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The Difference Between A Business Plan and Business Proposal.

The terms “business plan” and “business proposal” might sound similar, but they cover very different things. While these are both business development documents, the purpose of such documents is very different, which is exactly why it’s important to understand the difference between them and what they are bringing to the table.

What is a business plan? What is a business proposal?

A business plan is a broad, factual description of a company and any of its prospects. The business proposal, on the other hand, is all about bringing a quote and also a call to action. However, the business plan is more about presenting the company and showing facts.

Why do you need a business plan or proposal?

Creating a business plan is very important because it allows you to showcase the vision you have for your business. It includes a variety of things, like financial projections, how your business operates, how it will eventually generate revenue, and so on. This is also a guideline for you as a business owner since you have all the goals and objectives, marketing plan and market analysis, operating plan, management plan, and so on.

The business proposal, on the other hand, can show ideas that are presented to a partner or customer. It’s a simple document that focuses only on the most important aspects of the entire project. The business proposal is customized and it’s solely for a very specific audience, which is something to take into consideration. With a proposal, you normally develop a business opportunity, or you go ahead to solicit one.

What’s in the business plan? What about the business proposal?

The business plan will include financial projections, the marketing model, the business model, and industry and business descriptions. It can have the build-out plan, management team introduction, financial projections, and many others. This can be great if you want to present your business to potential investors. They get to know everything about your business, and that alone can be very helpful to them.

A business proposal includes a quick presentation of your company’s services and only covers the products relevant to the request for proposal. It might also have a quote for that particular project, including labor, delivery, and detailed materials. This is a marketing document, and not a business presentation like the regular business plan would be.


Each document is suitable for different purposes. While both of them are written with a call to action in mind, the business plan is more about convincing investors and lenders that your business idea is viable. Plus, it can serve as a guideline for your business. A business proposal, on the other hand, is more about getting a call to action that makes clients agree to a quote for a project. The scope is different, and that’s why it’s extremely important to understand when and how you need to use a business plan and a business proposal. Both of them are useful, but they serve different purposes!


Article by Chuma Obum

Photo by Marvin Meyer on Unsplash

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