Project Proposal Writing: How To Write A Winning Project Proposal



How to Write a Proposal to a Financial Institution or Angel Investor

Steps

  1. Explain the product or service and its competition.Talk about the new product or investment proposal in the context of the market, existing products or services, why and how yours is different and why the time has arrived for your product. Your product or service must be cheaper faster, better, friendlier, more local, more eco-friendl  or newer. Things to canvass include:
    • Is your product replacing another one?
    • Who are the players in the market; from low end to high end.
    • What can you offer that is different from and more advantageous than those existing?
    • If there are many similar products, chances are there is a strong demand for it. What makes you believe that demand is growing?
    • How will you deliver your product and position it in the market? What comparable or complementary products does that customer already buy? Use those to assess the market size, the potential, locally, regionally, nationally or international.
  2. Explain what sparked this idea, why now and why you.
  3. Cover how the prototype will be made.Things to cover include:
    • What are the best materials for it?
    • Should it be made in the USA or in China or elsewhere?
    • What manufacturers can you enquire about? Are they on Alibaba or some other way online facility?
    • What manufacturing process is involved?
    • What quantities of production are required? Is there an optimal or minimum quantity?
    • What are the plans for the product or service launch?
    • Will it be sold online? With what retailers. or will there be direct sales on the Internet? What are the best places to advertise the product or buy clicks?
    • What amounts are required to run an effective campaign? What are the initial markets for the product?
  4. Consider what resources you are willing to contribute to this product.This includes money wise, time wise, skill wise. What help will you need for each step of the product launch? Show each step of the launch, the duration, the people involved and the cash or materials required for each. Where can the materials be secured in the most timely and cost efficient way? Are there other options?
  5. Test all your assumptions throughout this whole process.Make sure that you are gathering data continuously. Question your assumptions about everything. The process should allow you to verify all your assumptions before the launch. It is better to have a small failure along the way and correct, than to ignore what the market is telling you and have a big failure at launch. Question especially the price point of your product or service. Compare its utility versus its price.
    • The best way is to cut down the complexity of the launch is by breaking it down into many small steps. Each one needs laser focusing at the right time from you.
    • Build a PERT chart showing each activity over time with the resources..
  6. Cover the legal aspects.Consider the name, coloring, branding, trademark questions. Think up a fun name for your product and your company. It will show your banker or investor that you've given this aspect some thought. Using the name, product or brand starts your legal protection. Registering a brand or trademark without using it is wasted money. Most companies start using a "with patent or trademark pending" notice.
    • Consider setting up an LLC (limited liability co), register only in states where it will do business, have offices, plants, major markets. See an attorney.
    • Good brands or logos can be designed overseas online fairly cheaply.
  7. Do accounting and proforma statements.You need three types of figures in the Appendix.
    • The variable cost of your product or service in terms of labor or material cost. Variable costs change as batch sizes change. Evaluate the trade-off of quantity and cost of first run.
    • What fixed costs will you incur? Pay yourself a salary, although a modest one. See what rents have to be paid for office, storage and manufacturing. Look at fixed costs over time, over the next 24 months. Show them progressing as you expect to expand and add facilities and staff.
    • What are the revenue projections? What are the pricing assumptions, the quantity assumptions, market share, seller commissions, discounts and returns?
    • Do a detailed projection of cash inflows and outflows over 24 months. Cash inflows are the revenue stream, some seed money from yourself, outflows are purchases of materials, soft costs, rents, wage and salary, fixed costs. The shortfall each month is accumulated and will have to be funded by a line of credit or some angel money. Show amounts required, month by month. Repeat this assuming sales drop off by 25%.
    • What is the downside? What is the upside? Evaluate and be ready to discuss it verbally with your Investors or bankers.
  8. Devise an exit strategy.Assuming that the bank grants you the line of credit , or the angel investor provides you with either a loan or an equity injection, what are their exit strategies? How long do you expect to be involved in this venture? What is your exit plan? Sell it. Continue it.
    • Will there be other products added to this product to launch a suite?
    • Will you sell this out to a competitor?
    • What are valuations for similar products, services, apps?
  9. Make a to-do list of the ten key steps for your product launch.Add a name for each step. If your name is everywhere, think again. You need management depth, which means people you can call on for manufacturing design, marketing, product launch, advertising, logo and brand design, legal, distribution issues, pricing, manufacturing, quality control, market surveys, focus groups, parallel strategies, accounting and finance, and fixed plant decisions.
  10. Make a list of potential partners, competitors and industry venues where you can enroll the people, potential clients and investors.Clients that believe in your product or service are your best type of investor because your goals are in alignment. Avoid dealing with people that only want to do a financial transaction with little interest in your vision, product or yourself. Ideally, you're looking for long term relationships. People with a three-year horizon may harm you more than you think.
  11. Assemble the report.A report has to be brief and organized into short easily readable paragraphs. Refer to Appendices if necessary for detailed calculations. The 5-page report is an Executive Summary. Don't shoot for perfection.
    • Write a first draft. Let it sit for a week. Think about any ways to improve your arguments, verify some facts, be humble.
    • Write it, then bounce it around with a trusted friend. Practice your delivery on this person. Anticipate objections and questions by answering them.
    • Add sources in the Appendix.
  12. Keep the Executive Summary breezy and well flowing.Focus on the message, its clarity, its conciseness, its relevance, and most of all, its power.

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  • To assess a market size, look at the Clickbank stats, sales figures of competitors or do your best but conservative assessment based on population and census data. Also, analyze consumer behavior at the retail outlets that would deliver your product or services.





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Date: 08.12.2018, 04:49 / Views: 75254