The is the third article in a series of posts focused on deconstructing the essential elements of creating an effective Business Plan.
Business Planning Articles
The General Company Description Examined
The General Company Description represents the second component entrepreneurs must consider when crafting their Business Plan, and directly follows the Executive Summary. The difference between the two sections rests in the detail.
A General Company Descriptions should provide a more thorough overview of each component that makes up your business and span approximately 2 pages in length.
The topics a General Company Description should cover are listed below:
What & How:
First, entrepreneurs should describe what their business does, the industry their business operates in, briefly describing the product or service the business provides, followed by how the company intends to make money.
The next portion of the General Company Description rests on formulating a brief mission statement in usually 30 words or fewer. The mission statement should provide a reason for the business’ existence and offer some insight into the guiding principles of the company.
An example might be:
Our mission is to provide the highest quality product that redefines the user-experience people are accustomed to within our industry.
Company Goals & Objectives:
Next, entrepreneurs should describe the goal of the business. Where the leadership of the business wants to position the company, the broad long-term company objectives, and the milestones that will indicate whether the business is on the right path towards achieving it's objective.
An example might be:
Our goal is to become an industry leader in our category with a loyal customer base, known for our superior products and excellent customer service. Our objective is to achieve X annual sales and attain a high measure of customer satisfaction.
The next component involves coming up with a business philosophy. This means describing what the primary motivational factor is for creating and leading your business, and for whom you are making the product or service your business offers.
An example might be:
We started our company X to provide a unique service that improves the lives of our customers who love Y, with the aim of cultivating a more interdependent and sustainable world.
Entrepreneurs should then clearly describe the industry they operate in, and whether it is a growth industry. Followed by accurately describing the short term and long term changes they foresee in their industry, and how the company will be positioned by its leadership to take advantage of these probable changes.
Core competencies involve describing the important business strengths that differentiate the company among others in the industry. Entrepreneurs should describe what factors will make their company succeed, what they think the major competitive strengths of the business are, and what background, experience, skills and strengths they personally bring to their new venture.
Legal Form of Ownership:
The last component to include in your General Company Description is the type of ownership your business is structured as, in other words the legal entity. These include; Sole Proprietor, Partnership, C-Corporation, S-Corporation, and Limited Liability Corporation (LLC). Entrepreneurs should provide a brief explanation of why the type of legal entity was selected for their business.
The General Company Description should effectively summarize your business in a way that educates the reader so that they can easily understand your broad company vision.
A section represents a tool that provides perspective for readers about your business, who are often potential investors or partners.
The goal of the document is to provide context to all the subsequent parts or your Business Plan, and the sections of the General Company Description should, in principle, reflect the structure of your entire Business Plan.
It is important to keep sentences clear and concise. Entrepreneurs often fall prey to describing their business in overly complex ways that muddle the essence of their intended message.
So take your time when tackling this subject and routinely reduce sentence size.
Each component of the company description should only provide the "essence" of it's subject matter.
As with many other promotional materials, practice writing your General Company Description many times over. Ask people of different backgrounds to read the document and provide feedback in order to make sure that it effectively communicates your vision.
Lastly, make sure to keep your General Company Description up-to-date so that it is accurately reflective of what your business has achieved, what your company is currently doing, and what your team aims to accomplish.
Share your thoughts!
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