No Limits Ladies.com

Entrepreneurs often ask me "When do I need a business plan and when do I need a business proposal?" They are two very different tools so it is important that businesswomen and entrepreneurs know when to use one and when to use the other.

So I looked around the web for an expert to clarify this for us. I figured... shoot for the top, ask June Campbell, author of not only a guide to business plans but also a guide to business proposal. Two different guides, two different proposals.

Much to my delight, she happily explained the difference.

"There is a HUGE difference between a business proposal and a business plan. A business plan is the detailed document you create when you start a new business -- or when you modify and update your planning for an existing business. A business plan describes every conceivable aspect of your business-- from product description, market research, SWOT Analyses, delivery methods, procurement methods and very importantly, a detailed financial analyses. When you have completed a business plan, you have addressed every foreseeable issue that could impact on your business success for the next five years. Failing to prepare a thorough business plan is undoubtedly the number one cause of business failures with a startup business.

A business proposal is a document that you prepare when you are proposing some form of business arrangement to another business or organization. You may be initiating the proposal, or you could be responding to a communication from the other business in which they indicate they are seeking someone to provide a certain product or service. A business proposal may be short or long, depending on the situation. It contains topics similar to that in a business plan (including a budget). However, the financial analyses addresses the proposed venture, not your business as a whole -- and you do not necessarily include all financial information pertaining to your proposal. A business proposal document is essentially a sales document. You are selling the idea that the other company needs the described product or service and that you are the best choice to provide it."

Next week, June will let us know what the number one mistake is when writing a business proposal. For those that can't wait (okay, I couldn't wait), check out her articles on http://www.nightcats.com/ including 11 Tips For Writing A Business Proposal. Be prepared to spend a day or two (especially if you are interested at all in writing for magazines like I am).