Business Plan vs. Business Proposal - What's The Difference?

By William King

Business has a lot of words that often confuse people. People tend to mix their meaning and are unable to differentiate them. Business plans and business proposals are amongst these misleading terminologies. People often think of them as one and the same thing. These plans and business proposals are totally different in their use and nature. Both are documents used in business but both have different purposes.

These plans reflect the long term plan of a business. It reflects the way a business plans to establish itself over a longer period of time. These proposals on the other hand are not meant for longer term. They are an intention to work out a business venture with another business. The intended audience of both the documents also varies significantly. The business plan is intended for the management as well as the lenders and many others.

The business proposal is however a document that is only intended for the other business with whom a business wishes to enter into a joint venture with. Then there is a difference of need. These plans are needed for establishing a guideline for standing up a business from scrap. It usually defines the directions the business has to follow step wise in order to achieve that. These proposals are really not for that purpose.

They are short term and only needed to communicate a business's intentions to work with another business. These plans often help to raise the required capital needed for your venture. Business proposals don't do this sort of work. These proposal can be intended or unintended as well. A large public or private company may give an advertisement about pursuing an adventure and want to get third parties involved through an open bidding process.

Unintended proposals are those in which the large organization is reached by the third party to pursue a venture with them in doing the business. In both cases the purpose is quite different from that of a business plan.

About The Author - William King is the director of UK Wholesale Suppliers and Wholesale Dropshippers Directory. He has 18 years of experience in the marketing and trading industries and has been helping retailers and startups with their product sourcing, promotion, marketing and supply chain requirements.