Business Plan: Company Description
What is the company description?
The Company Description explains who you are, what you do, and why your business matters. It outlines the key components of your business, including defining business operations and your legal structure (such as LLC, corporation, or sole proprietorship). The company description will also indicate your location and outline the products and/or services provided. This section also summarizes your mission and long‑term vision, so the lender will understand the purpose driving your work.
Why is it important?
An effective company description can show the lender how important the business/mission is to the owner, which often indicates the likeliness for the owner to persevere through tough times for the business. Highlighting your passion and your commitment to running the business over the long term supports the viability and sustainability of the business. Amazing five-year projections will not mean anything if the lender isn’t confident the owner of that business has what it takes to make it five years in that industry. Sharing why this business is personally important to you, how your background, values, and experience equip you to lead it successfully will supplement every other section of the business plan.
A strong company description may reduce the risk perception of the business model. For example, a business owner starting a DODD business simply because they’ve seen an open opportunity, doesn’t present to have the same level of care as a business started by an owner because their loved one was mistreated at another DODD facility. Lenders seeing the inception, the work went into creating, and how far the business has already come, provides a better opportunity to believe in how far it can go.
Key considerations for a company description
Describe how the business started
o Indicate time started, and time researched prior to business creation if applicable
o Indicate any and all personal investment into building the company
o Indicate any personal developments illustrating a personal connection to the mission of the business (example, starting up a gym and the owner personally lost 200 pounds)
Outline how business ideas grew and evolved, describe notable milestones, from early concept to current reality.
Briefly outline how the products and/or services were created and align with the mission
State location and indicate how it may be beneficial to the success of the business
o (Home-based saves business rent expense, location has a high traffic, or temperature fits the product or service provided)