Everything You Need to Know About Business Description
A business description is included in a small business plan. It outlines objectives and how to achieve them.3 min read
2. Questions to Ask and Answer When Creating a Business Description
3. What Goes Into the First Paragraph of a Business Description?
4. The Importance of Citing Your Sources
5. Proofreading the Business Description
A business description is included in a small business plan. It outlines objectives and how to achieve them. The Small Business Administration states an effective business plan will generally include:
- Executive summary
- Company description
- Service or product
- Organization and management
- Small business market analysis
- Marketing and sales
- Funding request
- Financial projections
What is a Business Description?
In most business plans, the company description is included in the section that directly follows the executive summary. The business description is meant to provide an overview of the business, including what the business does and how the company is unique from others in the same industry. This description provides extensive details outlining the business. In addition to outlining goals and how the goals are going to be met, it includes where the company is located and how many people are going to be employed.
It also gives a detailed overview of the vision and direction of the business; this helps lenders and stakeholders develop a realistic picture of who and what the business are. A business description varies from one company to the next. Generally, though, it will need to look similar to the following:
- The official name of the business
- Where the business' operations are going to be conducted
- Type of structure (sole proprietorship, LLC, partnership, or corporation)
- Names of the people who own the company and any senior-level employees
- The address of the company's headquarters
- Date the business was started
- How the company came to be
- Goals the company needs to meet
- Mission statement; this outlines the purpose of the business
- What is being sold and the market segment being targeted
- Future goals (both short- and long-term)
- Vision statement; what is your vision of the company's future
Questions to Ask and Answer When Creating a Business Description
You can ask and answer the following questions to help you create a detailed business description:
- Why should consumers purchase my product?
- Who am I targeting?
- What avenues of communication are in place for me to communicate with customers?
- What services and products am I going to sell? Are there certain products and services that I don't sell that my targeted audience may expect me to sell?
- Where is my business going to be located?
- Where am I going to source the products/services I am selling?
- What will my hours of operation be? Is anyone going to be working for me? If so, who are they and how will I pay them?
- Who is going to handle core operational tasks, like accounting, advertising, and shipping?
- What forms of marketing am I going to use to promote my company?
- Who are my competitors? What are their strengths and weaknesses?
- What is it about the business that makes it unique from the competition? (this question needs to be answered from the viewpoint of a customer)
What Goes Into the First Paragraph of a Business Description?
The first paragraph of a business description needs to be extensively detailed, capturing pertinent information about the business. It's in this paragraph that you want to ensure the name of the company is clearly stated. In addition, make sure to outline the present outlook of the company as well as its future potentials.
It is also helpful to include information and data on the markets you intend to offer your products/services in. Furthermore, you should detail any products or developments that are expected to hit the market that could have an impact on your company, whether it be a positive or adverse impact.
The Importance of Citing Your Sources
All of the observations you make should be made using reliable data; include sources to this data in footnotes. You will need to provide these footnotes if you are seeking funding for the company. The investor will want your sources to ensure you are not making projections based on assumptions. Your goal is to captivate their attention and entice them to invest in the company. As you are creating the business description, make sure to outline its structure. Are you a retail company? A manufacturing business? Accounting firm? Are you service-oriented?
Proofreading the Business Description
You should always have your business description proofread. This proofreading should take place by a person who has not been part of creating the business plan; this allows a fresh set of eyes to examine the description for any typos and grammatical errors.
If you have questions about creating a business description or if you need help developing one, post your legal need on the UpCounsel marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.