Unveiling the Importance of Business Plan History and Background: A Sample for Entrepreneurs
As an entrepreneur, you’ve probably already heard that a well-crafted business plan is critical for the success of your venture. However, have you ever thought about the importance of including a history and background section in your business plan? In this article, we’ll explore the reasons why this section is crucial, and provide a sample for entrepreneurs looking to craft their own.
Why Include a History and Background Section?
The history and background section of a business plan serves several crucial purposes. Firstly, it gives potential investors and stakeholders a comprehensive understanding of your business’s roots and how it developed over time. By detailing its history, you create a narrative that links your past to your future and defines your identity.
Secondly, the history and background section helps you identify any challenges and opportunities that your business has encountered over the years. This way, you can use the information to craft strategies that address any issues that may arise in the future. Finally, the section proves that you have done your research and understand the industry by providing data and relevant information.
What Should You Include in a History and Background Section?
It’s essential to know what to include in a history and background section to make it informative and relevant. Start with an overview of your business, including its legal structure, ownership, and location. Then, go into more detail about how it evolved over the years. Be sure to mention any significant milestones, such as when it was founded, when you first started making a profit, or when you landed your first significant client.
It’s also essential to discuss the challenges you faced along the way, whether it was competition, economic downturns, or staffing issues. Be upfront about any mistakes you made and how you overcame them. This information highlights that you are willing to learn from your mistakes and how you can create successful solutions.
Finally, provide relevant industry data and information about your primary customers. You can mention any notable partnerships or collaborations you have had and the impact they have had on your business.
Sample History and Background Section
Here is a sample history and background section:
XYZ Company was founded in 2015 by Jane Smith and John Doe, two friends who had previously worked together at other firms. They came together to create a logistics company that would find creative solutions to help businesses transport goods efficiently.
In the first year, XYZ contracted with several small businesses in the region and built up a small press of loyal customers. In 2016, they opened their first warehouse to support new growth opportunities. By the end of the year, they had added more customers, hired additional staff, and were close to breaking even.
In 2017, XYZ’s growth accelerated. They secured a partnership with a large online retailer that helped them to expand rapidly throughout a significant geographic region. They opened two new warehouses and started offering new logistics services such as temperature-controlled storage for perishable goods.
While the growth was initially invigorating, it soon proved challenging to manage, and the additional overhead threatened to sink the company. But the team at XYZ reacted quickly, downsizing unprofitable divisions, renovating facilities, and tightening up logistics to drive efficiencies. They even considered a possible merger with another firm, as well as selling equity, but ultimately negotiated easier payment terms with their suppliers instead.
Today, XYZ is an industry leader that generates $50m a year in revenue. They work with businesses of all sizes, from startups to Fortune 500 companies. Their services not only include traditional warehousing and logistics but also specialize in controlled climate transportation. XYZ is well-established in the industry, with a well-known network of trusted partners.
The Takeaway
A history and background section is critical in a business plan as it helps to create a story that links your past to your future. By detailing the critical milestones and challenges your business has overcome, you provide an insight into the strength of its overall operations. The section also provides investors and stakeholders with hard data that they can trust and depend on. By doing this, you demonstrate that you understand your industry and can anticipate trends and potential challenges. Keep these tips in mind as you draft your business plan for success.
