How to write a business description that makes your business plan shine
- A business description is a high-level overview of your company that you include in your business plan
- Your business description should entice readers—like lenders and investors—to look through the rest of your business plan to learn more about your company
- Business descriptions should be concise, error-free, and include only pertinent information about your company
Most successful businesses have one thing in common—they all have a buttoned-up business plan. It lays out the goals of the company, how a company will reach those goals, and when these goals will be realized. And while there are many sections of a business plan, a well-written business description is one of the most important parts.
However, some small business owners may not know how to write an effective business description. Luckily, there’s an easy formula to follow along with a few tips for writing an impactful business description.
What is a business description?
Also called a company description, your business description summarizes what your company does, its purpose, and what makes it unique. It’s a critical component of your business plan and immediately follows your executive summary. Since it’s one of the first pieces of information a reader will see, it must make a great first impression.
The goal of your business description is to inform readers—like lenders, investors, potential partners, and even employees—how your business benefits consumers and what place your business has in the market. Your business description should give readers a clear understanding of your business and its functions.
Why is a business description important?
A business description is important because it gives readers a single place to learn the details about your company. A well-crafted business description can intrigue readers and encourage them to read the rest of your business plan.
Investors or lenders will have one major thing on their minds—return on investment. They want to know if your business has the potential to be successful and whether it’s worthy of their investment dollars.
Your business description is your first opportunity to wow these investors or lenders and show them why your business will be profitable. It can pique their interest and push them to dig into the rest of your business plan.
What to include in a business description
An effective business description should include information that tells readers exactly what your company does, who is in charge of operations, and what will make your company successful. It should also tell readers what makes you different from competitors and why customers will come knocking at your door with their business.
Below, we’ve outlined every piece of information you should include in your business description. We’ve also created a hypothetical scenario for a hamburger restaurant and added a business description example for each step.
List the official name of your business as it’s registered with your state. Also include the names of the owner(s) and other key members of your management team.
Example: Jay’s Organic Burger Joint, owned and operated by Jacob Doe
Detail the purpose of your business and what you’re aiming to achieve with your venture. These should be realistic short- and long-term goals.
Example: Jay’s aims to grow local brand awareness by 20% and forge partnerships with four additional local suppliers in the next year. The company also intends to expand operations to an additional location in the Chicago area and is seeking an investment of $200,000 in exchange for equity in the company.
Have a thorough understanding of who your target market is. Explain who you’re selling to and why they will buy your product or service. Dig deeper into their needs and motivations so you can predict their purchase behaviors. Identifying the demographics of your target market, such as age group, income, and interests, can give you a competitive edge and attract loyal customers.
Example: Jay’s understands that its customers are health-conscious but have busy lives with little time for preparing healthy meals.
Describe what makes your business unique from your competitors. Readers should understand why your company will succeed and make you a front-runner in the market.
Example: Unlike its competitors, the restaurant alleviates the target audience’s pain points by providing quick and easy meals that are also healthy for the entire family.
Business location and opening date
Include where your company is headquartered and where you will be conducting business. Also, share when you opened your business or when you plan on opening if you haven’t already.
Example: Jay’s Organic Burger Joint is headquartered in Chicago, Illinois and opened operations in April 2019.
Your mission statement tells readers why your business exists. It should highlight the motivations for starting your business and summarize your product or service, target consumers, and why you’re unique.
Example: Jay’s Organic Burger Joint is a fast-casual restaurant that serves the highest quality hamburgers to hungry and health-conscious customers in Chicago, Illinois.
Products or services
Highlight what products or services you’re offering customers. Also, discuss the benefits your products or services provide and what makes them different from competitors.
Example: The menu focuses on healthy meals using only organic ingredients and grass-fed beef.
List what type of business you’re operating. For example, this could be a sole proprietorship, partnership, limited liability company (LLC), or another type of corporation.
Example: The business is a limited liability company owned by Jacob Doe.
Once you’ve included all of these details in your business description, it should look something like this:
Jay’s Organic Burger Joint is a fast-casual restaurant that serves the highest quality hamburgers to hungry and health-conscious customers in Chicago, Illinois. Jay’s understands that its customers are health-conscious but have busy lives with little time for preparing healthy meals.
Unlike its competitors, the restaurant alleviates target customers’ pain points by providing quick and easy meals that are also healthy for the entire family. Jay’s uses local ingredients sourced from farmers in the greater Chicago area. The menu focuses on healthy meals using only organic ingredients and grass-fed beef.
The business is a limited liability company owned by Jacob Doe. Jay’s Organic Burger Joint is headquartered in Chicago, Illinois, and opened operations in April of 2019.
Jay’s aims to grow local brand awareness by 20% and forge partnerships with four additional local suppliers in the next year. The company also intends to expand operations to an additional location in the Chicago area and is seeking an investment of $200,000 in exchange for equity in the company.
How to write a business description
Not all business descriptions are made the same. There are a few tips to consider if you want your business description to stand out and wow your readers.
Have an elevator pitch
Your business description should kick off with an elevator pitch. An elevator pitch is typically spoken, but it helps to quickly summarize your company at the start of your business description. This pitch quickly covers the key aspects of your business and should be brief and persuasive. You should get straight to the point and immediately give readers your value proposition.
For example, Jay’s Organic Burger Joint could write something like “We serve the highest quality hamburgers and provide a convenient alternative for health-conscious customers who are always on the go.”
Keep it high level
Although you want your business description to be informative, you want to limit the amount of information you include in this section of your business plan. Keep it high-level and avoid going into too much detail. The subsequent sections of your business plan will cover the finer details. Remember, the goal is to give just enough information to entice readers to go through the rest of your business plan.
Show your excitement
This is your opportunity to show your excitement and give your business plan a human touch. Your business plan isn’t only selling your product or service to investors—it’s also selling you. Let your passion shine through as you explain why you started the company and what you aim to achieve.
Keep it short and concise
It can be easy to get carried away and make your business description too long. Avoid being too wordy, which can overwhelm the reader.
Business descriptions should only be a few paragraphs long for most types of companies. Remember, you’re trying to intrigue the reader and encourage them to read the rest of your business plan. If it’s too long, you’ll lose the reader’s attention.
Proofread for errors
Grammatical errors and misspellings can tarnish your company description. Even if you include all the right information, you won’t impress readers if it’s riddled with errors.
Make sure you proofread your business description before finalizing your business plan. Have someone else read through your business description and check for any typos or misspellings. You should also make sure it flows nicely and makes sense to the reader.
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Engage readers with your business description
A fine-tuned business description will kick off your business plan on a high note. Whether you’re launching a startup or already have your business up and running, knowing how to write a business description will provide a high-level overview of your company and can help you secure investment dollars from potential investors or lenders.
The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.