Table of Contents
A business description is a brief summary that explains what a company does, who its customers are, and what its key point of differentiation is. What is a description of a business needed for? It’s typically used at the beginning of a business plan, on a business’s website and social media, and on applications for financing. Knowing how to write a clear, concise business description can be a powerful asset for entrepreneurs.
Key Points
• A business description summarizes what a company does, who it serves, and its key point of differentiation.
• Core components of a business description include basic operational and legal details, brand identity and direction, and market presence.
• Business descriptions should remain concise, ideally consisting of a short, fact-filled paragraph.
• Writing in an active voice without complex jargon helps ensure clarity and energy.
• Tailoring content to specific audiences can help effectively engage prospective investors, partners, or customers.
Understanding Business Descriptions
A business description is a brief summary of what a company does, how it will serve its customers, and what makes it unique. It’s typically a crucial part of a business plan, providing a summary that sets up the business clearly and concisely before moving on to an in-depth business plan.
The business description usually follows the first section of a business plan, or the executive summary.
Recommended: How Do You Structure a 3-Year Business Plan?
Key Elements of a Business Description
As you consider crafting a business description, it’s good to acquaint yourself with the standard elements. Information about the business is typically conveyed via three components, detailed in the chart below.
Having a top-notch business description as part of a business plan can be a main element when you’re seeking a small business loan, investors, and partnerships.
| Business Description Components | Key Elements to Include |
|---|---|
| Basic Operational and Legal Information |
• Business name: the official nomenclature • Location: current or planned address, whether there are additional branches • Business structure (LLC, partnership, or corporation, for instance) • Ownership/management: who comprises the leadership team and their accomplishments |
| Brand Identity and Direction |
• Mission and vision: the goal of the business; how its products/services will fill a gap in the marketplace • Unique selling proposition: how the product/service is positioned for differentiation • History: a snapshot of the business’s origins, its growth, and the current size of the enterprise |
| Market Presence |
• Product/service: overview of what’s offered, and what makes it distinctive and desirable • Target market: the groups of consumers served by the product/service • Distribution: where the product/service is available; how it’s currently marketed • Company strengths: how your business stands out from others in the same category • Growth strategy: trajectory to scale the business and how it will be accomplished |
Recommended: 10 Steps for Starting a Small Business
How To Write a Business Description
Now that you know the components, learn how to write a business description. While it may sound like a lot of information, a business description can capture this intel in a concise way and tailor it to your particular audience. This description can be an important part of writing an effective business plan, appearing directly after the first element (the executive summary) of that document.
A well-crafted business plan can be a valuable tool when meeting with investors, seeking a startup business loan, or pursuing partnerships.
Keep It Concise
Your goal is to keep your business description short and to the point. Those reading this information need to be able to scan it quickly and understand the facts about your business, what makes it unique, and why it’s a winning idea. To put it another way, think of the business description as your elevator pitch or the capsule summary you’d share if you were a contestant on “Shark Tank.” Your business plan can then convey more detail.
Edit the description to be detail-packed but brief. A good length to aim for is a few sentences, comprising a short paragraph. To start, you could use phrasing such as, “Since April of 2025, Company ABC, an LLC in San Anselmo, CA, has operated the area’s only vegan bagel shop, serving the community’s young families who eat clean, and it now seeks to expand into neighboring suburbs.” The text doesn’t need much description or detail; just the salient facts.
Use the Active Voice
Using an active vs. passive voice can help give your business description a sense of clarity and energy. For example, you might say, “The business delivers 24/7 plumbing services to typically underserved rural areas” instead of “24/7 plumbing services are provided to typically underserved rural areas.” It’s a small change, but it can enhance the description of a business.
Avoid Over-Complicating
In addition to keeping your business description short and in the active voice, make it simple. Don’t use too much business jargon or include streams of complex information. For instance, if you’re marketing an organic wine, you can say it’s certified organic, without listing all the credentials that prove it’s organic.
That kind of in-depth information can be shared elsewhere in your business plan and/or history. Think of this as a topline that can be easily understood and digested.
Tailor It to Your Audience
Another important aspect of writing a strong business description is to customize it for the audience you are targeting. It can be smart to angle it so that it addresses their viewpoint. For instance:
• If you’re pitching investors, you may want to briefly highlight your revenue model or profit margins.
• If you’re sharing information with potential partners, consider underscoring common values and mutual growth opportunities.
• If you’re creating a business description to use, say, in research with consumers, you might want to emphasize the uniqueness of your proposition and what needs it satisfies.
• If you’re launching, gaining consensus, or repositioning, a business description could reinforce for your team how you have set business goals and objectives.
Now that you know what a business description is, what it should contain, and how to craft one well, you’re ready to get writing. This document can be a critical part of your business plan and play a role in creating a marketing plan as well.
Recommended: How to Write a 5-Year Business Plan
The Takeaway
A description of a business can be a short paragraph that quickly communicates an enterprise’s operational and legal details, the brand identity and vision, and its market presence. Writing a good business description depends upon communicating key points in a clear and concise way that’s tailored to your audience. It’s often a fundamental component of your business plan as you seek financing to launch and/or grow a company.
Ready to grow your business? SoFi Small Business Loans can give you fast access to the capital you need. Check your eligibility in minutes.
FAQ
Where does the business description go in a business plan?
Usually, the business description follows the executive summary (the first section in a business plan), but precedes more detailed information about the company and its products or services.
How long should a business description be?
A business description should be a few sentences long, meaning a short paragraph. The goal is to communicate important facts in a clear and concise format.
What’s the difference between a business description and an executive summary?
A description of a business differs from an executive summary. A business description provides a topline of crucial information about what a company does, its structure, and its goals. An executive summary is typically a distillation of an entire business plan.
Do you need a business description if you’re not seeking funding?
You don’t necessarily need a business description if you’re not seeking funding, but it can be a valuable tool. Crafting and referring to a business description can provide clarity to team members and enhance focus. A business description can also be helpful if you’re doing consumer research about your enterprise or if you’re aligning with, for example, a logo designer or other professionals working on your brand identity.
Can a business description change over time?
Yes, it’s common for business descriptions to change over time along with a company. The description can evolve as you introduce new products and/or services, focus on new customers, and rebrand or reposition your enterprise.
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