The business description follows the executive summary of a business plan. It isn’t the place for excessive use of adjectives. Although you want to portray your business in the best light possible, you don’t want to seem desperate. Excellent business descriptions have four components: industry facts, business structure, product description, and business concept.
You should know all the intricacies related to your industry. Focus on the industry’s present state and future outlook. Is it an emerging market? Is it projected to grow over the next 5 years? Find out as much as you can about new products or developments in the industry that may affect your business. Link all of your information to credible sources so that the reader can take you seriously.
Business structure is two-fold. You need to consider the type of operation and the legal structure. Types of operations include: wholesale, retail, food service, manufacturing, service-oriented and so on. A business has one of the following legal structures: sole proprietorship, partnership or corporation. Include your organizational structure, location, hours of operation, number of employees and a brief history.
Describe what you’re selling and who you’re selling it to. Give as much details about your target demographic as possible. This description should include a problem statement that details how your product or service solves a problem your target audience faces. Detail the features and benefits of your product or service. The key questions you need to answer are:
- What differentiates my product or service from the competition?
- What about my product gives it a competitive edge?
- How does my product benefit the consumer?
Business is all about making money. Clearly and concisely explaining how your business will earn a profit is crucial. Your business concept details your operation and distribution processes, and the indicators you will use to measure success. Ensure that you include the vendors, suppliers and employees you intend to work with. Detail how you will keep costs down without compromising on quality. Investors want to know how you can make maximum profit at minimal cost.
The business description sets the tone for the rest of your business plan. It must have the aforementioned components. Use our template at 123Biz Plan to help you write an effective business description.