In my previous posts, I have made a comparison between a business plan and a feasibility study and also a business plan and a proposal. But in this particular article, I’m going to be comparing these 3 ‘confusing’ documents.
I said ‘confusing’ because a lot of people get confused and don’t know the difference between these documents and the purposes. As the purpose is different, so is the outlines or elements of each of these business documents
This article will be focusing on these 3 sections below one after the other:
So lets start with what is a business plan, feasibility study and a business proposal
What is a Business Plan?
Business plans are blueprints for implementing actions that have already been deemed feasible by the company’s management. So a business plan is like a roadmap for your business that outlines goals and details how you plan to achieve those goals.
Business plans map out the direction a company intends to take to reach its revenue and profit objectives in the future. They are a compilation of numerous decisions made by the management team about how the company should be run. A business plan is done after a feasibility study has been carried out. If the recommendation of the feasibility study says negative, then there will be no need to venture into the business.
What is Feasibility Study?
A Feasibility study is done to determine whether a proposed business has a high enough probability of success that it should be undertaken. A feasibility study is carried out first in order to know if the business will be viable before venturing into it. Before a company can invest in a business or launch a new product, a feasibility study is done to determine if there will be a return on investment.
According to Rochester.edu, a feasibility study can be defined as “a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes, and assessing the range of costs and benefits associated with several alternatives for solving a problem.”
What is a Business Proposal?
A business proposal is a business-to-business document used to provide specific goods or services to a prospect at a defined cost.
A business proposal contains information that you present to a prospect/client proposing a business arrangement.
There are two main categories of business proposals: invited and non-invited. The invited business proposal is when an organisation, individual or government invites a company or an individual or the general public to submit a proposal. The proposal can be for the purpose of supply of equipment or anything or to bid. Sometimes they advertise public tenders inviting contractors to bid. You will be competing against all bidders that noticed the posting and responded. Similarly, some businesses will send Requests for Proposals (RFPs) to a selection of businesses that they are willing to consider as a potential supplier.
A non-invited proposal is when you submit a proposal to an individual or an organisation without them inviting you. Is more or less unsolicited proposal. With this kind of proposal, if they like they would review and get back to you, but if they don’t like or it doesn’t fit into what they want, they would reject it.
Purposes of a Business Plan
A business is needed for two primary reasons. First, as a guide and to monitor your business progress. See if you have achieved your milestones and meet your targets. It serves as a roadmap… A business plan gives you a workable strategy to follow for the period covered by the plan (may a year or 3 years or 5 years plans). Your business plan is your blueprint to success — it outlines the steps to move from business idea to business success.
Secondly, if you are hoping to raise funds through a business loan, a venture capitalist, an angel or an incubator, don’t even consider approaching these moneylenders unless you have a thoroughly researched business plan in your hand. Experts estimate that it takes approximately six weeks to develop a business plan, so churning one up the day before your appointment with the banker won’t work.
A business plan is pivotal to the success of your business. A business plan contains an execution plan and revenue model etc. This is what lenders or investors want to see.
Purposes of a Feasibility Study
A feasibility study gives a conclusion or recommendations. The feasibility study helps determine whether an idea or business is a viable option. Therefore, a feasibility study is done first before investing a dime in the business. Before considering approaching investors, you must have done your study to know that the business is feasible before taking any decision. That is why a feasibility study gives a conclusion or recommendations.
Purposes of a Business Proposal
A business proposal is used to convincingly articulate the understanding of the potential client’s problem, as well as the reasons your company is the best choice to execute the project.
Common elements/ Outlines
Elements/ Outline of a Business Plan
- Executive Summary
- Business/Company Overview
- Market/Industry Analysis
- Operation Plan
- Management/Personal plan
- Sales Forcast
- Financial Plan
- Appendices and Exhibits
Elements/ Outline of a Feasibility Study
Table of Contents
Product or Service
Marketing and Sales Strategy
Management and Personnel Requirements
Critical Risk Factors
Balance Sheet Projections
Income Statement Projections
Cash Flow Projections
Capital Requirements & Strategy
Recommendations & Findings
If you need a standard business plan, check out the list of Business Plan we have
Do you want us to develop a unique business plan for you, check out our business plan service page
I will love to hear your thought. Kindly use the comment box below to leave your comment.
3 thoughts on “The Difference between a Business Plan, a Feasibility Study, and a Business Proposal”
you’re really doing a good work. ✌✌
Thanks so much Bassey.
Good break down
what are the element/outline of a business proposal