Business proposal
A business proposal is a document that states the client's problem, the proposed solution, its scope, its price and the next step, so they can decide.
In B2B selling a proposal has one job: to let the buyer decide when the seller is not in the room. That is why a strong proposal contains more than scope and price — it also states the client's situation and why the change is worth making.
The word is used loosely, which causes confusion in procurement conversations. A proposal in the commercial sense is a sales document. In some jurisdictions a formal offer is a binding legal instrument once accepted, which is why many proposals carry a line stating they are not a binding offer until countersigned.
What people get wrong
Proposal vs quote
A quote answers 'how much'. A proposal answers 'why this is worth doing and what exactly will happen'. Sending a quote in place of a proposal moves the entire conversation onto price.
Proposal vs estimate
An estimate is a range under stated assumptions and is expected to move. A proposal commits to a scope and a price under conditions you name.
Proposal vs RFP response
An RFP response answers a buyer's questionnaire in the buyer's format. A proposal sets its own structure, which is why it can lead with the diagnosis.
See also
Proposals turns a call transcript into a proposal published as a web page, and shows which sections the client read.