Nobody does what you do better than you, but … what is it that you do again? You might have trouble describing your business in one sentence, or you find yourself at a loss for words when it comes to writing a company description. Knowing how to write a company description for a business plan helps you communicate with lenders, investors, employees, and potential customers.
You put a lot of thought into your original business concept. Now you need to know how to succinctly describe your business.
A company description is just one part of your small business plan. The business plan outlines your goals and how to achieve them. According to the Small Business Administration, a successful business plan should include:
A business description provides an overview of key aspects about your business, like what you do and what makes your business original. Anyone reading your company description should have no problem understanding the scope of your business idea.
Lenders and investors should see how your business has a place in the market, as well as its benefits to future customers.
Your business description should be regularly updated as your business expands or changes.
You need to know how to pitch to investors and lenders to captivate their interest. Your information should answer who, what, where, when, why, and how right off the bat.
Who are you? What is the name of your business? You want to verify that the name of your business is clear in the business description of your business plan. And, include your name because lenders and investors want to know the entrepreneur who started the business.
Who is your target customer? When you describe your business, make sure you know who you appeal to. If you don’t know your target customer, there’s a chance that nobody will have interest.
What is your product or service? If lenders and investors can’t understand what you’re selling or how it’s significant, they might pass on your concept. Be clear when you tell lenders and investors about your business.
What are your goals for your business? Set realistic short-term and long-term goals. If you plan on selling $20,000 worth of products by the end of the second month after opening, include the goal.
Where is your business located? If you are currently operating your business, you need to say its location. Likewise, if you are opening a new business, make sure you state where you want it to be located.
When will you implement your business plan and see results? Say when you want to open your business (or when you opened it). And, include when you plan to achieve your goals. Once your goals are achieved, what is your exit strategy for small business? Do you know how to turn your growing business into a profitable venture?
Why would potential customers want to buy from you? Explain why you are set apart from the competition. This is where you can describe your business’s originality. Lenders want to know why consumers would want to make a purchase at your small business instead of a competitor’s.
You also need to include your business’s mission statement. A mission statement helps set you apart from competition and explain why your business is unique.
What type of business structure will you form? Will you function as a sole proprietorship, limited liability corporation, partnership, or corporation? Explain why you chose your business structure. Mention the small business advisor help you have enlisted, like a business attorney, since each structure has different registration requirements, regulations, and liabilities.
And, how do you plan to achieve the goals you set for your business? Explain what steps you will take to make your business a success.
If you need to know how to write a company description for a business plan, take a look at this example.
Ann’s Office Hut delivers office supplies to small businesses in Boston, Massachusetts. The business is a sole proprietorship, operating under entrepreneur Ann Smith. Ann’s Office Hut is located in Boston, Massachusetts and will begin operation in February.
Ann’s Office Hut recognizes the busy lives of small business owners and wants to bring essential items like printers, cash registers, paper, ink, and envelopes to their doorsteps. Ann’s Office Hut will conveniently provide office supplies to small business owners who are short on time. Other office supply stores cannot match the convenience Ann’s Office Hut will give.
The business hopes to have gross sales of $30,000 by the end of one year and $95,000 by the end of five years. In order to achieve this goal, Ann’s Office Hut plans on offering referral credit.