Do You Need a Business Plan or a Business Proposal? Here Are 5 Key Differences

Whether you’re embarking on your next business venture or simply approaching a new marketing scheme for a business idea, how you organize your thoughts into a document that you and your stakeholders can refer to is critical to your success. However, whether or not you choose to use a business plan or business proposal will depend on your ultimate goals. To make the distinctions between a business plan and business proposal clearer here, we will cover five main differences. 

Call To Action 

A business plan can, but doesn’t necessarily need to, call the readers of the document into action. Typically a business plan is detailing how the business is organized, it’s status, objectives, and resources. Although it is the primary document used to apply for loans, it doesn’t have to be distributed for the purpose of soliciting action from anyone at all. On the other hand, a business proposal is making a suggestion in detail about certain actions that should be taken to deliver a particular result.  


The length of a business plan can be 25 to 50 pages, depending on the type of business and what stage the business is in (i.e. startup stage or growth stage). A business proposal may only be 1 page or can be 20 pages. It all depends on a number of factors including what you are selling, who you’re trying to sell (or propose) your ideas to, your relationship with the potential client (i.e. length of time in business with the client), and your ultimate goal. 


Although the business plan and the business proposal have differing lengths, they have specific structures that are typical for each document. Normally a business plan will have an Executive Summary, Products & Services, Financial Status, , Competitors, and Breakeven, sections (to name an abbreviated list). One the other hand, the business proposal usually has sections titled much differently, such as the Introduction, Service Description, Case Studies, Terms and Conditions, and Timeframe. 

Social Proof

It’s critical to support the claims you make in both a business proposal and a business plan. What separates the two regarding supporting your claims is that business proposals typically include at least one form of social proof such as case studies and customer testimonials. 


A business plan is an overall plan for a business that details the organizational structure, resources, and vision of a company from the executive level. It is often used to have a referencing document for the stakeholders and stakeholders of a business while governing a company, or as a tool to detail a company’s vision to seek funding. A business proposal on the other hand is a document that organizes how a particular project will be carried out, the benefits of the project, and a call to action from certain prospects to be a part of that project.

By now you should have a pretty clear understanding of the differences between business proposals and business plans. If you are starting a new business or requesting funding to grow an existing one you will need a business plan, which you can make easily using business planning software like Business Plan King. If you’re attempting to pitch a business idea, or solicit business from a potential client, you will need a business proposal. Either way, do your best to make the best business proposal or business plan possible. Your bank account will thank you.  

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