To give readers more information on what your business actually does, the next section of your business plan after the executive summary should be a company overview describing your business.
You probably spend most of your waking hours thinking about your business. You understand what you do, how you do it and why you do it better than anyone else. When you're writing your business plan, you have to think about your business from an outsider’s perspective. The people who will be reading your plan know nothing about your business except: (1) what they know about similar businesses, if there are any, (2) what they have read in the news, if your company has received any press, good or bad and (3) what they assume they know about your company, which may or may not be accurate. You need to clearly explain everything a lender or investor might want to know and give them your story to overwrite any misconceptions they might have.
Start with the basics. What does your company do? What neighborhood, city and state is it located in? What is its unique selling point? Include your mission statement, which should describe your company's purpose, values and goals.
Essential Business Details: Location, Contact Information, Legal Structure and Ownership
Provide your business's legal name, operating name, contact information (address, phone number, fax number, website address, email address), and the name of at least one contact person. Also include the names of any owners other than yourself and the names of your lawyer, CPA and insurance agent, if applicable. State what your business’s legal structure is (e.g., corporation, partnership, LLC, sole proprietorship), who owns it and what percentage of the company each entity owns.
When and how was your company formed? Provide a brief history and outline its key players. Who came up with the idea and what inspired them? Who joined the company and when, and what have they contributed? What goals has the company achieved so far? The company history section is a good place to get readers excited about the story behind your business. The websites of many companies provide great examples that you can follow.
The Zappos website, for example, tells the company’s story as follows:
The year was 1999, and our founder Nick Swinmurn was walking around a mall in San Francisco looking for a pair of shoes. One store had the right style, but not the right color. Another store had the right color, but not the right size. Nick spent the next hour in the mall, walking from store to store, and finally went home empty-handed and frustrated.
At home, Nick tried looking for his shoes online and was again unsuccessful. Although there were a lot of "mom and pop" stores selling shoes online, what was interesting to Nick was that there was no major online retailer that specialized in shoes. So, since it was 1999 and anything seemed possible at the time, Nick decided to quit his day job and start an online shoe retailer... and Zappos.com was born!
Products and Services
What products and/or services does your company sell? In this section, you must explain what, exactly, your business does. "We run a grocery store" is not sufficient. Be specific: "We run the only grocery store in the greater Springfield area that exclusively sells foods grown or produced within a 100-mile radius." The latter description not only explains that you are in the grocery business; it also says why your business is unique and shows that it serves a potentially untapped market.
Relate the problem your business solves for consumers, and state the facts you have gathered to support this problem’s existence. For example, describe the limited availability of locally grown and produced foods for purchase despite the abundance of farmers and artisanal food producers in the area. Describe the demand for these products and how your business would make them accessible and affordable. List the foods you will sell: cage-free, farm-fresh eggs; locally caught wild fish; grass-fed beef; local clover honey; artisanal balsamic vinegar; in-season fruits and vegetables; and so on. Then, describe how you will source these products. If your store will offer additional services such as catering, gift baskets, hot meals, a deli, a bakery or a florist, describe those as well. Finally, are there products or services that you do not currently offer but may offer in the future?
Tone and Level of Detail
The business description provides greater detail than the executive summary, but it is still essentially a summary. In later sections of the business plan, you will get into the fine points of industry analysis, your marketing and sales plan, your organizational and operational plan, and your financial plan.
Keep in mind that the reader doesn't care about your lifelong dream to open a local foods store. They want to know how you will make the business profitable and why they should invest or lend you money. Your description should be based on facts, not feelings. Every fact you present should be specific, detailed and supported by primary research your company has conducted, by your actual business experience so far and by credible secondary sources.
In the next section, you will learn how to present your industry analysis.
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