CHAPTER ONE

INTRODUCTION

1.1 About the report

The students were assigned the group assignment by the faculty member of

Management Skills Development. Our group which consists of four students was

assigned to prepare report on the Business Proposals. The report discusses about what

actually business proposals means? What is its type? Why are they important? What

are the essentials of business proposals? Is business proposal and business report same

thing? How to prepare the business proposal? What are the common misconceptions

about the business proposals?

1.2 Objective

The objectives of preparing this report are as follows:

The objective is to get theoretical concepts about business proposals.

To know how to prepare business proposals

To know why business proposals are so important

To facilitate group work among the students

1.3 Methodology

There is no use of primary data in the report. The secondary sources of data are used

while preparing the report. The necessary information need is taken from various

books, and websites. All the necessary information is taken after sorting the data. The

members of the group at first gathered the study materials from various sources. After

that, they sat together to discuss on the topic. After days of discussion and research,

this report had been prepared.

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1.4 Limitation

Preparing report about busiess proposal was a group effort. Everybody contributed

their parts in the good manner. It was not an easy task to prepare the report on

business proposals. There was always difficulty in finding needed information. The

found information was also subject to credibility. However, we were able to overcome

those difficulties and prepared the report.

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CHAPTER TWO

BUSINESS PROPOSALS

2.1 Meaning of business proposals

A business proposal is a written proposal presented from a vendor that is intended to

elicit business from a prospective buyer. It differs from a business plan, which is

primarily constructed to obtain start-up capital by detailing the organization and

operational aspects of the business to demonstrate its profit potential. A business

proposal is also unique because it contains much more than figures and statistics

represented by pie charts and graphs. In fact, the former involves proposal writing,

which is designed to identify and target a specific market and solidly demonstrate

how the bidder can deliver custom solutions to the needs of buyers within that market.

Business proposals vary in scale and intended audience. For instance, a small

business may direct a limited number of proposals in batch to larger companies in the

hope of establishing new lines of business. On the other hand, a company may draft a

business proposal in response to an invitation to bid on a specific project made public

by a private company or government agency.

2.2 Types of business proposals

There are three types of business proposals:

1) Unsolicited Proposal

2) Solicited Proposal

3) Informal Solicited Proposal

Unsolicited Proposal

An unsolicited business proposal can be thought of as collateral marketing material,

such as a brochure. They are largely broad spectrum in that they don’t address a

particular company by name or attempt to close a sale. Instead, this kind of informal

business proposal is created to introduce a product or service to potential customers

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through direct mail distribution, by leaving the material behind after a “cold” sale call,

or making printed information available at trade shows.

Solicited proposal

A solicited business proposal is quite different and much more detailed. As previously

mentioned, a company or government agency may publish a request for bid proposals

on a certain project, also known as a Request for Proposal (RFP) or an Invitation for

Bid (IFB). Since the project is usually offered to multiple candidates simultaneously,

the business proposal submitted by the winning bidder will generally meet the specific

requirements of the project but at the lowest price.

Informal solicited proposal

There is yet a third kind of business proposal, however, and that is an informal

solicited proposal. While this is similar to a solicited business proposal in terms of

being an invitation to bid, it is generally extended to only one vendor at a time. In

fact, this opportunity most often stems from a vendor and potential customer having

crossed paths at a convention or trade show. Another key difference between an

informally solicited proposal and a solicited proposal is there are no specific

requirements for the vendor to satisfy in the written business proposal. It is merely

solicited by an expressed interest in the product or service that the vendor has to offer

and an informal request for more information.

2.3 Elements of business proposal

Business proposals are sometimes lumped in the same category as competitive bids.

But other analysts point out that proposals—and especially unsolicited proposals,

whether aimed at convincing a publisher to publish your new book idea or convincing

an investor to take a look at a potential new business site—are essentially designed to

pique the interest of the prospective client. For this reason, such proposals often do

not get into the nuts and bolts of compensation, time frame, and other matters.

Competitive bids, on the other hand, provide detailed information on all aspects of the

proposed business arrangement.

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Standard elements of basic business proposals include the following (although,

depending on the degree of formality of the proposal, not all parts are always

necessary):

Cover Letter

This should provide an over-view of your proposal as well as an introduction, if

necessary, in which you include a brief synopsis of your company's background and

qualifications.

Title Page

This part typically includes your name and the name of your company, the name of

the person or company to whom the proposal is submitted, and the date of submission.

"Some titles are one line long, occasionally two," commented Herta A. Murphy and

Herbert W. Hildebrandt in Effective Business Communications. "Some even include a

colon—followed by words to clarify the thought. Clarity and comprehensiveness are

dual criteria for a good proposal title."

Table of Contents

While usually not necessary for shorter proposals, these are sometimes used for big,

formal proposals (such as request for proposals).

Executive Summary

This is the portion of the proposal where you make your case for a business

arrangement. "This is the most important part of your proposal," said Sant. "It's the

section that will be read by every decision maker. Make sure it's easy to read. Avoid

technical jargon and technical details. Focus on organizational issues and benefits,

and keep it short."

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Body/Procedures Section

This is the section in which you place technical details and explanations, as well as

information on price, implementation schedules, logistical and support issues,

documentation, and training. Legal experts note that if the proposal is accepted, it can

become a legally binding document. For this reason, and because of the length of time

that is usually necessary to produce this section, writers of unsolicited proposals may

wish to hold off on preparing this section unless the targeted person or company

expresses interest in the basic proposal.

2.4 Importance of Business Proposals

The major reasons why business proposals are written is in order to propose a product

or service to a prospective customer or buyer.

Business proposals are written in order to offer solutions to the problems faced

by prospective customers.

Business proposals enable businesses to sell their products or services. A

business proposal is one of the most effective tools that can be used by a

person or business to sell a product or services.

Business proposals help businesses to compete without even needing to send

marketers or representatives to physically go to the prospective customers to

pitch or to try and sell their products or services. The business proposal, if

written very well would on its own be able to do all the promotion and selling.

Business proposals help buyers to get the exact products or services that they

want.

2.5 Advantages of Business Proposal

The advantages of the business proposal are as follows:

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Medium for creating business process more professionally organized.

Now in days every business organizations are professionally and formally sound. So

any deal, meeting, negotiation and etc. happens in a formal and professional way. So

this business proposal a document is very helpful to deal with other as formal, so its

looks like as professional.

Identify problems

In a business organization it may happen an owner or top level persons cannot know

about problems of other levels or different departments. So while they are proposing

other with the help of proposal that time they can know what are the problems in their

organization? Problems like fund raising, no. of employment and etc.

Project benefits

A business proposal shows benefits of the project, firm and etc in advance. Because

each and every fact detail is mentioned in a proposal about the organization and how

the need will be fulfilled by the seller. So that a purchaser can know all project

benefits with the help of this business proposal.

Simplified

As we earlier in a proposal each and every details are mentioned so it is simple for

understanding. There is no chance of misunderstanding.

Reference for every party involved in the partnership

It may happen, when the time of proposal partner cannot come in a partnership firm

due to some reason then in future he/she can see it. Because proposals are always in

written form.

Project budget

In a proposal each and every detailed information is mentioned so both the parties can

know what will be the cost and budget of project. So there will be no problem occurs

of raising fund. Because in advance they can know about it.

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Assures the Reader / Investor

Now days an organizations are publishing this business proposal in their annual

reports, so an investor, reader and etc can know about the firm’s activity, profitability

of the project and etc. from these information an investor can get idea of investment in

that particular organization.

Disadvantages of Business Proposal

The disadvantages of Business proposals are as follows:

Risk of rejection

As future is uncertain so it may happen purchaser may not accept the proposal and

reject the proposal. So it is a risky for seller. Due to any reason a purchaser will reject

the proposal.

Uncertainty with clients

Sometimes it may happen a purchaser may not understand the proposal or he/she is

minor so it may happen proposal cannot be accepted by the purchaser. So it is

disadvantage of a business proposal.

Hypothetical figures

While proposing a seller cannot assume hypothetical figures. In a proposal all the

present figures are considered. So it is not good for the seller. If seller mentioned

hypothetical figures so it will be a beneficial for him/her.

Future oriented approach

As earlier discussed a business proposal are future oriented and future is uncertain, so

it may happen a proposal can be reject by the purchaser in a future.

Decision based on current situation

Here in a proposal decision is based on current situation. If an organization’s situation

is not good presently so seller cannot take a hypothetical figure into consideration. So

that will create bad effect on the organization’s goodwill.

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CHAPTER THREE

PREPARING BUSINESS PLAN

3.1 Consideration for preparing business plan

There are certain things which need to be considered while preparing the business

proposal. Three main steps you have to consider for preparing business plan.

Step one: Prewriting

As in letter and report writing, the prewriting stage for proposals involves posing key

questions that your finished work must answer. Asking these questions can help you

plan your writing.

1. What is the purpose of your proposal- beyond selling your ideas? Why

are you writing it? What does the client need to know? For example, if the

client asked for a proposal on implementing an affirmative action program,

you would tailor your purpose toward that end. In a sentence or two, state the

purpose of the report.

2. Who is the audience and what are their needs and motivations? Effective

persuasion depends on your ability to identify and appeal to the recipient’s

needs and motivations. Who are the readers-upper management, the board of

directors, and your immediate supervisor? Research your audience so that you

knee how to appeal to their self interest. The client or other readers should

understand clearly how they will benefit from your efforts.

3. How do you catch the readers’ attention? Once you have identified their

needs , capture the readers attention by addressing their primary concern

first.do readers want to save time and money? Increase profits? Change

procedures? Are they motivated by prestige or convenience?

4. What results or outcomes would the reader like to have? A proposal asks

for some change, perhaps a new policy or procedure, or the solution to a

problem. Your job is to identify what outcomes the readers would like and

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then consider other outcomes the reader may have overlooked. You should

also anticipate objections to your proposal and be prepared to counter them.

5. What information or background research will you need in writing the

proposal? Once you have determined the purpose, audience, and scope, you

are ready to gather data.

Background research. For a client proposal, you will need to research the client’s

needs and problems thoroughly . your information will come from the company’s

management and personnel , its publications, information about the industry in which

it operates, its markets and suppliers, and other historical documents that will give

you a correct picture on company’s current situation.

Estimate the time and cost of the project. Can costs be measured against specific gains

or benefits? For example, in the alternative action proposal, what advantages would

the company gain once the program was operating smoothly? Your proposal should

persuade readers that the time and money will be well spent.

Step Two: Writing

Many companies have a standard format for proposals. If so, it can simplfy the job of

organizing and outlining your document. A standard proposals formats might looks

like the following:

I. background of the situation

II. description of the current problem

III. our approach to the problem

IV. methodology and research

V. expected results

VI. time and cost requirements

Writing the first draft. A standard format can provide headings and subheadings for

your proposals. All the information must support your position. You would want to

put your ideas in the best light, tailored to the specific needs and purposes of the

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readers. Do not provide the detailed explanations or technical facts unless the reader

asks for it.

Every paragraph and sentence should convey the impression that your ideas and

approach are well-reasoned and appropriate. Remember, your goal is to sell your

ideas.

Step Three: Revising

Review, edit, and revise every part of the proposal. In many instances, thousands even

millions of dollars may hinge on a proposal being accepted or rejected. Check and re-

check all your facts about the client’s situation. Pay attention to the particular choice

of words and tone of the proposal. Thee readers must believe you have appraised their

problems realistically. Have you stated the situation clearly and tactfully. Are your

suggestions for the proposed work tailored to the client’ specific needs?

If your proposal convinces your readers that you have done your research carefully

and clearly understood their problems, you will probably sell your ideas. Ultimately,

the acceptance of a persuasive message depends on the senders’ credibility and the

receivers perception of direct benefits.

After the proposal has been typed in final copy, proofread it carefully. Check for the

errors in grammar and spelling, for careless mistakes that previously escaped your

eye, and for any inconsistencies in format.

What to DO?

Concentrate on facts

Research about the company

Write a title page

Personalize your proposal

Indicate a follow-up time

Emphasize the suitability of your product or services

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Use picture, illustrations, photographs and charts

Use repetition of key points

Say what is new

Link paragraphs

Add credibility

What NOT TO DO?

Never use jargon

Do not beat around the bush

Do not make unsubstantiated claims

Do not simply send a letter of introduction to a client

Do not be too fancy

Do not assume that reader lacks knowledge.

Do not overdo humor

Do not use up benefits early

3.2 7 Steps to a Winning Business Proposal

In today's competitive business environment, your ability to write powerful proposals

could mean the life, or death, of your business.

When government agencies and large corporations need to buy products or services

from an outside source, they often release what is called a Request for Proposal

(RFP), a formal document outlining their needs. To bid for the job, you must submit a

proposal, which will explain how your company would meet the client's needs and

should convince the client to hire your company, instead of a competitor.

Don't leave your business's success up to chance. Follow these seven steps to write

winning proposals:

1. Study the Requirements.

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Writing a winning proposal begins with a clear understanding of the client's

requirements. Read the RFP thoroughly. As you're reading, ask yourself, What are

this company's goals? What is my role in achieving these goals? Is the time frame,

budget and scope of work reasonable? And if we're awarded the contract, does my

company have the time, expertise and resources to complete the project?

Next, decide whether you want to proceed. Preparing this proposal will require a lot

of time and effort in research, analysis of the client's needs and writing, and you may

decide to wait for a better opportunity.

2. Understand the Client.

If you don't understand the client's problem, you certainly can't propose a

methodology that is going to solve the problemThe best way to understand what the

client really needs is to talk with them. Ask people in the organization about their

concerns, their operating policies and their management philosophy. Discover if any

previous attempts have been made to reach the goals outlined in the RFP and why

those earlier solutions didn't work. Ask what they like and dislike about dealing with

consultants like yourself and what criteria they'll be using to evaluate your proposal.

You'll also want to get some general information about the organization and the

industry it's in. Ask questions like these: How long has the company been in business?

Who are their major decision makers? What are their main products or services? How

is this company better or worse than its competitors? What is the company's financial

position?

If you're not able to speak with the organization's employees, do some secondary

research. Visit the library or check with colleagues who may have worked for the

same organization; it's worth the effort. This research may save you from proposing a

tack that has already been tried or is unacceptable to the client for some other reason.

You may also discover some underlying issues that weren't addressed in the RFP and

need to be considered.

3. Develop a Methodology.

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Once your client's goals are clearly identified, it's time to develop the steps, or

methodology, necessary to reach them. If you're having difficulty with it, use

Wakefield's suggestion of brainstorming sessions.

To ensure that your methodology is practical, analyze its costs and benefits, as well as

the time and resources it will require.

4. Evaluate the Solution.

You may have developed a brilliant methodology, but if it's unacceptable to your

client, you'll need to find an alternative solution. You have to understand the decision

maker's orientation.You have to know precisely what their background is, and how

they look upon this particular project. For example, find out whether the person is

financially oriented or operations oriented.You should then describe the benefits of

your solution in a way that will receive the most favorable evaluation from the

decision maker.

You should also evaluate your solution according to criteria outlined in the RFP. For

example, if your proposal is being evaluated on price and completion time, a lengthy,

expensive solution is unlikely to win your company the contract.

5. Outshine Your Competitors.

Don't forget that a proposal is a sales document, designed to persuade the client to

hire your company instead of a competitor. So make certain your proposal reinforces

your company's strengths and addresses any potential reservations the client may have

about hiring you.

To properly present your strengths, you must know how you stack up against the

competition. If you're lucky, the client will divulge your competitors' names, describe

what they're like to work with and offer an opinion of your competitor's abilities.

6. Write the Proposal.

Now that you've completed the first five steps, most of the work is done. All that's left

is assembling the information into a proposal format, so we'll be referring back to the

work you completed in the previous steps.

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If the RFP specifies the format of your proposal, follow that exactly. If no format is

specified, Freed recommends the following headings be used:

A. Current Situation. Explain the background or problem that motivated the

organization to issue an RFP. This section will be compiled from the background

information outlined in the RFP, as well as from the research you performed in Step 2

B. Goals. Clearly explain the goals of your proposal. You formulated these in Step 2,

based on the RFP and your understanding of the organization and their problems.

C. Proposed Methodology. Describe each of the recommended steps, developed in

Step 3, that will lead the organization to meeting their goals.

D. Time and cost. Thoroughly explain the time and cost requirements for each step in

the methodology, based on your calculations from Step 3. This section should also

specify how you will be billing the client, and when payment will be expected.

E. Qualifications. Fully describe why yours is the best company for this job. This

information will be based on your competitive strengths and on the proposal's

evaluation criteria, which you developed in Step 5.

F. Benefits. Discuss the many benefits the client will receive by implementing your

recommendations. This section is based on the benefits identified in Step 4.

7. Apply the Finishing Touches.

Review the proposal carefully to ensure it completely fulfills the requirements set out

in the RFP. Make sure the information is arranged logically and that it fully addresses

each of the decision maker's concerns. Finally, have someone you trust proofread the

proposal to catch spelling and grammatical errors.

Many contracts are awarded solely on the quality of the proposal, so don't let sloppy

writing or careless mistakes ruin an otherwise terrific proposal.

3.3 Choice of format of Business proposal

There are two approaches to the format of proposal. Sometimes a letter, albeit maybe

a longish one, is entirely appropriate. Indeed, sometimes doing more than this can

overstate a case and put the recipient off. It is seen as over-engineering.

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Alternatively what is necessary is much more like a report, though with a persuasive

bent. Consider both in turn, and when and why each may be appropriate.

Letter proposals

This is simply what the name suggests. It starts with a first sheet set out like a letter,

which begins “Dear…”. It may be several pages long, with a number of subheadings,

but it is essentially less formal than a report-style proposal.

This style is appropriate when:

a more detailed proposal is not needed, because there would be insufficient

content:

the objective is only to summarise discussions that have taken place;

there are no outstanding issues(unsolved at prior meetings, for instance);

there is no threat of competition

Formal proposals

This is a report-style document, usually bound in some way and thus more elaborate

and formal.

This style is appropriate when:

recommendations are complex;

what is being sold is high in cost;

there is more than one customer, a committee, a recommender and a decision

maker acting together, or some other combination of people who need to

confer and will thus see exactly the same thing;

when there are chanes of competitors submitting the proposals.

In many businesses it is common for there to be multiple decision makers or

influencers. Where this is even suspected it is wise always to ask how many copies of

a proposal are required.

3.4 Format of Formal Proposal

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Title Page:

Title of the proposal should be as short as and as informative as possible.Reference

number for the proposal is also required.

Name of the recipient and date of submission are also included.

Signature of the project director and responsible administrator(s) in the proposer’s

institution or company

Executive Summary

The executive summary is the place for you to summarize all the key points in the

proposal. If you had to email, fax or mail a single section to a customer, this would be

it. Take each section and write a very concise summary pointing out the key points.

Many times, this is the section the customer goes to first for a quick look. Keep it

simple and easy to follow for this reason.

Proposal Introduction

Your introduction briefly sets the stage for the remainder of the proposal. A useful

introduction will provide the reader with a basic framework for the proposal. If

warranted, it will also briefly explain your company history, the business relationship

of the two companies, any industry trends or innovations that impact the

recommendations, and the impact your suggestions will have when the

recommendations are implemented.

Make the introduction interesting enough so the person reading it will want to

continue with your proposal. If your company offers any unique experiences or

qualifications, this section would be the place to include them. Keep it brief and to the

point.

Current vs. Proposed

The compare and contrast approach is very effective and should be included when

writing a business proposal. It is very easy to understand for most people and is a

common method in proposal designs. Very simply, it shows how the current situation

can be improved by the proposed solutions.

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For example, if monthly operating costs are the overriding problem in the current

situation for the customer, then identify each of the monthly operating costs by line

item. Present the information in an easy to follow and logical format. Highlight or

zero in on the items that have been shown by the customer to be the most pressing.

When you contrast your solutions, these will be most important points in the proposal.

Outline your proposed solutions in basically the same format. Again, make it easy to

follow and understand. If Item A is listed as a current operating expense, and is a key

item to improve in your proposal, then your proposed solution needs to be in contrast

to Item A on the same line. Don’t make the compare and contrast approach any more

complicated than it needs to be.

Description of products or services offered

Details of the equipment or raw materials required for the project. This type of

information are required for buyer to understand the product.

Many products have different characteristics so each of this can’t be tell in front of

buyer to seller.

Charts and graphs as appropriate

The necessary charts and graphs should be added to the business proposal.

Time frame for delivery

Every seller have to keep in mind the completion dates and key milestones for

products. So one advantage is that buyer can easily understand what is the maximum

time has to take for buy or order for this product.

After the time of the order seller have to note periodical delivery of progress reports.

Base completion dates and milestones will be allotted to the groups on the project.

Information about limitations or exclusions

Seller gives all statement of limitation of products in this segment. Because of that

buyer can easily understand limitation of this product or proposal.

If any mismatch occurs in this segment then many others issues are created from both

sides and that is resulted in rejection of proposal.

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Detailed pricing information

The cost summary is pretty straightforward. You simply show the corresponding costs

associated with the proposal. Some of this information may have been part of your

current vs. proposed section.

An often overlooked part of this section is the use of return on investment (ROI). If

your cost recommendations can also be shown from a ROI perspective, then by all

means, include them for the customer.

Keep your ROI analysis as simple as possible, recognizing that not everyone fully

understands it. ROI creates value for the customer, whereas focusing only on cost,

does not. The tendency for most proposals is to look only at the bottom-line cost

expenditures. Generally speaking, the greater the value you derive through your ROI

analysis, the greater the acceptance of your proposal.

This section is also the best place to outline any cost justifications that you feel are

needed. If some costs appear to be new to the customer, or very different from what

they’re experiencing in their current situation, then provide some written explanations

for the customer to help them better understand what they are reading.

Recommendations

This section is where you tell the customer, in very convincing language, to purchase

your products and services. This is why you a write business proposal. Be very clear

in what you write and what you suggest. You don’t want any confusion or

misinterpretation.

Included would be topics such as; suggestions around dollar amounts, timetables,

which products and services to purchase, milestones, what to spend, when to spend it,

who is involved, how the implementation will work, any follow-up strategies, initial

paperwork, and contracts or agreements.

Also consider the “what’s in it for me?” mindset when crafting your

recommendations. If you can clearly answer this question for the customer than you

have a potentially winning proposal.

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If there are several possibilities for the customer to consider, then provide those ideas.

Using an alternative choice close in your recommendations can be very effective in

gaining some level of business.

CHAPTER FOUR

Misconception about business proposal

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There is common tendency to think business proposal and business plan as the same

thing. But they are two different things.  Business 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. Business 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.

Business 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. Business 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. Business plans often help to raise the required capital needed for your

venture. Business proposals don’t do this sort of work.

Also there is necessary to be clear about what exactly is meant by the two words

‘proposal’ and ‘quotation’. Although they are sometimes used in a way that appears

similar, in sales terms they each imply something very different. Proposals have to

explain and justify what they suggest. They may make recommendations, they

certainly assume that their job is to persuade. Whereas, quotations, which are much

simpler documents, simply set out a- usually requested-option, saying if it is available

and what it costs. They assume, rightly or wrongly, that the sales job is done and that

persuasion is not necessary. Many quotations should have more, sometimes much

more, of the proposal about them.

Bibliography

Books

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Patrick Forsyth, How to Write Reports and Proposals,2010, THE SUNDAY

TIMES,120 Pentonville Road, London, p130

Websites

http://www.referenceforbusiness.com/small/Bo-Co/Business-Proposals.html

http://www.smibusinessdirectory.com.my/smisme-editorial/more/more-business-tips/490-the-winning-elements-of-business-proposals.html

http://www.wikihow.com/Sample/Proposal-for-Cost-Savings

http://proposal.ezinemark.com/what-are-various-types-of-business-proposal-4f0d346bfa3.html

http://hosbeg.com/importance-of-business-proposals/

http://www.proposalsmartz.com.

http://EzineArticles.com/3233955

ANNEX I

February 25, 19__

Mr Bernard R. wright

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Wright Heating System, Inc.

1886 north Diversy

Crystal Woods, Illinois 60014

Dear Mr Wright:

Last week, you spoke with Mr Stephen Chutus, our senior consultant, about some of

the organizational problems your firm is experiencing. At that time you asked our

firm to submit a proposal outlining our approach to those problems and including an

estimate of time and expenses. This letter is in response to your request.

OUR UNDERSTANDING OF THE CURRENT SITUATION

Wright Heating systems, Inc. , was founded by Charles Wright in 1935. The company

grew modestly through the 1930s and 1940s and confined its business to the sale of

heating equipment to small companies and private homes.

In 1958, Bernard wright assumed leadership of the company and began diversifying

into office appliances, service contracts and some international sales. By 1965,

company sales had reached $25 million. The number of employees had grown from

32 to over 120, and two branch offices had been opened in New York City and San

Francisco. Over the next 20 years, the company continued to enjoy steady growth

with only two periods of decline during the 1970s oil embargo and sever recession of

the early 1980s.

However, the company has been experiencing organizational problems along with its

growth. Communications among management levels and with support staff are often

poor. Goals and objectives are not communicated clearly throughout the organization.

Sales and service areas overlap in some case, and there is to service which customers.

Quality control is spotty at best, and faulty equipment and appliances have been

turning up in customers’ orders at an alarming rate. Worker moral is poor, and the

company has been approached by union organizers within the past month to recruit

union members from among employees in the firm.

In short, the company is experiencing “growing pains” in making the transition from a

small, family –owned concern to a medium sized form with multinational

connections.

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OUR APPROCH TO THE PROBLEM

Wright Heating Systems is on the verge of entering a new phase in its development.

We have assisted many firms in making the change from a small company to a large

concern. We can offer consulting services on reorganizing your management structure

without losing key individuals or disrupting the flow of the business. These services

including setting up new office systems, accounting procedures, and distribution

network to help you manage your business more effectively. We will also provide

training for support staff to involve them in the changes that need to be made.

We can help you devise forecasting and planning strategies that will define your goals

and develop plans to achieve them. You will be able to see where you are headed and

what the greatest growth areas are likely to be. These strategies, together with your

new management structure, will ensure that goals are communicated clearly to all

management and support staff levels.

ESTIMATED YIME AND EXPENSES

On the basis of our past experiences with companies similar to yours, we estimate that

the transition period will take about six months to complete. At the end of that time,

you and your management staff will have an organizational structure with clearly

defined functional areas and responsibilities and well-designed channels of

communication.

We will assign Mr Stephen Chutus as senior consultant in charge of this project and

from a team of consultants from our corporate staff. Mr Chutus has worked with

many of the fortune companies. His most recent project was overseeing the complete

reorganization of Hyatt Industries, a multi-million dollar corporation. The resume of

other proposed team members are included with this proposal.

We estimated the cost for the project will range from $ 135000 to $150000. This

would include implementation of recommended changes and follow up visits 3

months and 6 months after completion of the project.

Wright Heating Systems, Inc., has an expellant record in the industry. We would be

pleased to assist your firm in its continued growth, and we appreciate the opportunity

to work with you.

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Sincerely yours,

Barbara Tholin

FARBER & THOLIN ASSOCIATES

Enclosures: (5)

ANNEX 2

Deiric McCann

Profiles International

5205 Lake Shore Drive

Waco, Texas 76710

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Joseph Blayne

CEO

ClientCo Industries

ClientCo Street

ClientCo City

ClientCo State & Zip

Dear Joseph,

It was a pleasure to meet with you again yesterday to talk about how we could work

with Client Co on the development of a solution that would have such a dramatic

impact on the performance of your sales organization. Further to your request when

we met I have kept this proposal to the ‘bare bones’ necessary to outline our

understanding of the requirement and how Profiles would work with you to address it.

Should you require any further information I would be delighted to provide it.

CLI ENTCO’ S CHALLENGE

ClientCo’s sales team has 45 sales professionals – all hired for a specific combination

of education, skills and experience that they share in common, and which should

assure that all are highly successful in their positions. However, sales performance

across this team varies widely – from the highest performers who deliver a

performance against quota of as much as 139% (the top ten range from 111% to 139%

with an average performance of 125%), to the lower performers who deliver as little

as 82% against quota (the bottom seven range from 82% to 99% with an average

performance of just 92%). It is this gap of 57% between the highest and lowest

performers that rightly concerns Client Co. Client Co has the potential to increase

their sales output by a factor of several hundred percent - if they can determine what it

is that makes their top performers so much more productive than their average and

bottom performers, and if they can use that information to raise the performance of

every member of their sales team to the level of their top performers. Such an increase

in sales would come with no increase in numbers of sales personnel, so all such

revenue increases would directly impact the bottom line – with an upside potential as

much as several hundred percent of current sales performance.

PROFILES SOLUTION

As discussed, Profile will establish a customized Online Assessment Centre to enable

Client Co to comprehensively assess their sales team. Using the Profile XT we will

assess your entire team and use our unique ‘success pattern’ technology to identify the

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particular combination of attributes that make your top performing sales people so

successful. By analyzing the Top Performers we will identify the particular

combination of learning abilities, behavioral/personality characteristics and work

interests/motivations that make these people capable of performance at such a higher

level than their peers. Client Co’s challenge is one that is faced by the sales

management of the organisation on a day-to-day basis, and that challenge will only be

met and addressed effectively by that same team working upon it on a day-to-day

basis. It is clear that any solution proposed must be entirely usable by all members of

the sales management team – there should be no requirement for any sort of

specialised certification or training in order to make use of the solution. A range of

reports are required to meet various aspects of the challenge (hiring, development,

management, succession and career planning etc) and these reports must be presented

in clear, everyday sales language – and require no interpretative input from

psychologists or specially trained individuals. As you saw, the proposed ‘Profiles on

the Web’ (POTW) system provides a wide range of ‘plain English’ reports that will

allow you and your managers to manage every people decision you ever have to make

– but will most particularly help you to:

Identify candidates with the same unique combination of success characteristics as

your current top performers – so that every time you hire you’ll have the ability to

more quickly and effectively identify the candidates who are capable of similar

performance – and screen out those who are not.

Provide detailed information to sales management on precisely what combination

of coaching, training and management is required to raise the game of each of your

average or below average performers to the performance level of your top people.

Using this information your management will be able to raise the performance of each

member of their sales tams step by step.

Use the success pattern and candidate information you build on your POTW system

to more effectively manage the succession and career planning activities that you

correctly identified are so critical to ‘locking in’ your best people and reducing costly

turnover of top performers It was clear in our meeting that, as the initiative to identify

and acquire a solution to this challenge is not one that formed part of the ClientCo’s

IT Department planning at the outset of this year, no IT resources have been allocated

to support the initiative. For this reason we are delighted to be able to propose a

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solution that is entirely web-based: requiring no specialized hardware or software, and

no programming or ongoing support from your IT Department whatever.

BENEFITS OF THE PROPOSED SOLUTION

1. Exceptional Return on Investment. The accompanying Return on Investment

analysis clearly demonstrates that the system will have completely paid for itself by

end of the current year, and will provide a return of investment in excess of 200%

over the year to end 200X.

2. Extremely low entry costs.

The entire POTW solution – from start to finish – will cost Client Co just $XXXX.

This is possible because Client Co’s customized Online Assessment Centre will be

provided at a one-off cost of just $XXX (with an annual hosting charge of just $XX).

Client Co will have an entire online system for about the same cost as a single license

for the office suite software used in Client Co offices.

3. ‘Pay as you use’ model.

The only time Client Co will have any additional cost is when you wish to assess a

new candidate for the first time – at which point the cost per candidate is just $XX –

and, as explained below, once a candidate is in the POTW system Client Co may run

any additional analysis, and produce any additional reports they require at no further

cost.

4. Proven track record with similar organizations.

Profiles have been privileged to work with many of Client Co’s peers in the

pharmaceutical industry; I have attached case studies and testimonials outlining the

success of implementations similar to that proposed to Client Co.

5. Fast implementation – no special training or certification required.

As discussed, busy sales managers do not have time to become assessment experts.

Managers will learn how to effectively use the system in just one half-day training

session – this is uniquely possible with Profiles’ offerings as all of the results

interpretation is undertaken by the expert software at the heart of POTW – producing

manager usable reports presented in ‘real English’.

6. Countrywide support.

Profiles International supports a network of 700 Strategic Business Partners

nationwide, and a centralized telephone and online support team, that can provide

Client Co managers with support anywhere they require it – and at any time.

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7. Inexpensive to take nationwide – and global.

The POTW system provides Client Co with 15 ‘sub-sites’ at the outset. Each of these

sub-sites will meet the needs of a Client Co branch nationwide. After that initial 15

sites have been used Client Co can add additional sites for a one-off cost of just $XX

– and there is no limit on the number of additional sites Client Co can add to their

system. This will make expanding this system nationwide extremely inexpensive – it

will also make expansion of the system to meet global requirements similarly

inexpensive. Coupled with Profiles support for 50+ languages in 106 countries this

initial implementation will be extremely strategically significant for Client Co.

COSTS

Mindful of your explanation of the current budget situation we are proposing an initial

implementation of the system at less than $XXXX, and providing the facility to assess

candidates on an ongoing basis for just $XX – and to add additional Client Co

branches nation- or world-wide for just $XX.

As discussed, there are three cost elements in the implementation:

1. Web-based Assessment Centre. As discussed, we will set up a private Online

Assessment Centre (POTW) that will allow Client Co to fully administer all aspects

of candidate assessment completely independently. Set up and hosting of the

assessment centre costs an annual $XXXX. Your assessment centre will provide you

with the ability to score candidates results, archive these results in a database, create

job profiles, and produce the reports for hiring, retention, coaching & training and

career / succession planning. This software will allow you to derive benefit from the

information gathered in candidate assessments ad infinitum.

2. Implementation, Setup & Training. This costs a once-off $XXX (one day it

total). Profiles will train an administrator (half-day), co-ordinate the assessment of the

initial candidates and produce the required profiles from their results. We will also

oversee production of a full range of useful reports to ensure that you derive

immediate benefit from the initial assessments used to establish the first benchmarks.

Once the profiles have been established we will spend one half-day training sales

management in how to make best use of the reports from the system. When this phase

is complete the system will be completed implemented, with all of your team’s results

on the system, all of your benchmarks developed, and your entire ready to use the

system effectively.

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3. Per Candidate Cost. Every time a candidate is entered into the system for the first

time, the software levies a nominal charge for scoring their results. Once their results

are in the system there are no further costs associated with producing any of the

system’s reports on this candidate into the future. So, once you have assessed any

individual for a project you will be able to use the system to assess their future

suitability for other projects into the future – at no additional cost. The cost per

candidate is on a sliding scale based on the quantity purchased at any one time:

1– 10 $XXX

11 – 24 $XXX

25 – 49 $XXX

50 – 99 €XXX

100 + €XXX

Therefore the total cost of a project that profiled XX people would be:

Assessment Centre Web Site $ XXX

Implementation/Training $ XXX

45 x Profile Assessments @ $ XX $XXXX

Total: $XXXX*

* Please note that the price breaks above would make it more economical for you to

purchase 100 assessments for €XXXXX).

Profiles are completely committed to dramatically increasing the sales results in the

Client Co team by several hundred percent in a matter of a few months. Assuming

Client Co make a decision to proceed by May 11th the solution can be fully

implemented by July 1st, with the first concrete results ready to report well in advance

of the Client Co Annual Conference planned for Q4. Thank you again for the

opportunity to work with you on what we are certain will be a conspicuously

successful partnership.

Sincerely,

Deiric McCann

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