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Your Business Profile—An Important Tool

This topic is designed to give you insight into creating a profile for your business. Your profile is more than a marketing piece. It’s actually a brief, overall description of your business. It’s often one of the first sections of a complete business plan.

A business profile is designed to give any interested party an introduction to your business. It helps the reader gain a working knowledge of your business and provides a clear idea of your business position at this time. Coupled with an ‘Executive Summary,’ it becomes even more important because it can be used to educate new team members and support advisors like bankers, accountants, legal firms, potential buyers, and any others who may have an interest in your business.

Developing your business profile can help you establish a clear direction for your business and pinpoint your strengths, weaknesses, opportunities, and threats. It also gives you an opportunity to review your history and business as a whole.

This information will show you what to include in your business profile and how to use it to your advantage. First, let’s review the major objectives of developing your business profile.

4 key objectives to help you develop your business

1.         To know and understand the business you’ve developed.

As a business grows, it can often diversify and change tack before the owner’s very eyes. Over time, you can actually find yourself in a sometimes different business than the one you began. As such, it’s important to review your business—what you offer now compared to earlier—and look at changes in your industry as well. It gives you an opportunity to review your overall business.

2.         To describe the history and achievements of your business.

Once again, the amount of work and results achieved can be astounding as a business grows. It’s important to reflect on these achievements and give yourself and your team members a pat on the back for a job well done. Many business owners find this section very surprising indeed, not realizing just how much they’ve done.

3.         To assess the strengths, weaknesses, opportunities, and threats.

Going through this process is like taking the pulse of the business. It helps clearly define what you need to focus on for the success of the business and how to make the most of the positives. It can be likened to taking a photograph of the business as it stands today.

4.         To set your business objectives and goals.

This is probably one of the most important aspects of a customer profile. Clearly, having objectives makes it that much easier to achieve them! That is, when asked, many business owners will tell you they don’t know for sure what they want from their businesses. Many lack clarity of direction and have only a hazy picture of what they want their business to be like in, say 2 years’ time. This is frustrating for business owners or managers, as many would like to be able to take the time to clarify that picture, but most simply don’t have the time. Developing your business profile means you get that opportunity. 

Once developed, these objectives become easier to achieve. From here, it becomes a matter of not what to do, but rather how to do it. Your focus will move to results-generating activities for sourcing, moving, or developing the resources, skills, and materials you need to put in place to make it happen and achieve your objectives.

And finally, a possible fifth objective.

If you’re completing this profile in the context of a business plan, you can add another objective—to understand the purpose and objectives after completing your business plan.

This is an important point. With any such evolving process, it’s important to be aware of the results you’d like. For instance, some 500 business owners who were about to go through the business-planning process were asked to list their top 6 personal reasons for wanting to complete a business plan. 

Some wanted to increase their turnover or profits. Some wanted to gain a clearer direction for the future. Others wanted more free time, less stress, more employees; or they needed to raise funds for the business. Interestingly, after the fact, 100% of these business owners said that the business plan was effective in achieving their personal goals for completing a plan.

Further, if the plan will be used to raise funds for the business, rather than just business development, it will need to be changed slightly. So it’s crucial to know this purpose up front.

Your business profile

So let’s review the more detailed aspects of your business profile now. This can be broken into 5 sections.

Your business description

This section should give a general description of your products and services, the benefits your customers receive, your target markets, and customer types.

It should explain all your products and services—what you do. It should also describe the people you deal with and want to attract—who is most interested in your products and services. And how you do what you do to help those people—what benefits your business offers.

Ideally, it should also include a description of the legal structure of the business and the background of the business itself; that is, how and why it was established. A description of the background and experience of the key operators and team members within the business is also crucial here.

Further, this section should outline the major achievements to date of your business. This shows the reader the realized potential within the business.

Business mission statement

A mission statement explains the purpose of your business—what it is here to achieve and, often, how it’s going to achieve it.

It’s an innovative and motivating statement that is simple and precise. It will identify why you’re in business in the first place and why customers buy from you. It must be a statement of more than just the profits you’d like to achieve.

This one statement alone can give you a sense of great clarity, purpose, and direction. It can be used as either an external tool—one to include in promotions and share with potential and existing customers— or as an internal tool. In the latter case, the statement is used more as a reminder for you and all team members about what you are here to do. 

It can be a very powerful tool. You must develop one for your business if you haven’t done so already.

Situation analysis

This item is very closely tied with the next (S.W.O.T. analysis). You see, a situational analysis identifies those factors outside your business that could influence current and future performance. It also identifies factors internal to your business that could do the same.

Analysis of your internal factors (you’ll discover your strengths and weaknesses later) might cover issues such as pricing policies, meeting customer needs and wants, sales level compared to capacity, market share, profit performance, marketing plan and budget, staff expertise, training, utilizing team members, motivation, using external advisors, adequacy of premises, financial resources, and much more.

Analysis of external factors (opportunities and threats) might cover other issues, such as the economic condition of the country, current interest rates, disposable income, your competitors’ activities, technological innovations, social patterns and changes that could affect your business, environmental and legal considerations, and others.

S.W.O.T analysis

The S.W.O.T analysis is a detailed extension of the situation analysis. It identifies your major strengths, weaknesses, opportunities, and threats. Your strengths and weaknesses are internal to your business, and your opportunities and threats are external to your business—the same factors mentioned above.

Completing a S.W.O.T analysis is designed to review these points in detail and then take it one step further—creating strategies and coming up with ideas to address these areas. 

For example, creating strategies to build on your strengths and maximize your opportunities. Or doing the same to correct weaknesses that could be barriers to your success or others to minimize the effects of threats to your business.

Doing a S.W.O.T analysis is like taking a snapshot of your business at a particular moment in time. By implementing the ideas that come from this type of analysis, you’ll change your business again, hence the need to repeat this process every 12 weeks or so. That way, you’ll be constantly checking and improving the condition of your business. 

This section would usually focus on the 3 biggest issues in each of these 4 areas at the time.

Business objectives

This section allows you to set clear objectives for your business that are:

·         Realistic

·         Achievable

·         Consistent with your business purpose and mission

·         Measurable

·         Set to a particular time frame

In short, these objectives have to be finite. They cannot be ‘I want to be rich and happy.’ They must be clearly defined goals for your business. In that context, they must state ‘how rich and how happy’! 

To make this easier for you, you can break down these objectives or goals into different areas for your business. 

For example, you could break it down to sales objectives, addressing the volume of sales desired on what products and services. Next, technological objectives, that is, the equipment required to make sure the business is up to or ahead of industry standard. From there, staffing objectives—how many people you need and want to fulfill those sales objectives. Financial objectives—from those sales, how much profit you want to achieve, what level of debt you want the business to carry, the value of debtors, and other issues. And other objectives, for example, quality-of-life issues such as your hours and involvement within the business, or the future sale or succession of the business.

Reaching agreement on these objectives means your business will have a clarity of direction most don’t. You’ll then be able to concentrate and set about achieving these directions.

This section also shows the reader the potential within the business.

And finally, if you’re completing this within the context of a business plan, it’s important to include a statement outlining the purpose of the business plan, such as to raise finances, use as a business development, or both. It’s also important here to look at what you want the business-planning process and implementation of that plan to achieve for you and your business personally.

From this outline, it’s easy to see that by completing a business profile for your business, you’d not only have a tool to share your vision and experience with others, but you’d also have completed a process of reflection about your business and its future. An opportunity for reflection rarely enjoyed by most business owners and managers, who are just too busy worrying and working frantically on a day-to-day basis. 

Your Action Plan: Create a business profile for your business