WHAT DIFFERENCES EXIST BETWEEN BUSINESS PLAN, BUSINESS PROPOSAL AND FEASIBILITY STUDY?
In the course of the article, we will be highlighting the major differences between business plan, business proposal and feasibility study.
RELATIONSHIP BETWEEN FEASIBILITY STUDY AND BUSINESS PLAN AND PROPOSAL
A business plan, business proposal and a feasibility study are all analysis and tools utilised for decision making by organizations. In as much as the 3 tools can be utilised alongside one another in decision making processes, they have their differences and they seem to target and tackle different processes.
WHAT IS A BUSINESS PLAN?
A business plan can be considered to be that document that highlights a concise description of how a business is established. The business plan is usually a 5-year plan of a particular business and it shows the company structure, market finding and analysis, products and services, marketing strategy and financial projections.
WHAT IS A BUSINESS PROPOSAL?
A business proposal can be considered to be a sales document that is drafted to highlight how a particular project will be carried out, estimate the value of the project to the client and then seeks the client’s involvement in the business. The business proposal is usually document that an organization submits to another organization to effect a business arrangement.
WHAT IS A FEASIBILITY STUDY
A feasibility study is considered to be that document that is drafted with the purpose of finding out how workable and profitable a business venture will be. Before any action is taken in a business, it is the feasibility study that will determine if the business will be worth the time, resources and efforts.
WHAT ARE THE DIFFERENCES BETWEEN FEASIBILITY STUDY, BUSINESS PROPOSAL AND BUSINESS PLAN.
The differences between a business plan, business proposal and feasibility study can be categorised into 2
- The reason or purpose of the write-up
- The structure or element of the write-up
DIFFERENCES IN TERMS OF REASONS OR PURPOSE
A reason why a business plan is written out in a business is to to document the vision of the business and the steps that will be taken to accomplish the vision. A typical business plan will contain the financial projections of the cost of the business and also give an estimation of the revenues that the business will generated.
The purpose of the business plan is to provide a concise explanation of the business to be utilised by the potential investors, employees, suppliers, attorneys, accountants and any other set of people that will need a quick and comprehensive knowledge of what the organization does and its ability to achieve success
REASON FOR A BUSINESS PROPOSAL
A business proposal, most of the times, is an unsolicited business ideas that is presented to another business entity or they may be a response to requests made by a potential client to your company. The scope of a business proposal is quite limited to a particular project. In fact, we can say the major reason for a business proposal is to request for a business opportunity.
REASON FOR A FEASIBILITY STUDY
Feasibility is most of the times carried out with the purpose of finding out the profitability and workability of a business idea. Unlike a business plan, a feasibility study is always filled with calculations and estimated projections for a project.
DIFFERENCES IN TERMS OF STRUCTURE
STRUCTURE OF A BUSINESS PLAN
A business plan comprises of 3 major elements:
- A detailed description of the business model
- The marketing model
- And the financial projection
Other information sections of the business plan will include the executive summary, description of the business, competitive analysis, marketing model, operations plan, financial information and projections. These are the structures of a typical business plan
STRUCTURE OF A BUSINESS PROPOSAL
A business proposal that is written as a response to an RFP must follow the format that is requested in the RFP. The structure of the business proposal will involve a description of the services your company renders that are relevant to the goals that are specified in the RFP.
Your business proposal will also comprise of the answers to the specific questions that are asked in the RFP and a quote on the information about the materials, labour, tools, delivery and other costs that will be incurred in the course of the project.
STRUCTURE OF A FEASIBILITY STUDY
The activities for creating the feasibility study for a business venture are general in nature and are quite applicable to all kinds of businesses or projects irrespective of the technicalities involved in the running of the project.
The basic structures of a feasibility study will be:
- The scope of the project, which will be used to describe the problems of the business and the opportunities
- The current analysis is used to understand the current methodologies that will be utilised in the implementation of the project.
- The requirements of the projects. These depend on the object of the project’s attention
- The approach can be considered to be the prescribed solution to satisfy the requirement. On the approach, various alternatives can be considered and detailed explanations on why the solution is preferred to other solutions highlighted.
- Evaluation will examine the cost efficiency of the approach that is selected. This starts with the analysis of the estimated cost of the entire project.
- Review is then done to assemble all the elements into the feasibility study. The review has two different purposes.
- To initiate a project decision, which will be either to approve or reject the project or better still, ask that the project be revised before a final decision is made
- To ensure that the feasibility study is thorough and accurate.