Craft Your Business Description [Business Plan Basics #1]
In the Intro Part B of Business Plan Basics , we gave you 10 great questions to reflect on to help you identify and articulate your big idea and what your dreams for it are. If you haven’t answered those questions yet, we recommend you go back and do that before actually getting started on developing your business plan.
If you have, and you’re ready to get down to the business of business plan writing, read on!
A typical business plan has 9 different components:
1. Executive Summary
2. Business Description
3. Industry Analysis
4. Market Description
5. Competitive Analysis
6. Marketing Plan
7. Design & Development Plan
8. Management Team
9. Financial Plan
Sound intimidating? If so, don’t worry. We’re going to walk you through each step one-by-one and show you how it’s done so you can go back to your own idea and draft a plan that will help you push your idea forward.
Although the first piece of the business plan listed above is the Executive Summary, we’ll come back to that at the end of the process. Because the Executive Summary pulls out the highlights from the rest of the plan, it’s much easier to tackle it once you’ve got a completed draft.
The Business Description
Instead, we’re going to start with the Business Description or Company Profile.The Business Description gives the reader an overview of your company or idea, which includes a more detailed look at exactly what’s at the heart of your concept and how you plan to create a business around it.
Things you’ll want to include are: your product, idea, or service, how you’ll distribute it, why you and your partners (if you have them) are passionate and perfectly positioned to move forward, and important statistics about the industry itself and who the audience or user for your idea is. But don’t go into too much detail here on info about you, the industry, and customers…you’ll have a chance to flesh that out later on in the plan.
Lastly, you’ll want to summarize your thoughts around profits – how much profit you think you can make, why you think you can make it, and how you’ll use that profit (will you put it back into supporting the company’s growth?).
A few specific things to note when writing out your Business Description:
- Length: Think short essay over term paper. The Business Description can be anywhere from a few paragraphs to a few pages long. But as a general rule of thumb, stick to the less-is-more approach and err on the side of brevity – 4 pages would be the absolute max.
- Voice: Write the Business Plan, and all other pieces of your Plan, in the third person. In other words, don’t use the word “I” or “my.” Refer to yourself, and the company, as if you’re writing about it, not as if you are it.
- Business Structure: Be sure to include what the “structure” of your business is. Meaning, are you a sole proprietor (you are the one and only person behind the company), a partnership (you’re formally collaborating with someone else), or a corporation (you’ve filled out the legal paperwork to actually incorporate your company)?
To help you get started, print out our Business Description Worksheet and answer the questions. When you’re finished, you can use the worksheet as an outline for your first draft of your actual Business Description. And don’t forget to keep us posted on your progress and let us know if you run into any problems as you work on this important business plan component!