Given the fact that a business plan is the most powerful weapon you have in your arsenal to convince investors to capitalize on your idea, it will only be justified to think of an impressive business plan as a preamble to success. Once an exciting executive summary is in place, the next step in the development of the business plan is the company’s history.
While one may find it hard to believe, the company’s background is a vital prerequisite to secure the desired capital as it helps communicate where you currently stand and where you plan to see your company in the future. Given the significance, the following account elucidates the crucial role a well-compiled company background plays in igniting an interest among investors for your business plan.
Following the executive summary is the section where the actual details begin. This is the section of the background and while the executive summary is inevitable for a long lasting impression on the concerned party, the significance of company’s background cannot be understated.
The company’s background effectively addresses the history of your company stating information about the people who are directly involved with the management and operation of your business. The information outlined in this section vastly depends on how long the business has been around. A start-up business will have significantly less historical information as compared to one that has been running for years.
This section of the business plan is important because investors are interested to know who is behind the business, what initiated the idea and the history the company has in the market place. Ideally, this section tells the story of your company and outlines the business concept. The company background should explain how you have reached this point and where you intend to see yourself in the future.
The information featured in the company background section highlights facts such as how the company got started and where the idea for the initiation of the business came from in the first place. Investors will also appreciate relevant information about the key players associated with the business such as their educational background, their areas of expertise, their association with industry-related clubs or organizations and so on.
The company’s background should also emphasize areas where the company plans on accomplishing developments in near future. This is going to vary from one company to the other as a start-up may not have any activities to list in contrast to an established business that has been in operation for some time.
The company’s background can be effectively divided into two sub-sections, one featuring the overall description of the business and the other highlighting the products or services. Information that should be a part of the first section has already been stated above but it should also include details about the targeted market or the demographic the business plans to serve. Any milestones the business has achieved should also be mentioned and this section should talk about what gives the business its competitive advantage and the way it plans to make profits. It is critically important that you keep the tone upbeat and positive.
The second section of the company background that is the description of products or services is of grave significance and it comes as a surprise that this is where most of the entrepreneurs fail, being unable to come up with concise or succinct answers. The idea is to make readers understand what you are selling and to keep them involved.
Despite putting together an attention-grabbing executive summary, it is really sad how investors dismiss business plans just because entrepreneurs fall short of communicating the business they are actually in. A good place to start is to make use of a business case that clearly defines what the business is really all about. Furthermore, you should also discuss the value that your company and its products will bring to the market.
Having said all, one should remember that the company’s background should allow investors to get a clear picture about your business and the strategies that will be incorporated to bring about the desired success. While one may think that a company’s background is an inconsequential section of the business plan, this seemingly insignificant part of the document can vastly influence an investor’s decision about investing on your project. Just make sure this section of the business plan is descriptive yet succinct and you are all set to go.