How to Politely Reject a Business Proposal

Receiving business proposals is a great sign that people want your company as a business partner and a customer, but you can’t say yes to everyone.

You’re going to have to reject more proposals than you accept. But every time you do so, you risk burning a bridge in what might be a small professional network.

Learning how to politely reject a business proposal is a key skill. With that in mind, here are some tips and templates you can use to reject business proposals without fretting too much about it.

Why do business proposals get rejected?

Business proposals shouldn’t be sent on a whim.

They shouldn’t reach your inbox without several people having carefully scrutinized the details.

But one difference when it comes to a proposal vs contract is that they’re rejected all the time.

That’s despite a good business proposal having as much thought and detail as a real contract.

It can be a blow when a detailed proposal gets turned down, but it happens for many reasons that can be out of any business’s control:

The price isn’t right

Sometimes businesses have to reject a proposal because the price just isn’t right.

Maybe the business is unable to afford the proposed cost.

Maybe they have doubts about the value-for-money.

Maybe it’s a good product, but the pricing structure is unappealing. (For example, the company might be asking for a minimum term for a monthly payment contract.)

A change in circumstances

Sometimes, the right business proposal can get sent at the right time.

Then, just before it’s accepted, there’s a change in circumstances that stops it going ahead. It might be the case that:

• The requirements for this project have changed. The proposals are no longer relevant and the business has to go back and reevaluate vendors.
• Fast-moving market forces have changed the short-term business strategy. This proposal is no longer the right move for the business.
• The decision-maker at the business has just learned of a restructuring. If this happens, too much is changing internally for the company to make this commitment.

By the time things have settled down at the company, the decision-maker might have moved to another team.

The new decision-maker taking their place might have different ideas about the proposal.

It’s a good opportunity that doesn’t align with strategy

Businesses might reject fantastic proposals that don’t align with their current strategy.

Any business has short- and long-term strategies that set their priorities.

They can’t focus on everything at once, so sometimes good ideas have to go on the backburner. Otherwise, they risk spreading their resources too thin.

In this case, there’s always a chance the proposals could get picked up at a later date.

It’s not the right time

In some cases, the proposal is a good idea and well-presented, but it’s just not the right time to pursue it.

This might be because the business doesn’t have the resources to commit to it right now.

Rejecting these proposals is often a hard decision, but it’s an easy email to write.

The person writing it can leave the door open to picking this proposal up again at a later date.

Another vendor matches their needs better

When a business puts out a request for proposals (RFP), they’re expecting several to come in. Only one of these will be successful.

So, for most of these proposals, the reason for rejection will be that another vendor won out. This reason reflects directly on the strength of the proposal and the company that sent it.

When rejecting these proposals, decision-makers have to be extra careful not to burn bridges. So when rejecting proposals, how can they do so politely?

How to write a business proposal rejection letter

When considering how to turn down a business proposal, keep in mind that it’s a disappointing outcome and it’s important to manage this appropriately. So:

1. Acknowledge the effort that went into it

Figuring out how to write a proposal takes time and effort, and the amount varies from case to case.

Writing a good proposal takes effort and receiving a rejection is a big disappointment, so it’s polite to start off by acknowledging that effort.

If you’re rejecting an unsolicited “cold” proposal, this is just the polite thing to do.

But sometimes you’re rejecting a “warm” proposal. You might have expressed some interest in an offer like this in conversation, or specifically requested a proposal.

In this case, acknowledging the effort involved is even more essential. Otherwise, you might come across as unappreciative and rude.

By validating the work that went into crafting this proposal, you can decline it while providing some positive feedback to the team that put it together.

2. Explain your reasoning

The second step to rejecting a business proposal politely is to provide a clear explanation for the rejection.

Your reasoning might have nothing to do with the quality of the proposal.

Maybe it’s not within your budget this year. Maybe the timing isn’t right; you’re focussed on other things.

Explaining your reasoning can soften the blow, but you’re also doing the recipient a favor by giving them useful feedback.

If they’re in sales or business development, it’s their job to know what influences each customer’s buying decisions.

3. Add a brief, but genuine, apology

The third step is to include a brief, but genuine, apology.

You want to keep the email as a whole short, and a long apology may come across as condescending.

Simply express your apologies that it’s not good news and move on.

Try to acknowledge the good qualities of the proposal and the company, while emphasizing it’s not right for you just now.

This way you can firmly reject the proposal without implying the offering is bad, or that you don’t think the company is good enough.

This shows respect for the things they’re doing right, and can maintain a good working relationship. In an industry niche where everyone is aware of everyone else, this is a valuable skill!

4. Try to end on a high note

The last step of rejecting a business proposal politely is to try to end on a positive note.

If there’s a chance you’d be interested in working with this company in the future, say so.

If not, try to convey that while this isn’t the right fit for you at this moment, you wish them all the best in helping another company with this service.

Tips on how to reject business proposals politely

There are a few tips to bear in mind when considering how to politely decline a business offer:

Get straight to the point

To reject a business proposal politely, it’s important to deliver the bad news up front.

Start by expressing your gratitude for the proposal and acknowledge the effort that’s been put into it. Then, without delay, clearly state that you are unable to move forward with their proposal.

This avoids prolonging any anxiety about whether you’ve accepted. Getting straight to the point also shows respect for the recipient’s time.

Keep it brief

It’s essential to keep a polite rejection email concise and to the point.

This demonstrates your appreciation for the recipient’s time and effort.

By keeping it brief, you ensure that you’re being clear and direct about the reasons for declining the proposal.

Establish boundaries

Establish clear boundaries by specifying whether you are open to being contacted about similar opportunities in the future.

If you don’t want to hear about similar offers in the future, be clear about that. If the proposal is interesting but this isn’t the right time, let them know.

It’s an easy way to end the email on a positive note. Even if the answer is “no”, being clear about this gives the recipient a clear course of action.

After your email, they can either remove you from their list of leads or set a reminder to reach out in a few months.

Don’t rule out future collaboration

If appropriate, emphasize that this does not completely rule out the possibility of working together in the future.

Specifically, mention that you’re open to working together down the road.

This might not be the right time, but in a matter of months you might be in a position to invest in a project like this.

Check your spelling and grammar

If you’re rejecting this business proposal over email, take extra care that your spelling and grammar are perfect.

This keeps you and your business looking professional. But on top of that, it helps demonstrate that you have put some thought and care into your response.

And by paying attention to these details, you show respect for the person who sent the proposal.

They spent a lot of time on the proposal, honing their own proposal language, tailoring their offering to your company, and ensuring no mistakes from their side, so it’s only fair that you take the time to respond properly, even if it’s to decline.

Example templates for rejecting business proposals

Many businesses save time on their proposals with business proposal templates, so why shouldn’t you save some time on rejections?

Below are four sample letters that you can use as templates for politely rejecting business proposals:

How to decline a quote for a service

Dear [Name],

Thank you for taking the time to put together a quote for [Product/Service]. I appreciate the effort you and the team put into preparing this proposal.

However, [give a clear reason], we have decided to decline the offer. I regret that we’re unable to go forward with the proposal at this time.

We appreciate the quality of this work and the excellent reputation of your company. We’ll keep [Company] in mind for any similar projects that come up.

Thank you again for putting this together. Myself and the team wish you continued success with this work.

Regards,

[Your Name]

How to decline a vendor

Dear [Name],

I want to thank you for the time and effort you and your team put into preparing the proposal for [Solution]. We appreciate the thought and detail that went into it.

Unfortunately, after considering [a reason], we have decided to proceed with another vendor this time. It was a difficult decision as we were very impressed with your product and the proposal.

I want to apologize for the disappointment this will cause you and your team. We understand the effort that goes into these proposals, and the investment of resources required.

Thank you again for your time, and we wish you continued success in all your endeavors.

Regards,

[Name]

How to decline a sales offer

Dear [Name],

I hope this email finds you well. I wanted to reach out and thank you for reaching out to me with your offer of [Product/Service]. I appreciate the time and effort you and your team put into preparing the proposal.

Unfortunately, after considering [give a reason], we’ve decided not to proceed with this offer. Apologies for any disappointment this may cause you and the team.

We appreciate your considering us as a customer and reaching out to offer assistance. We’ll keep your solution in mind if our circumstances change.

Thank you again for your time and effort; we wish you and your team all the best.

Regards,

[Name]

How to refuse a business proposal politely

Dear [Name],

I hope this email finds you well. I wanted to reach out and express my appreciation for the time and effort you and your team put into preparing the business proposal. It was detailed, thorough, and showed a great deal of thought.

However, [give a reason], we have decided not to proceed with this proposal at this time. I want to apologize for the disappointment this may cause you and your team.

Please know that we value the quality of work you provide and the reputation of your company. We would welcome the opportunity to work with you in the future, and we’ll keep your company in mind if a project comes up that could use your team’s expertise.

Thank you again for your time and effort, and we wish you continued success in all your endeavors.

Best,

[Name]

Reject business proposals without burning bridges

Turning down a business proposal politely isn’t so hard.

Acknowledging the effort that goes into it and clearly explaining your reasons can go a long way.

The tips and templates above will help you write a clear, respectful message.

If you find yourself receiving these emails, dedicated proposal software can help write proposals that don’t get rejected.

Writing rejections is never fun, but learning how to politely reject a business proposal without burning bridges is an important skill for anyone in business to master.

Disclaimer

PandDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDocs services are governed by our Terms of Use and Privacy Policy.