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 find yourself at a loss for words when 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.
Where better to describe your business than in the company description business plan?
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 the following:
Another thing to note about business plans is that you can’t write one and be done. Your business is always changing. And that means your business plan is always changing, too. Be sure to update it regularly.
A company description provides an overview of key aspects of your business, like what you do and what makes your business unique. Anyone reading your business description should have no problem understanding the scope of your business.
Lenders and investors should see how your business has a place in the market, as well as its benefits to future customers.
Your business’s mission statement is the part of your company description that you want the public to see. And, you should include your vision statement, too.
Regularly update your company description as your business expands or changes.
You need to know how to pitch to investors and lenders to captivate their interest. Your description should answer who, what, where, when, why, and how right off the bat.
So, do you know how to write a business description? We’ll walk you through the 5 W’s (and 1 H) to consider when drafting your first copy.
Who are you? Who is your business? Verify that the name of your business is clear in the business description section of your business plan. And, include your name (and the names of any other owners) because lenders and investors want to know the entrepreneur behind the business.
Who is your target customer? Who are you selling to? When describing 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 be interested in your business.
What is your product or service? If lenders and investors can’t understand what you’re selling or how it’s significant, they may pass on your concept. Be clear, narrow, and focused when telling lenders and investors about your business.
What are your goals for your business? Set realistic short-term and long-term goals. For example, if you plan on selling $20,000 worth of products by the end of the second month, include the goal in your description.
Where is your business located? If you are currently operating your business, list the address. Likewise, make sure you state where you want your business to be if you are still looking for office space.
When will you implement your business plan and see results? Include when you want to open your business (or when you opened it).
When do you plan on achieving your goals? Also, talk about the timeline for your main goals (both short-term and long-term).
When do you think you’ll leave your business? Don’t forget to discuss your exit strategy. Whether you plan on retiring in 20 years, selling your company in 15 years, or closing it down in 10 years, be clear about when you plan on parting ways.
Why would potential customers want to buy from you? Explain why you are different from the competition. This is where you can describe your business’s originality. Lenders and investors want to know why consumers would want to make a purchase at your small business instead of a competitor’s.
Why are you in business? Also make sure you include your business’s mission statement. A mission statement defines why you’re in business and what your goals are.
How are you going to structure your business? Which business structure will you form: sole proprietorship, LLC, partnership, or corporation? Explain your structure decision, too. Mention any small business advisor (e.g., business attorney) you work with to help with registration requirements, regulations, and liabilities.
How are you going to achieve the goals you set for your business? Are you going to hire employees to help you, or will you handle all responsibilities on your own? Talk about what steps you’ll take to reach the goals you outline.
How do you picture your company in the future? Include your business’s vision statement in your company description. A vision statement is an internal description that states what you want your business to look like in the future.
Still unsure? Take a look at this business description example for more information:
Ann’s Office Hut delivers office supplies to small businesses in Boston, Massachusetts. The business is structured as a sole proprietorship, operating under entrepreneur Ann Smith. Ann’s Office Hut is located in Boston, Massachusetts and will begin operations 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. To achieve this goal, Ann’s Office Hut plans on offering referral credit.
Writing the business description portion of your business plan should be fun … even though it may feel more like a chore. But, this is your opportunity to talk about your business idea and get other people (i.e., lenders and investors) on board.
Here are a few final tips to keep in mind when learning how to write a company description:
This article has been updated from its original publication date of December 9, 2016.
This is not intended as legal advice; for more information, please click here.
