How to Write a Proposal Letter (With Template and Example)

Updated July 31, 2023

How you communicate in business environments directly impacts how you and your ideas are perceived. A proposal letter is a written form of communication that can have a major effect on your career. When constructing a proposal letter, your ideas must be clear, informative and persuasive.

In this article, you will learn how to write a compelling proposal letter and structure it properly.

What is a proposal letter?

A proposal letter is a professional document that introduces your business ideas to an important recipient who holds a decision-making role. A proposal letter can introduce an idea to try to convince the recipient to read a full document with supporting information, or it can be the proposal itself.

When do you use proposal letters?

Proposal letters can be used for a variety of endeavors, including small business projects, like requesting a loan or suggesting a new marketing plan to your manager. Proposal letters can also be sent as a brief precursor to a larger, more-detailed business proposal, like a government grant for a research project.

Why are proposal letters important?

Proposal letters are important because they are normally the first impression your recipient has of you and your business. A clear and influential letter will increase the likelihood of your audience favoring your proposal and moving forward with it.

How to write a proposal letter

What you include in your proposal letter will vary based on the project. Here are some seven steps to follow when composing a proposal letter:

Introduce yourself and provide background information.
State your purpose for the proposal.
Define your goals and objectives.
Highlight what sets you apart.
Briefly discuss the budget and how funds will be used.
Finish with a call to action and request a follow-up.
Close the letter and provide contact details.

1. Introduce yourself and provide background information

The goal of your proposal's introduction is to gain the interest of your reader. This paragraph should include basic information about your company and an overview of the topic to make it clear what the recipient will be reading. If you are following up on a meeting, briefly mention the meeting in the opening statements for context. If your business already has a relationship with your letter's recipient, mention this as well.

2. State your purpose for the proposal

Your purpose for the proposal is what you intend to accomplish, or what problem exists that you intend to fix. A proposal for a business arrangement would provide clear details and basic terms of the arrangement, while a proposal to redesign a company website would discuss your understanding of their current website issues.

3. Define your goals and objectives

Describe the long-term outcomes you plan to meet and the objectives you will establish to get you there. Be very clear and include specific figures if possible. For example, instead of, "We will increase our productivity significantly with this loan," you might write, "We will increase our productivity by 40% over the next year with the loan amount we have requested. We will increase our productivity with the addition of two new machines and four additional employees."

4. Highlight what sets you apart

If your proposal is the answer to a company's problem, showcasing your valuable assets can help you stand out. State some of your special skills related to the project and the reasons you are the best fit for the job. This might include experience with a similar issue or outlining a unique process that gets great results. If your proposal is for a business venture, highlight a few factors that differentiate your ideas from others. When highlighting your key differentiators, you could use bullet points to list your features so they're easier to read.

5. Briefly discuss budget and how funds will be used

Cost is a major factor for decision-makers. Depending on your reason for writing a proposal letter, you may need to include details on how you will use a loan or how much your project will cost investors. You will probably not need to include a full account of costs, but providing a general idea of the budget will give investors a better look at the project.

6. Finish with a call to action and request a follow-up

A call to action is a request for your recipient to take additional steps and creates an urgency for them to move forward. This can increase the chances that they will respond. This action might be to simply reply to your proposal if they would like to speak further.

Also, including your intentions to follow up with them makes it clear you are serious about your proposal. Let them know the specific day you will contact them again so they can expect your call or email.

7. Close the letter and provide contact details

Thank the recipient for their consideration of your proposal and encourage them to contact you if they have any questions. End the letter with a professional closing, such as "Sincerely" or "Regards," followed by a comma. Type your name a few lines below, then sign your name above your typed name.

Proposal letter template

Here is a template you can use as a general point of reference to ensure you include all the important information in your next proposal letter:

[Your name]
[Company if applicable]
[Your address]

[Date]

[Recipient's name]
[Recipient's company]
[Recipient's mailing address]

[Greeting]

[This first sentence should include your name and your company. Mention any previous meetings regarding the topic or any previous company history. Give a brief overview of what your proposal is about.]

[In the second paragraph, state the purpose of your proposal. Include specific information to make it clear.]

[In the third paragraph, identify the specific goals you intend to reach and the objectives you have set up to accomplish those goals.]

[In the fourth paragraph, provide an overview of what makes your mission unique. In the following sentences, support your claims with specific examples of previous experiences and successes. Use numbers to quantify your success whenever possible.]

[In the fifth paragraph, briefly discuss how you will allocate your loan or grant, or give an overview of a project's cost to the investors.]

[In the sixth paragraph, give your recipient a call to action to urge them to act on your proposal. Include when and how you will follow up with them.]

[In the first sentence of your closing paragraph, express gratitude and thank the recipient for their time reviewing your proposal. Include your contact information and let them know you are happy to answer any questions.]

[Sign off]

[Signature]

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Proposal letter example

Here is an example of a proposal letter for a business plan:

Sarah Johnson
Pro Design LLC
555 Silver Lane
Raleigh, NC 27513
Dec. 5, 2022
Garrett Williams
Marketing Masters
1443 East Drive
Raleigh, NC 27514
Dear Mr. Williams,
Our team at Pro Design enjoyed discussing the opportunity to work with you on developing a new website for your company. We began working on this project last week after our initial email, and are submitting a proposed action plan for your review.
On Dec. 10, we discussed your growing concerns regarding the design of your website. The difficult navigation and lack of mobile compatibility were slowly affecting customer acquisition. By making the interface more eye-catching, user-friendly and compatible with both Android and IOS, we can increase the amount of time potential clients spend on your website, resulting in a greater number of leads and clientele.
Per the goal you expressed in the meeting, our objective will be to increase your clientele by 30% and increase your leads by 40% within the next year. This goal will be accomplished through the following steps:
1. Researching your ideal clientele to define your company's branding
2. Working with your marketing team to develop consistent messaging to target your ideal client
3. Rebuilding the website from the foundation using the most user-friendly features
4. Creating a flawless mobile design that draws mobile consumers in
5. Seamlessly incorporating your branding and messaging with the new interface
Our company completed a similar project for a hotel in Atlanta eight months ago. Our design kept users on their website 150% longer and resulted in a 40% increase in sales over the course of six months.
For a project of this caliber, we estimate a budget of roughly $12,000 to $15,000. We can discuss the plan in more detail if you choose to proceed, and can adjust the budget based on your specific needs and our recommendations.
If you would like to move forward with our proposal, please send me an email so we can begin discussing and planning the next steps right away. I will follow up with you through email next Thursday, Dec. 16.
Thank you kindly for reviewing our proposal. If you have additional questions, I am available by email at sjohnson@gmail.com or by phone at 777-555-0100.
Sincerely,
Sarah Johnson

Frequently asked questions

What are the four C's in writing a proposal letter?

According to Rutgers University, the four C's of a proposal letter include:

Clear: Make your proposal letter clear by quickly identifying your goals. Follow a logical organization to make your proposal letter easy to scan and understand.
Concise: Provide a good mix of research and purpose. Highlight the essential points by choosing a few key elements to include.
Comprehensive: Include all necessary details or facts that may influence your reader's decision. Provide enough information on your project goals that readers of all experience or knowledge levels can understand.
Compelling: Highlight the importance of the project and any time constraints it may have. Re-read your letter and evaluate if its goals and timelines are clear. Conclude with a clear call to action that encourages the reader to contact you.

What makes a good proposal letter?

A good proposal letter includes a clear purpose, a direct solution and a strong call to action. It includes sufficient details about you, your experience and how you plan to solve the problem listed. An effective proposal letter includes only relevant details and information to help decision-makers determine whether or not to fund your project.

Highlighting unique experiences or approaches to problem-solving can also make your proposal letter more competitive. Make sure it's clear why you're the right choice for the project and what skills you offer that others don't.

What are the three main sections of a proposal letter?

You can divide a proposal letter into three main sections, the problem, its solution and your qualifications for solving the issue. Consider the problem to be your "why." This is the purpose or reasoning for the proposed project.

The problem is the issue or task you hope to solve. Listing clear, direct and time-sensitive goals can help you demonstrate the problem. Your qualifications are the specific experiences or skills that you or your team have that can solve the listed problem.

How long should a proposal be?

There's no recommended minimum or maximum length for a proposal as long as it includes a clear focus, problem, goals and experience. A proposal letter's length may range from one page to more than four pages. The extent and length of your proposed project may determine the length of the proposal.

Some employers or organizations may have set requirements for proposal length. Inquiring about limits and expectations ahead of time can help you determine the appropriate length of the proposal. If your proposal exceeds a single page, make sure you include a consistent business header on each page.