How to Graciously Decline a Business Proposal

If you are running a business, there are certain times when you will need to purchase products or seek services from external sources to keep up with your company’s daily production demand. In case this happens, you will have to write a request for proposal letter to formally invite the companies you think have the right resources and capabilities to meet your standards.

When writing a request for proposal, it is important to ascertain that it is doable and that it provides accurate details. By doing so, the bidders can easily see where their products and/or services fit and how they can provide solutions for your company’s needs.

Once you have taken the time to evaluate their business proposals, you will have to determine which outsourcing company can benefit your business the most. Of course, you will have to consider the profitability and convenience of your potential business partnership. And since the process of selecting the best business proposal is a sort of competition, you will have to choose the one that you think is able to meet your standards and demands. On the other hand, you need to graciously decline the business proposal from other companies through rejection letters.

How to Write a Polite Proposal Rejection Letter

The process of writing a rejection letter can be difficult; but it is normal and polite to inform the hopeful companies about the news. You can send a proposal rejection letter through email or send it by the old-fashioned snail mail.

Although a rejection letter oftentimes does not bear welcome news, failure to inform the bidder of the bad news can make the situation worse. You may lose the opportunity to work with these companies in the future because you never took the time to inform them of your decision.

So no matter how hard it is on your part to dash someone else’s hopes and expectations of doing business with you, you just have to do it. To make it easier and less stressful, we have provided a guide on how you can write a gracious and polite rejection letter that would make it less disappointing for the recipient.

1. It should be formal.

No matter how you see it, a proposal or bid rejection letter will always be a formal business document. In the letter, address the person by their full name. By doing so, you show your respect to the person to whom you are writing.

2. It should be straightforward, but polite.

Although you may feel guilt for not accepting their business proposal, you must be direct to the point but in a polite manner. We understand that you do not want the person to feel bad about being rejected but at the same time, you do not want to leave them with a vague message that can only make the matter more confusing to the reader.

3. Keep it short.

When writing a business rejection letter, it is important to always keep it brief and concise. Business experts suggest to state the reasons for declining their proposal as clearly and politely as possible and make sure not to make it sound personal.

4. Check it with your legal counsel before sending it to the recipient.

Asking your legal counsel to check that the letter ensures that you are not violating any legal codes. Although many companies do not practice this method, it can potentially save you from any legal backlash that can put your company in jeopardy. It is always better to be safe than sorry.

5. Send a thank you card along with your letter.

The bidder may have taken a lot of time drafting their business proposal in the hopes of impressing you with their offer. It is only right to send them a thank you card to show your gratitude for their effort and patience.

Sample Rejection Letter Templates:

Contractor Bid Rejection Letter


Project Bid Rejection Letter


Business Proposal Rejection Letter in PDF


Bid Rejection Letter


Formal Project Rejection Letter


Bidder Rejection


Concluding Thoughts

We hope that you have gained some understanding on the importance of writing a business proposal rejection letter and learned the techniques on how to write one politely.

While a lot of people do not find writing a rejection letter a pleasurable task, informing hopeful companies of the bad news can save your company’s reputation. You also gain more respect from your fellow businessmen.

Also, do not forget to check out and download our application rejection letters should you need it.

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