over a certain amount.

Typically, as part of the Rfx, the buyer provides precise guidelines or requirements about the products or services they wish to buy and or outcomes they want to achieve, the type of company or companies they wish to buy from, and how they will evaluate the proposals.

Based on my experience and feedback from buyers and businesses, here is some helpful information for small businesses working with buyers using a Formally Submitted Proposal (FSP) system.