business plan for your business in nigeria

Key Major Difference Between Business Plan and Business Proposal

Last Updated on July 1, 2021 by Ope Quadri

A business plan and a business proposal are the two documents some business owners use interchangeably, but they are not the same. There are distinctions between the two documents.

While millions of people out there may not distinctively spot the difference between the two documents, an expert in business development can tell if he sees a business plan and a business proposal.

The goals and purposes of a business plan are uniquely different from a business proposal.

Business Plan VS Business Proposal, Here Is The Difference

Business Plan Business Proposal
It contains the factual broad description of a company and its prospects It majorly focuses on sales and describes how a business owner will approach a project. It states the value of the project to the client.
It is a written presentation of facts It is a quote and intended to achieve a call to action
It focuses on expansion in a long term based on facts and figures devoid of elusive projections It focuses on what the prospective partner would gain in sponsorship and why he should embrace the partnership

The Need for a Business Plan

The executive summary of an agrochemicals states:

“Since Lion Ago Chemicals came into the agro-supply business, we have played a major role in reducing the number of fake agrochemicals in Mande and its environs.

Hence, due to the trust some of the customers have in our products, we want to expand to other towns and villages and cover the entire Plateau State.

“If farmers have access to quality agrochemicals, produce will be increased thereby contributing to the GDP. This will also reduce loss by the farmers. Hence, we want to make sure that they get unrestricted access to these agrochemicals.”

From this executive summary, you can see that a business plan documents vision for the owner’s business.

Not just that, it is also a road map of how the business owner intends to achieve what he has set out.

A business plan contains financial projections of the cost of establishing and running the business and how it plans to generate revenues. This is why you could be five years or more revenue projection of a newly established business.

A business that loses focus is most likely to derail from its plan and may run out of business.

A business plan has to be detailed and customer-focused (customer is one of the souls of a business). It has to give an insight into what the future holds for your business.

The Need For A Business Proposal

A business proposal is mostly partnership-focused which contains business ideas presented to a potential partner. It may be solicited or unsolicited.

In a business meeting, a director or manager may be commissioned to come up with a business proposal if his ideas support the goals and expansion of the company.

It may be internal of external. It may come from an outsider or from within the company.

They are limited in scope to a particular project or need because it generally has a specific audience.

Above all, the aim of a business proposal is to develop a business opportunity.

The Key Parts of a Business Plan

Business plans are not the same, but they must contain some key parts. Some of the parts is the executive summary, products and services, market analysis, marketing strategy, and financial planning which also contains financial statements, balance sheets, and future projection.

Most importantly, it must have a budget. That is costs related to staffing, development, manufacturing, marketing, and any other day-to-day costing of running the business.

The Key Parts of a Business Proposal

Some of the key parts of a proposal are a concise description of your company or project, services and products that are relevant to the goals of the RFP (request for proposal), planning, delivery, objective, activities, partnership benefits, and budget of the project.

Key Takeaways:

  • A business plan and business proposal are two different document
  • While a business plan describes a company’s core business activities, objectives, and how it plans to achieve its goals, a business proposal is more of a marketing document, designed to convince a prospective partner to do business by presenting a value proposition and a call to action.
  • A business plan is a roadmap for startups for expansion and ways to maximize profit

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