CHAPTER 7
Plan Section 2: Company Background and Description Learning without thought is labor lost. Thought without learning is perilous. – CONFUCIUS
sets the stage so that the reader can gain insight into the background and operation of your company. This section gives context to the mission and vision presented in the Introduction (see Chapter 6), allowing the reader to understand more thoroughly the industry or trade sector of your company and how your company fits into it. Section 2 should provide a comprehensive description of the company, including such things as:
THE FIRST SUBSTANTIVE SECTION OF THE BUSINESS PLAN
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The historical development of the company The current and projected business activities of the company The products offered by the company The industry segments and markets in which the company is involved Major customers, competitors, alliances and company management may also be referred to in this section, although these topics will generally be covered in much greater detail later in the business plan.
Historical Development of the Company Generalizations are difficult to make with regard to the contents of the business plan section that describes the development of the company. At a minimum, however, it is useful to explain how the company was originally formed. For example, in a number of cases involving companies active in the high technology area, the business began when the founders left their previous employers to develop a new technical or product concept that did not fit into the strategic plans of the former employers. Beyond formation, other milestones that might be mentioned, as appropriate, include the following: ■ ■ ■ ■ ■ ■ ■
Receipt of initial financing from investors Recruitment of experienced management personnel Expansion of human resource capabilities in research, manufacturing, sales and finance Product testing and initial sales of goods and services Formalization of supply and distribution arrangements Additional rounds of financing Sales milestones
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