A clear, well-written business description gives your plan a solid foundation. It outlines who you are, what your company does, and how it operates within its industry. Whether you’re applying for funding, starting a new venture, or developing your strategy, this section introduces your business in a way that builds context and trust.
Business plans are often used to apply for government grants, bank loans, or investor partnerships. For these audiences, the business description must be accurate, concise, and focused on what matters most: your structure, purpose, and potential.
What Is a Business Description?
The business description explains the basics of your company. As such, it includes your name, legal structure, location, ownership, and mission. It essentially sets out the type of business you run, the sector you operate in, and the core products or services you provide.
If you haven’t yet written your executive summary, it may help to understand how this section complements it. While the executive summary gives a high-level overview of your plan, the business description fills in the who, what, and why behind the operation.
What to Include in Your Business Description
Keep your structure consistent. A good business description covers the following areas in a logical order. These details help readers understand not just what your business does, but how it’s set up and why it exists.
- Business name and legal status: State your registered name and legal structure, such as sole trader, partnership, or private limited company (Ltd).
- Location and establishment date: Mention where your business is based and when it was established. If you operate across multiple sites or regions, include that too.
- Ownership and management: List who owns the business and who manages day-to-day operations. For small businesses, this may be the same person; for others, detail your directors or partners.
- Mission and purpose: Describe what your business aims to achieve. Keep it practical and aligned with your broader objectives.
- Products or services: Provide a brief overview of what you offer. Don’t go into technical detail—that belongs in the dedicated product or operations sections later in your plan.
- Industry and positioning: Identify the sector you operate in and where your business sits within it. For example, a business in the food sector might position itself as a sustainable supplier to local cafes.
Adapting Your Description to Local Requirements
A business description should reflect the expectations and norms of the region you’re operating in. While UK and Irish businesses typically refer to structures like Ltd or Sole Trader, other countries may use formats like GmbH (Germany), SARL (France), or Srl (Italy).
Avoid using terms like “LLC” unless you’re specifically addressing a U.S. context.
If you’re targeting a specific region, demonstrate familiarity with its requirements. For example, anyone starting a business in Malta should reference local registration procedures, licensing, and tax considerations.
When preparing your plan for any local banks, government agencies, or funding bodies, show that you understand the economic and regulatory environment. This may include referencing public support schemes or cross-border setup considerations, such as those outlined on the EU’s business startup portal.
Make It Relevant to Your Sector
If your business is part of a regulated or specialised field, such as financial services, health, or business information technology, explain any necessary compliance, training, or background that supports your entry into the sector. Avoid buzzwords and focus on what matters, namely your credentials, structure, and direction.
For retail or product-based businesses, the business description might include your product category and your route to market. A candle business description example, for instance, might highlight handmade methods, materials used, and the type of retail environments you serve.
Describe Your Business Accurately, Not Like a Brochure
Your business description is not a sales pitch. Avoid promotional language or vague superlatives, such as world-class or game-changing. Instead, use clear, direct language to explain how your business works and where it fits.
Some people mistakenly write this section like a LinkedIn summary. While your business profile LinkedIn entry may be useful for networking, this section needs to be structured, objective, and free from marketing speak.
Writing Your Mission and Values
Your mission statement should briefly explain why your business exists and what it stands for. In one or two sentences, describe your core purpose. This is not a tagline or marketing pitch, but rather a focused summary of your business intent.
Examples of mission statements in your business description may be:
- To help small businesses manage their accounts with simple, affordable software.
- To bring locally sourced, handmade skincare products to conscious consumers.
- To provide reliable and flexible accounting services that help sole traders and small companies stay in control of their finances.
- To design and deliver clean energy solutions that support businesses in reducing their carbon footprint and energy costs.
- To offer accessible tech training for young adults, giving them the skills needed to succeed in a digital economy.
You can also include your core values if they influence how your business operates. Values such as sustainability, quality, or inclusivity can clarify your positioning and help set expectations internally and externally. However, while showing that your business has values can make it appear better guided, avoid common cliches or mentioning ones that you don’t intend on implementing.
Add Depth Without Padding
Aim for one or two pages, unless your business has an unusually complex structure. Use this space to establish facts, not to speculate about growth or future opportunities. That information is typically found in the marketing strategy.
If you need help formatting, a business description sample can be a helpful starting point. Just be sure to write your own content, as copied templates often feel impersonal or vague.
Examples by Type of Business
Different business types call for slightly different approaches when writing the description. The structure remains the same, but the focus shifts depending on your industry, customers, and delivery model. Here are a few examples to guide you:
- Consulting Firm: Describe your area of expertise, the type of clients you serve, and how you deliver services.
- Product Business: Outline your product category, method of production or sourcing, and customer type, such as wholesalers or online buyers.
- Tech Startup: Focus on your problem-solution fit, your delivery method (software, app, platform), and your user base.
- Local Service Provider: Clarify your service range, territory, and any licences or qualifications that apply.
Avoid These Common Mistakes
Even well-prepared plans for businesses can lose their impact if the description section is poorly handled. Avoiding common missteps will help your enterprise appear more credible and organised from the outset.
- Writing before you finalise your business model: Your business description should reflect reality, so if you’re still refining your structure, wait until it’s clear.
- Using generic phrases: Phrases like innovative company or leading brand are meaningless unless thoroughly backed up with data.
- Skipping ownership details: Funders and partners want to know who’s in control, so include this information early on in this chapter.
- Ignoring structure: A messy or disorganised section suggests disorganised thinking, so use headings and a consistent paragraph layout.
- Overpromising: Save projections and ambitious claims for later in the plan, such as in the financial summary, leaving this section for grounded and factual information.
Where Does the Business Description Belong in Your Plan?
Your business description usually follows the executive summary and before the market research section. If you’re creating a short-form plan, it may be combined with your mission and structure. In longer plans, it deserves its own clearly labelled section.
Once you have this section in place, you can move confidently into describing your product or market in more detail.
Final Thoughts
Your business description serves as a structural introduction to everything else in your plan. It shows you’ve thought through who you are, what you do, and where you fit within the local or global economy. If it’s vague, exaggerated, or disorganised, your credibility drops.
Keep it sharp, useful, and tailored to your audience, especially if you’re writing for banks, grant agencies, or local enterprise offices. When done well, it anchors your plan and gives everything that follows a clear point of reference.
FAQs
A well-structured section should outline your company’s name, legal structure, location, ownership, mission, and the products or services you provide. This chapter introduces the reader to your business and sets the foundation for the rest of your plan.
Your company overview doesn’t need to be lengthy, so it should fit in one or two focused pages. This keeps readers engaged and ensures the section flows neatly into later parts of your business plan without unnecessary repetition.
While not required, adding core values can strengthen your business positioning. Shared principles, such as quality, sustainability, or inclusivity, help readers understand how your company operates and what drives decisions across the team and leadership.
A sample of a business description can help you understand structure and tone, but you should avoid copying one directly. Instead, adapt it to reflect your specific business, industry, and operational setup. Generic templates often fail to show what’s unique or credible about your idea.
This section comes immediately after your executive summary. It provides important details about your structure and operations before you move on to discussing your market, competitors, or strategy.