The section of the business plan dealing with the company’s mission affords executives the opportunity to assess and articulate the overall driving force in the business. Invariably, the questions that must be answered in writing this section are difficult ones, but they provide important perspective for everyone involved.
This is really an assessment of the company’s overall approach to producing and selling its products or services, along with its goals for maximizing success. In order to grow, a company must have a distinctive value proposition (or “valuable formula”) for products or services that clearly meet customer needs better than the competition. Strategy can be expressed in terms of guiding principles or philosophy. The descriptive terms used are not nearly as important as the thought process and the considerations behind the ideas expressed. The strategy is the basis on which company activities - marketing, production, sales, and other functions - are
organized and assessed.
The Company: Past, Present , And Future
It is important for anyone assessing a business to understand its history and current status in order to project what lies ahead. The section of the business plan on the company, then, should provide a synopsis of the company’s past, present, and future. The section can be divided into
three parts:
History When was the company founded? Why was it founded? What have been its chief accomplishments? How has its direction changed? Equally important, what are the company’s failures and shortcomings? This last question is a subject executives usually prefer to avoid. While the business plan need not dwell on failures, it should acknowledge them, in the interests of balanced reporting, to give the business plan credibility. After all, every enterprise has its disappointments.
three parts:
History When was the company founded? Why was it founded? What have been its chief accomplishments? How has its direction changed? Equally important, what are the company’s failures and shortcomings? This last question is a subject executives usually prefer to avoid. While the business plan need not dwell on failures, it should acknowledge them, in the interests of balanced reporting, to give the business plan credibility. After all, every enterprise has its disappointments.
Current Status This section should summarize the company’s existing situation. What are its existing product lines? How many employees does the company have? Where does it stand in its industry and marketplace? Have there been any sales? Are sales on an upswing, level, or in a decline? Readers should have a sense of the company’s overall situation and direction as demonstrated over the previous few months.
Future This, of course, is the most difficult section to write, but it should provide a sense of where the company is headed. That is, what are its objectives and goals? Briefly, what does it plan for new markets and products?
Most important in writing about the company’s future is that it makes sense in terms of the history and current status. A company that projects sales increases of 20 percent annually for the coming three years does not make a very convincing case if, during the previous 10-year history, sales have never gone up more than 10 percent in a particular year.
The Management Team
The first question venture capitalists or private equity investors tend to ask when learning about a company seeking investment funds is often, “Who are the people?” The experience, talent, and integrity of the founders and the management team are of primary concern to a professional investor. In this section you should provide a quick summary, which will lead to a more detailed description in the next section.
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