How to Write a Proposal Letter

What is a proposal letter?

Most commonly, a “proposal letter” (a term which has a number of overlapping meanings) is a document that acts as a full proposal for small projects, where an in-depth proposal, with a table of contents and extensive project details, is not required.

Alternatively, a proposal letter is sent either as a precursor to a comprehensive and more detailed business proposal or included as part of an actual proposal, used as a cover letter to engage potential prospects.

The first definition will be the focus of this article. Proposal letters are shorter, abbreviated forms of complete proposals. Nonetheless, they follow a similar, albeit more concise, structure.

There’s also one more point worth noting. Sometimes, the terms “proposal” and “proposal letter” are used interchangeably. In such cases, a “proposal letter” is meant to be a full proposal, and you should structure and write your document accordingly.

How do you write a proposal letter?

You should always follow any specific guidelines given by the recipient, especially if you are responding to an RFP (request for proposal). Generally speaking, you can use the following structure when crafting a proposal letter:

Introduction and background

Set the context for the letter by providing a little background information in the first paragraph. If you have already interacted with the recipient, mention this in the opening statements. You may have discussed the prospective client’s problem and agreed to a rough set of objectives. Allude to this conversation and briefly reiterate (in a few sentences or so) why you are well-suited to provide a solution.

Statement of the problem

You can include this as part of the section above, or you may want to dedicate a few paragraphs to it, depending on the extent of the problem.

Goals and objectives

It’s best to be as specific as possible when describing goals and objectives. Objectives should be outlined in list form, preferably with figures attached. It is better to say something like, “We will increase productivity by 30% over three months,” rather than, “We will significantly boost productivity.” You may also want to provide details about the methods you will utilize to achieve these objectives.

Evaluation

How will customers be aware of progress? Will you send a monthly report? Will they have access to a real-time analytics dashboard? Who will the main point of contact be? Which metrics will you use to measure success? Paint a clear picture of how you will ensure that your recipients know the project is moving forward in the right direction.

Budget

It’s not usually appropriate to give a full breakdown of costs in your cover letter, but you should give an idea of the budget. The cost of a project is a major factor in the decision-making process, so it’s important to include this information.

Contact information

Providing a full set of contact details at the end of the letter, including a phone number and email address, can be incredibly helpful if clients want to call or email you directly.