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Sum Up Your Business

Sum Up Your Business

“What does your company do?” As a business owner, you’ve probably been asked that question hundreds or even thousands of times. But don’t take it lightly: It’s critical, when seeking a government contract—or any contract, for that matter—to be able to define your company clearly and accurately. In fact, it’s worthwhile to spend some of your valuable time developing a powerful, concise description of your firm.

Think of your business summary as equal parts business plan and elevator sales pitch. It provides inquirers with a quick blueprint of your company, by describing what your business does and how it does it in an engaging and easy-to-understand way. And if you’re new to seeking government contracts, a sharp, to-the-point business plan or description can create the context in which your bid will be taken seriously and viewed as comparable to more experienced contractors.

A good business summary tells prospective customers why they should consider giving you their business, and offers potential investors the information they need to determine whether to contemplate funding your company. “If you don’t position your company clearly, it makes it much more difficult for everyone from customers to partners to investors to stand behind you,” says Sramana Mitra, a Silicon Valley–based strategy consultant and author of Positioning: How to Test, Validate, and Bring Your Idea to Market.

Beyond offering information to outsiders, a good business summary can be a useful tool to keep both you and your employees on track. “If you can explain to your entire organization what your business is all about, it helps motivate people and keeps them focused,” says Mitra. It can also help keep you focused, and give you a clear set of goals towards which to work.

Properly defining your business doesn’t have to be difficult. Mitra says answering the following three questions can help you gain a much better understanding of what your company does—and how to communicate it.

What’s the problem? Whether your company makes backpacks or provides janitorial services, it targets a particular problem. Start your business summary with a clear description of the problem you address for your customers.

What’s the solution? Mitra says you must be able to clearly explain your company’s value proposition—what customers receive in exchange for their money. In short, how does the product or service solve the customer’s problem? As anyone who’s gone for a government contract knows, part of that equation is cost: Is your solution cost-effective? Mitra recommends that business owners hone their value proposition by presenting it to a string of prospective or existing customers. “Ask them if they’d buy your value proposition, and listen to what they say,” she says. “That process will always indicate how to best position and explain your products and services.”

Who is your customer? Define the market segment your company’s product or service targets. Determining your market will help you hone your marketing pitch, and suggests to investors the size of the potential market for your company’s products or services.

Clearly defining your business can help you attract potential investors as well as add to your existing customer base. Best of all, it can help you refine your idea of exactly what it is your company does, helping you better position your company for success. “Business is all about selling, about monetizing whatever you have to offer,” says Mitra. “To sell effectively, you have to position your company the right way.”

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