Company Description

You need to know how to pitch to investors and lenders to captivate their interest. Your
description should answer who, what, where, when, why, and how right off the bat.
So, do you know how to write a business description? I will walk you through the 5 W’s (and
1 H) to consider when drafting your first copy.

1. Who?
Who are you? Who is your business? Verify that the name of your business is
clear in the business description section of your business plan. And, include your
name (and the names of any other owners) because lenders and investors want to
know the entrepreneur behind the business.

Who is your target customer? Who are you selling to? When describing your
business, make sure you know who you appeal to. If you don’t know your target
customer, there’s a chance that nobody will be interested in your business.

2. What?
What is your product or service? If lenders and investors can’t understand what
you’re selling or how it’s significant, they may pass on your concept. Be clear,
narrow, and focused when telling lenders and investors about your business.

What are your goals for your business? Set realistic short-term and long-term
goals. For example, if you plan on selling $20,000 worth of products by the end of the
second month, include the goal in your description.

3. Where?
Where is your business located? If you are currently operating your business, list
the address. Likewise, make sure you state where you want your business to be if
you are still looking for office space.
4. When?
When will you implement your business plan and see results? Include when you
want to open your business (or when you opened it).

When do you plan on achieving your goals? Also, talk about the timeline for your
main goals (both short-term and long-term).

When do you think you’ll leave your business? Don’t forget to discuss your exit
strategy. Whether you plan on retiring in 20 years, selling your company in 15 years,
or closing it down in 10 years, be clear about when you plan on parting ways.

5. Why?
Why would potential customers want to buy from you? Explain why you are
different from the competition. This is where you can describe your business’s
originality. Lenders and investors want to know why consumers would want to make
a purchase at your small business instead of a competitor’s.

Why are you in business? Also make sure you include your business’s mission
statement. A mission statement defines why you’re in business and what your goals
are.

6. How?
How are you going to structure your business? Which business structure will you
form: sole proprietorship, LLC, partnership, or corporation? Explain your structure
decision, too. Mention any small business advisor (e.g., business attorney) you work
with to help with registration requirements, regulations, and liabilities.

How are you going to achieve the goals you set for your business? Are you
going to hire employees to help you, or will you handle all responsibilities on your
own? Talk about what steps you’ll take to reach the goals you outline.

How do you picture your company in the future? Include your business’s vision
statement in your company description. A vision statement is an internal description
that states what you want your business to look like in the future.
Business description example
Ann’s Office Hut delivers office supplies to small businesses in Boston,
Massachusetts. The business is structured as a sole proprietorship, operating under
entrepreneur Ann Smith. Ann’s Office Hut is located in Boston, Massachusetts and
will begin operations in February. Ann’s Office Hut recognizes the busy lives of small
business owners and wants to bring essential items like printers, cash registers,
paper, ink, and envelopes to their doorsteps. Ann’s Office Hut will conveniently
provide office supplies to small business owners who are short on time. Other office
supply stores cannot match the convenience Ann’s Office Hut will give.

The business hopes to have gross sales of $30,000 by the end of one year and
$95,000 by the end of five years. To achieve this goal, Ann’s Office Hut plans on
offering referral credit.