A business description is a snapshot of your business. It answers the who, what, when, where and why in a clear, concise manner. So the shorter, the easier it is, right? Not always.
In fact, sometimes it can be more challenging to say little – especially when you’re passionate about something and eager to share all the details. Don’t worry, though; there is plenty of time to elaborate. Many of the same things you mentioned in the business description have their own dedicated sections within your business plan.
Understand its purpose
A business description can help potential investors and partners understand your business strengths, leadership team, current goals and plans for growth. As part of a complete business plan, it follows the executive summary. But while a business description is the physical second section of the overall plan, many business owners put it first and write the executive summary after all the other sections.
The details of each business description may vary from business to business, but they generally contain the same basic information. Keep in mind that while it may seem like a lot, most of the items listed are very short:
- Business name — Provide the official name of your business as stated in your state’s business registration documents.
- location — Include the address or business address if there are multiple locations. If you’re still looking for a location, show where you’re looking. Be sure to specify if there is a head office or corporate office.
- Business structure — Discuss how your business is set up. Is it a proprietorship, LLC, partnership, cooperative or corporation?
- Ownership / management group — Introduce yourself and the other owners, as well as the leadership or management team. This is your chance to detail your collective experience and achievements.
- Mission and vision — Quickly state your business mission — what you’re trying to accomplish, and what the products or services your business fills in today’s market lack. And the vision – where you want to take your business in the future.
- Company history — Give a brief overview of when and why you started the business, as well as any changes in its size, structure and operations since its inception.
- Product/service overview — Briefly talk about the products and/or services you provide without going into too much detail. There is a separate product/service section in the business plan that will allow you to expand on it.
- Target market / customer — Share who you provide these products and services to. Be sure to list any primary or secondary groups you are trying to target. Keep it simple. You have a chance to talk more about them in the customer section of the business plan.
- Company strengths — Show potential investors / partners what makes your business unique. This section may require some research on your part. It’s important to know what the competition is doing, so you can highlight what your business is.
- Plans for growth — Tell investors where you see your business in one year, five years or even 10 years. Investors want to feel confident that you have a plan for the future so they can visualize their return on investment.
Start small
People are busy, especially potential investors or partners who might be reading your business description. It is important to get their attention quickly and give them the information they need in a clear and concise manner.
A good way to do this is to start with something called an elevator pitch. If you are not familiar with the term, it refers to a quick statement of what your business is, what products or services it provides and to whom it is provided. Its name is a reference to a conversation you might have in an elevator ride with someone asking about your business. For this reason, it should be short – usually two to three sentences. Imagine riding from the lobby to the fifth floor, not the penthouse of a skyscraper.
This opening statement usually includes the name of the business, the products or services it provides, where and how it is sold, to whom it is sold and what makes it unique. An elevator pitch for a new ice cream shop might sound like this:
