Next Article: Business Plan, Part 4 (Market Analysis)
Back To: BUSINESS PLANS
What should I consider in drafting the General Company Description?
This is where you tell about the company you plan to be. In this section, you describe what your company does. You can go into detail about your product service or idea. But, this is just the beginning. You have to describe what your business will be. What do you hope to accomplish or where do you hope to take your business? What problem do you plan to solve? What need or want do you hope to satisfy? You can weave your product, service or idea into your intended markets or customer segments? In short, tell about your value proposition and to who it pertains. Then move on to the goals you set ahead of your business and the principles that will guide you in reaching those goals.
Overview of the General Business Description
Start by laying out in simple terms what you do. That is, tell what problem you will solve, need you will satisfy or want you will fulfill. Before you can begin to explain your product or service and how it works, you have to lay out the value you intend to create. Imagine describing a stapler for the first time without first stating that you have created a revolutionary manner to clasp individual papers together without the use of bindings. You have to understand what it will do before you can go about describing the apparatus.
This is a great litmus test for how well you understand your product or service and the value that it creates. If you have to hesitate and think about exactly the specific need or want that it fulfills, then you don’t have a sufficient understanding of your business. This is equally a problem if your hesitation comes from the fact that your product or service could solve multiple problems or address multiple needs and wants.
The bottom line, you must be able to concisely state what your business does and for whom.
Tell About Your Products and Service
Now you can tell about how the product you have designed or how the service you have developed is going to address the customer’s problems, needs, or wants. Start by giving a general description of the product or service and the individual components. You will gradually add more detail or build upon how your product or service process works.
After writing a thorough description of your product or service, you can move on to introducing a technical description of your product or a detailed statement of how you will deliver your service. If your product involves patents or technical diagrams you may want to make reference to them in this section and append them to the end of the business plan. If your process is complicated, this is where you can integrate diagrams, flow charts, or process matrices.
You may wish to include specific information about how the business will be organized and managed. This can include business structure and ownership arrangements. The explanation may include the reasons for organizing in a certain manner or choosing a specific type of business entity.
Basic Strategic Position of the Business
You can now begin to explain how your product or service will be able to compete or address the problem, need, or want better than the alternatives that exist. You will address the full strategic analysis later in the business plan. In this section, you want to lend support to your value proposition by expressing what your product or service does and how it does it better than those already in the industry. Later, in a more detailed competitive analysis, you will address the major players and competitors who control parts of the market.
Incorporate Your Company Goals and Missions Statement
The best way to understand where you are in your business is to compare it to where you want to be. When you are a business intended on growing you must have a clear path of where you want to go. Most businesses identify their objectives in a mission statement. The mission statement should be a concise statement of the company’s goals and the principles that will guide its growth. Many people see the business’ mission statement as more symbolic than practical. However, the mission statement can serve a very practical purpose in providing a path for a growing and evolving business.
You may wish to expand this section further to include a business philosophy. Is your business guided by principle or belief? If so, without incorporating the business’ philosophy directly into the planning documents it may become difficult to incorporate maintain those principles as the business grows and evolves.
Conclusion: In this section, you have laid the foundation for what the company does and how it will create and transmit value to the client or customer. The parts of the business plan that follow will add a greater explanation to how this value creation is possible, will be carried out, and what the results of the venture will be.