A business description is a snapshot of your business. It answers the who, what, when, where and why in a clear, concise way. So the shorter it is, the easier it should be, right? Not always.
In fact, sometimes it can be even more challenging to say less — especially when you’re passionate about something and excited to share all the details. Don’t worry, though; there will be plenty of time to elaborate. Many of the same things you talk about in the business description have their own dedicated sections within your business plan.
Understand its purpose
A business description may 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 physically the second section of the total plan, many business owners tackle it first and write the executive summary after all the other sections have been completed.
The specifics of each business description may vary from business to business, but it generally contains the same core information. Keep in mind that while it may look like a lot, most of the listed items are very short:
- Business name — Provide the official name of your business as stated on your state’s business registration documents.
- Location — Include the business address or addresses if there are multiple locations. If you’re still searching for a location, indicate where you are looking. Be sure to specify whether there is a headquarters or corporate office.
- Business structure — Talk about how your business is set up. Is it a sole proprietorship, LLC, partnership , cooperative or corporation?
- Ownership/management team — Introduce yourself and other owners, as well as the leadership or management team. This is your chance to elaborate on your collective experience and accomplishments.
- Mission and vision — Quickly state the mission of your business — what you’re trying to accomplish, and what void the products or services your business fills in the marketplace today. And the vision — where you want to take your business in the future.
- Company history — Provide 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 upon them.
- Target market/customers — Share to whom you are providing these products and services. Be sure to list any primary or secondary groups you are trying to target. Keep it simple. You will have an opportunity 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 how your business stands out.
- 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 that they can visualize their return on investment.
People are busy, especially potential investors or partners who may be reading your business description. It’s important to grab their attention right away and provide them with the information they need in a clear and concise way.
A great way to do this is to start with something called an elevator pitch. If you’re unfamiliar with the term, it basically refers to a quick statement of what your business is, what products or services it provides and to whom it provides them. Its name is a reference to a conversation you might have during an elevator ride with someone who asks about your business. For this reason, it should be brief — usually two to three sentences. Think a ride from the lobby to the fifth floor, not the penthouse in a skyscraper.
This opening statement usually includes the business’s name, the products or services it provides, where and how they’re sold, whom they’re sold to and what makes them unique. An elevator pitch for a new ice cream shop may sound something like this: