6.1 Business description

The business description is the section of a business plan that introduces the business: what it is, what it sells, where it operates, who owns it, its legal form, its vision, mission and objectives, and what makes it different from competitors. It gives readers such as banks, investors, partners and county officials a clear picture of the business before they read the detailed marketing, management, operations and financial plans. A strong description is short, specific and convincing, showing that the entrepreneur understands the business and its opportunity. Example: a young entrepreneur seeking a loan from a youth fund describes her business as a mobile car-wash service in a busy town, registered as a sole proprietorship, using water-saving equipment to wash cars at customers' homes and offices, with a goal of serving 300 regular customers within two years.

Contents of a business description

Vision and mission statements

• Vision statement: Describes the future position the business wants to reach, usually in one inspiring sentence.
• Mission statement: Explains why the business exists, what it offers, for whom and how.
• Brevity: Both should be short enough to remember and repeat.
• Realism: They should be ambitious but believable for the business size.
• Customer focus: They should show how the business serves its customers.

Business objectives

Objectives are specific targets that move the business towards its vision, and they should be SMART: specific, measurable, achievable, realistic and time-bound. Common objectives cover sales, number of customers, profit, market share, expansion and quality. A good objective reads like "increase monthly sales from Ksh 150,000 to Ksh 200,000 by the end of the first year", rather than "grow the business".

Description of products and services

• What the product or service is: A clear description of each item offered.
• Features: The main characteristics, such as size, quality, materials or packaging.
• Benefits: How the product meets customers' needs or solves their problems.
• Price range: The general price level of the products.
• Future products: Plans to add new products or services later.

Characteristics of a good business description

• Clear: Uses simple language a non-expert can understand.
• Concise: Usually one to two pages long.
• Specific: Gives facts, names and figures instead of general statements.
• Consistent: Matches the details in the rest of the business plan.
• Persuasive: Shows the opportunity and why the business will succeed.

Steps for writing a business description

1. Gather business details: Collect the name, registration, location and ownership information.
2. Define the products or services: List what the business offers and their benefits.
3. Write the vision and mission: Draft short statements of purpose and future direction.
4. Set the objectives: Write SMART objectives for the first one to three years.
5. Identify the unique selling proposition: State what makes the business different.
6. Describe the industry briefly: Explain the sector and the opportunity the business targets.
7. Draft the section: Combine the information in a logical order.
8. Review and edit: Check for clarity, accuracy and consistency with the rest of the plan.

Worked example: setting a sales objective

Target monthly sales = current monthly sales × (1 + growth rate ÷ 100)

A tailoring business currently sells Ksh 150,000 per month and sets an objective to grow sales by 20% within one year.

Target monthly sales = 150,000 × (1 + 20 ÷ 100)

Target monthly sales = 150,000 × 1.2

Target monthly sales = Ksh 180,000 by the end of the year