The Tool Desk
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What belongs in a company background?
The U.S. Small Business Administration (SBA) recommends using the company description to provide detailed information about the business, including the problem it solves, the customers it serves, and its competitive advantages. In practice, make the section specific enough that a reader can picture the company and understand its purpose.
- Identity and purpose: Give the business name, business type, operating location or geography, and a plain-language statement of its purpose. The SBA also identifies the company’s product or service, leadership, employees, and location as basic company facts.
- Offer and intended customer: Say what the business sells or provides and identify the people or organizations it is meant to serve. Replace vague claims such as “we serve everyone” with a concrete customer group.
- Customer need: Explain the problem or need the business addresses. Keep the explanation tied to what the company actually offers.
- History or current stage: Summarize relevant origins and milestones for an existing business, or the founding rationale and development stage for a startup.
- Specific strengths: Name relevant expertise, a useful location, operating assets, intellectual property, or a demonstrated customer advantage—and explain why it matters to the intended customer.
These elements follow the SBA’s business-planning guidance. There is no need to include every detail about the company here; the goal is to orient the reader to the rest of the plan.
How to draft the section
- Write a one-sentence identity statement. Use this as a drafting aid: “[Company] is a [type of business] serving [customer group] in [geography] with [offer].” It is a practical sentence pattern, not official SBA wording.
- Explain the need and your fit. Add two or three sentences describing the customer problem and how the company’s offer and strengths address it.
- State the company’s history or stage. Include only relevant milestones or operating context; distinguish completed results from future plans.
- Verify factual claims. Check dates, revenue, customer counts, credentials, and claims of competitive advantage against records or other evidence.
- Keep the section proportionate. Give the reader enough context to understand the business, without repeating material that belongs elsewhere in the plan.
What should a startup include?
A startup with little or no operating history should say so plainly. Focus on the business concept, its founding purpose, its current development stage, relevant founder expertise, and milestones already completed. Do not present forecasts as past performance or imply that sales, customers, or operating results exist when they do not.
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What should an existing business include?
An operating company can briefly explain its origins, relevant ownership changes, current footprint, and key milestones. Oklahoma’s business plan template for existing businesses suggests that length of operation, past ownership, sales and profit history, employee count, and community reputation may be relevant. Choose details that help establish the company’s background; do not add every available figure automatically.
How is the background different from the other plan sections?
The SBA’s business plan outline separates the company description from other subjects, so each section can answer a different reader question:
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- Company background or description: What is the business, whom does it serve, what need does it meet, and what is its history or stage?
- Market analysis: What do industry conditions, target-market evidence, competitors, and trends show?
- Organization and management: What is the legal structure, who leads the business, and what are people’s responsibilities and qualifications?
- Product or service line: What exactly is sold, what customer benefit does it provide, and what are its lifecycle, intellectual-property, or research and development considerations?
The SBA says there is no single required business-plan outline. Use sections suited to the company and the plan’s purpose, while keeping the background focused on company context.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Where can you get a business-plan starting point?
The SBA’s planning guidance is a free starting point. If you want a guided way to draft a full plan, LivePlan offers writing guidance and a sample-plan library through its help resources. It is optional; you do not need specialized software to write a clear company background.
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