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A project proposal, or business proposal, outlines the approach to fulfill specific project requirements and constraints. It often introduces your team to a prospective client and serves as an opportunity to showcase your qualifications and differentiate yourself from competitors. The proposal acts as a written commitment regarding the execution plan if awarded the contract, balancing self-promotion with clear commitments to the project's scope, timeline, and budget. Developing a proposal template can streamline the process, enabling quicker revisions as new requests come in. The video mentions that there are seven essential components to consider when crafting a proposal.