Writing a proposal for highly complex high-value, high-tech, and high-risk industries like aerospace, defense, maritime, information technology, high tech industries is a big challenge.
If you’re working in one of these businesses, you know that each business deal is different.
It requires customizing your product or service for a particular customer or a particular product or service.
In this post, I will share my experience and thoughts on how to successfully write a proposal and create a value proposition.
So, unlike other businesses, you can’t simply publish your catalog or mail your brochures, and send your standard terms and conditions to land deals. You actually need to write a tailored business proposal.
Send us your proposal and we will proofread and edit it or help you write it based on the clear customer requirements you received.
How to Write a Business Proposal with a Strong Value Proposition!
Proposal writing starts ideally with either your customer requesting you in a request for a proposal to make an offer. If you’re not so lucky (yet), it could start with you or somebody in your company requesting to bring out what is called an ‘unsolicited’ offer.
Of course, you already have most, if not all, of the information you need. Data about the customer, their needs, and requirements. The problems they are trying to solve. Because you know your business and what you have to offer to help your customer.
Unfortunately, my experience is that this (knowing your customer) often is not the case. Companies rush into sending out proposals without actually spending time listening to the needs and problems of the customer or defining them properly in technical specifications or statements of work.
In this phase, and before negotiating the contract terms with your customer, you should think about financial and contractual risk. Can you mitigate the risk in the financial reward on the project? What if the risk happens: what will be the impact on the profitability of your company?
And, especially when the customer is calling the shots, and you are uncomfortable with the contract terms submitted by your customer, can you explain to your customer why you cannot accept the risk and propose some changes. And does or will the customer accept? Do they accept a higher price to account for the risk?
And maybe you should be prepared to walk away if the customer does not appreciate a contractor like you who understands projects’ risk profiles.
If you don’t ask yourself the above questions, this is a sure way to lose deals or, if you by chance with them, to suffer from contract value leakage after the signature of the contract.
Maximizing your value or eroding it already starts before the first offer is submitted to the customer by bad preparation.
Moreover, developing the proposal and value proposition is the phase in which you have the best and only shot to set the ceiling to maximize profit over the lifetime of the contract.
See also my post here on the importance of well-written statements of work and the very first chapter in the chapter on Proposal Writing Steps here below.
So setting up a business proposal needs all of your attention.
How are Proposals Written?
Writing a business proposal is a step-by-step process with a specific sequence to follow. In the next paragraphs, I will show how I work.
Gathering information before writing the proposal
Before writing a proposal you should take time to prepare. Your preparation process should be used to identify the key concerns or decision points, which are formatted to be easily found.
Your first and absolutely the most important task in preparation for a proposal is to understand your customer’s needs, requirements, issues, limitations, and concerns. In other words, what questions will your potential customer want you to answer? Which problems do you need to solve?
For each proposal, you need to do research to find out more about the goals for the proposed project. If you do not know the customer, you need to find out about their business history.
The Request for Proposal (RFP) may also help you. As does the information you can find on the customer’s corporate website. But normally in our industries
Nothing replaces knowing the customer, having personal relationships and doing robust account planning first to enhance your competitive edge and bring in deals based on winning proposals. Unless, you’ve just started your company, in our industries receiving an RFP should never be a surprise.
And, if you need further clarification about anything, don’t second-guess, just call your contacts at the customer and ask for it. They should be more than willing to give you the information you need.
After you feel that you understand the customer’s position, it’s time to begin your proposal writing by drafting the cover letter for your proposal.
An introductory letter or email is valuable. Your letter should provide an introduction to the proposal and the benefits to the customer. It can also provide an opportunity to invite the next action from the proposal, such as a phone call or review meeting.
If the customer doesn’t already know you, which as I explained above you is not the best start, you’ll start with a cover letter introducing yourself, explaining why you’re submitting a proposal now, and supplying all your contact information. Explain why you have the expertise and experience to deliver what the customer requires.
If you are offering labor-based services provide factual information about your expertise, education, training, credentials, certifications, and capabilities. Also, describe what similar projects you have for other customers. If possible, provide an overview of customers you work or worked with. You’ll also want to tell about your company if this is the first time the prospect will get a proposal from you.
I would personally never do that in the proposal itself. I prefer keeping the proposals ‘clean’ and factual. No marketing texts, and pictures, and graphs only when it is really relevant to describe matters in the proposal.
You can add a short ‘needs assessment’ description here that describes what the customer wants to show that you understand what your customer is seeking.
Proposal Writing Steps
We then start with writing the proposal itself.
In order to understand how to format a successful proposal, we need to understand how the customer reads one. So if your industry uses the same formats. In aerospace, you will see that proposals and contracts look very much the same. whether you are in the US, in Europe, or in Asia. Boeing and Airbus have long tome set the standard here.
You can choose other or different formats, but in the case of complex products or services, it is better to write proposals as a contract waiting to be signed. Which I actually always do, if only to save a lot of time, not having to rewrite everything into a contract once the proposal is accepted.
Customers may have document length or other instructions. Some RFPs must be submitted with proposal segments directly answering to RFP questions. They must be followed. The customer has provided them not without reason. You need to ensure your document properly complies with your customer’s internal review process.
In our industries, we are used to working with the “business terms first” principle. This is my preferred way of organizing proposal and contract content so that core commercial terms – which require resources or action – come first, and all other terms only later based on the fact that they come into effect only if something happens or fails to happen.
The focus is on performance first (scope, goals, price, payment, delivery). The clauses about risk and non-fulfillment of obligations (liability, liquidated damages, indemnifications, remedies, choice of law) follow later. You start with the positive (business, operations) and end with the potentially negative (legal). The term was coined by IACCM (now called ‘World Commerce & Contracting’ or ‘WorldCC‘).
The ‘business terms first’ pattern can be used also to organize contract topics and clauses: present actions, rights, and responsibilities first; introduce what-ifs and exceptions later.WorldCC
Moreover, the ‘business first’ approach in proposal writing and contract drafting is also quite the standard way of working in industries like aerospace and other industries I have worked in. It also shows that you see the proposal or contract as a business tool, rather than a legal tool.
Making your proposal ‘contract-ready’
I like to use a format which in the end will be similar to that of the contract, including annexes so that the customer only has to accept and countersign to turn the proposal into a valid contract. This saves valuable time for you and your customer. However, in that case, you need to include a complete set of terms and conditions as described below.
In the event you want to take a two-step approach and keep the proposal simple, and draft the contract later after the customer has accepted, you can limit yourself to the sections marked with an asterisk below.
* Sections with an asterisk MUST be included in any proposal; the other sections are optional for a proposal but should be added when drafting the contract.
1. Title Page*
So next, you create a Title Page and name your proposal in a descriptive way.
The title page is flexible in its formatting. It can be any design, so long as it is professional, legible, and appropriate to the industry. Examples might be “Proposal to Retrofit Helicopter” “Spare Parts Offer” or “Contract Lifecycle Management SAAS Proposition”.
Again, depending on the industry you’re targeting, you can see whether you can use more attractive titles to highlight the benefit offered to the client. Like “Proposal to Reduce Maintenance Costs”, “Performance-based Lifecycle Support Offer”.
You can also use subtitles to highlight benefits:
Title: Repair & Overhaul Training service
Subtitle: Reduce Costs by Training the Customer to do Repair & Overhaul Themselves
2. Executive Summary*
It’s almost guaranteed that the initial review of the document will be a quick read. The customer will be trying to quickly understand the proposed solution, price, and other key details. In the executive summary, you list the most important points you want the customer to read.
Start on the next pages by adding a chapter for the executive summary that you will write once you have finished the first draft of your proposal. This is not needed if it is a simple proposal. But if it has many pages and annexes or appendices, you should have one.
Searching in your proposal a document is much easier with a table of contents. You can add a table of content on the next page. The table consists of each heading and subheading and the associated page number. Personally, I prefer to have the table of content after the title page, so before the executive summary.
3. Scope and Requirements*
On the next page, you start with the most important sections, which is what you are actually selling (sometimes also called ‘subject matter of sales’). Here the types, quantities, or activities that are sold will be described.
In the case of an existing product (including ‘off-the-shelf’ software) or standard service, you often may already have a technical specification or description of activities that you can refer to or attach as an annex or appendix to your proposal.
In the event, it is a non-standard product or bespoke software development or for instance a tailored service or a project, you need to be more specific. For this, it is better to create a separate annex or appendix with the ‘statement of work’ if it is going to take more than one page to describe the works to be done. In the scope clause, you then add a reference to the annex or appendix.
SOW or Statement of Work*
You will factually describe in the statement of work in detail the needs of your customer and the requirements for the product, service, or project you want to propose.
Your task is to describe in detail in the statement of work what you are offering to do, keeping in mind that your goal is to show how you will address the needs, desires, and any restrictions described in the cover letter or proposal.
The topics here will vary according to the nature of your business and the specific project, but you’ll want to include here the solutions, services offered, products, customization needed, solutions, options, components, design, engineering, prototypes, quality control, manufacturing, testing, coordination, project schedules, roles, and responsibilities, etc.
You might also want to add wording on goals and objectives, background, concerns, limitations, budget constraints, and include all the topics you need to show that you understand what your client is seeking.
Generally speaking, the more specific you can be, the more credibility you will have with the potential customer because a detailed plan shows that you thoroughly understand the requirements of the project and have thought about all the potential concerns and pitfalls.
Pricing, payment schedules, delivery, acceptance procedures warranties other terms and conditions I prefer to include in the main part of your proposal, or in separate annexes. My experience is that they are too important, all have legal implications, and are very much which should therefore not be hidden away in a long statement of work. Moreover, often the writers of technical specifications and statements of work are not qualified or skilled in writing legal, contractual, or legal texts, so I prefer them to focus purely on factual descriptions of the goods, services, or activities they are going to perform.
4. Price and Payment*
- Purchase price*
- Payment terms*
- Dates of delivery*
- Terms of delivery*
And in the case of goods:
- Test and acceptance procedures
- Additional work and changes
- Transfer of title and risk
6. Liability and remedies
- Delay in delivery
- Force majeure
- Termination of the contract
6. Other obligations*
- Intellectual property rights and 3rd parties’ rights
7. Final clauses*
- Applicable law*
- Proposal/contract documents and order of precedence*
- Contact persons*
- Contract renewal
- Contract amendments
8. Annexes or Appendices*
Statements of work, delivery schedules, payment milestone overviews, price revision formulas, acceptance procedures, and other sections which take more than one page to describe, are added as annexes or appendices to the proposal. The relevant clause then contains a reference to such annexes or appendices.
You most probably submit your proposal in a PDF format. The least you should do is make it readable with Acrobat Pro. you can create a linkable table of contents. That way the reader can easily jump to a section of the proposal. You can view a tutorial on how to do this in Microsoft Word here.
Edit your proposal language to be sure it reads smoothly and is free of misspellings and grammar errors.
At this point, you have written the basic draft of your proposal. Now, before you send it out, you have two more tasks to complete. First, you need to proofread every single page. Also, the statement of work has to be read by your contract or legal people. For this step, it’s usually best to have at least use someone other than the proposal writer proofread, because every writer misses errors in his or her own work.
Make sure each page looks neat and professional, too. Probably you already have thought about your brand, company logo, fonts to be used. Ideally, you are already able to create proposals with pre-written templates, samples, graphic design options, and automation software.
Print your proposal for hand delivery or package it into a PDF for delivery via email. Sometimes making an extra effort to send a proposal via special messenger or delivering it yourself can make a big impression that will help you beat the competition.
Using Proposal Templates
Another handy tool for standardization of your proposal process is working with templates. This can save time. However, templates should be used with caution. Each proposal must be drafted to meet your customer’s needs.
A business proposal needs to look great. It also needs to be accessible and client-ready.
Using templates can help you save time, but you still need to customize them.