The purpose of the business description is to help the reader understand the demographics of your company, the current status of your business and the future direction of your companyThe purpose of the business description is to help the reader understand the demographics of your company, the current status of your business and the future direction of your company

Points to cover are:

1. Company History

History of the company and its development, or information about how your idea developed.

2. Company Industry

A discussion of the company’s industry.

3. Legal Structure

Details of the legal structure.

4. Employment

Number of employees and their age distribution. Briefly discuss employees qualifications to do the work based on training, education and/or experience.

5. Mission/Vision Statement

The mission statement of the business. Key elements of a mission statement include markets and geographic areas to be served, philosophy and values of the company and current and future products and/or services to be provided.

Discussion about where the company is today (current status) and where it wants to be (company goals). State goals quantitatively. Analyze your company in terms of strengths, weaknesses, opportunities, and threats (SWOT).

7. Company Products or Services

Description of the company’s products or services.

Business Description Sample

Company History
Members of the cooperative are independent cattle producers and a custom meat processor, Larry and Linda’s Locker Plant. It was organized when the custom meat processor was asked to process cattle for a consumer group in a city in the Midwest. The consumer group made agreements with individual farmers to purchase cattle that were raised in pastures as opposed to a confinement facility. Further, the consumer group insisted that use of antibiotics be restricted. The consumers believed that cattle raised in that manner would provide a safer, more flavorful product.

Demand for contract grown beef raised in the manner prescribed was steadily increasing – so much so that the processor would soon have to build new facilities or give up the business to competitors. Located on the main street of Bordertown, IA, a town of 1,200 population, the processor would have to build new facilities outside the community. At this stage of his life, he was reluctant to do so because of the amount of money he would have to borrow. In addition, he would be highly dependent upon a single group of consumers.

After watching Public TV’s weekly program, “Market to Market,” the custom meat processor learned of efforts of independent organic vegetable growers who formed a producers cooperative that enabled them to pool their limited resources to grow and market their products. He learned that there was a segment of consumers that would be willing to pay a premium for organically grown vegetable products that were identified as to where and how they were grown. This was similar to his own observations with the consumer group for whom he processed organically grown cattle.

It occurred to him that the producers for the buyers’ group and he had a common interest and common concerns. If they banded together in a producer cooperative to raise and process high quality meat products, they could command a premium for their products. In controlling the product from the farm to the consumer, they could increase their income in two ways: 1) secure a higher percentage of the consumer dollar for themselves; and 2) obtain a higher price because of the premium consumers are willing to pay for their specially grown products. Also, since consumer prices for beef products fluctuate much less widely than commodity prices, the participating independent cattle producers would be more assured of year-to-year income stability.

Finally, he would feel much more secure by sharing the investment risk with others. In addition, having an adequate supply of cattle would allow the cooperative to target several consumer markets in various geographic locations so as not to be dependent upon a single segment in one geographic area.

In a series of discussions and meetings with independent beef producers in the area he found sufficient interest to build a facility of adequate size to process all the cattle they were able to raise. Throughout the process, industry experts and others that had organized similar cooperatives emphasized that the cattle raisers had to be proactively involved in all phases of the operation. In other words, raising and processing cattle for a highly specific group of consumers is a marketing system, not a processing system. Processing is but one step in that system. Larry and Linda’s has operated for more than 20 years. The plant is federally inspected. Larry and Linda’s does not process any deer meat for hunters and it specializes primarily in processing of beef. Beef processing accounts for 80 percent of business, while 20 percent is devoted to hogs and other animals such as buffalo.

Cattle Producers Marketing Coop was established in 1995 on the basis of offering the highest quality and value in its free-range beef farrowed and raised by the farmers of the greater Midlands area. Time-honored traditions have been passed down through the generations of producers who understand quality and purity of product. Concerned consumers were looking for food and fiber products that were produced with minimum chemical inputs and that could be identified with the face of the producer. These consumers were shopping. They wanted goods produced from real family farms.

Marketing Coop answered the call – first with quality beef products, then adding other free-range meat products followed by pies and home baked breads. Constantly striving to supply what the concerned consumer is asking for, the group continually reviews what is available in the marketplace and what it sees other similar groups doing successfully in areas that are distant from the Midlands trade area. Improving on what is available and providing new products to the areas of need will assure our success in a market driven by consumer demand.

Marketing Coop has been hindered only by the lack of formal organization and working capital. Sales have grown steadily since the group first began attending area farmers markets together as a loosely knit group working under the banner of Golden Meadow Products. At this point, to move Cattle Producers Marketing Coop into a position to take full advantage of available niche markets, additional capital is needed to purchase and upgrade a facility, hire staff with marketing expertise and move larger volumes into the marketplace.

• See enclosed copy of letter of proposal from Larry and Linda’s Locker Plant.
  

Past Performance
As a newly formed value-added cooperative, Cattle Producers Marketing Coop does not have a past performance record beyond the collective history of its
owner/members who previously operated together on an informal basis as Golden Meadow Products.

1990	1991	1992	1993	1994	1995	1996	1997	1998	1999
$4,000	$5,500	$4,500	$5,350	$7,000	$10,050	$24,500	$20,000	$28,000	$37,500

The following sales figures represent the combinedestimates of the individual sales experiences of the current owner/ members while working together as Golden Meadow Products.

	1997	1998	1999
Sales	$20,000	$28,000	$37,500
Gross Margin	$8,000	$13,000	$12,000
Gross % (calculated)	40.00%	46.42%	32.00%
Operating Expenses*	$11,000	$12,000	$16,000
Collection Period (days)**	0	0	15

Note:
*Persons providing estimates did not include wages for themselves, use of personal vehicles to transport goods to market or time spent by family members when totaling Operating Expenses.
** Collection Period estimates reflect that some owner/members began selling to restaurants and wholesalers on a net 30 days due basis.

Company Industry
The meat industry is dominated by major packers, processors, food brokers with relationships to major institutional accounts and large grocery store chains
selling their store brands of meat. A list of major competitors is not included there since they are so well known.

During the last two years, the beef industry has seen cattle prices drop to record low levels. This has led to groups wanting to start their own slaughter and processing operations. Marketing Coop is actually ahead of the competition since it has been in business since 1995. Besides the grass roots level of interest in starting their own operation, changing trends in the marketplace now make the idea of small specialty meat businesses more feasible.

Legal Structure
Cattle Producers Marketing Coop is a cooperative with members composed of independent cattle producers who plan to provide premium identity preserved beef products directly to the consumer. To accomplish this, they plan to create their own processing plant and will control marketing of their products from the farm to the consumer.

In addition to committing $5,000 per share, each member had to agree to the following in order to become and maintain ownership in the cooperative:

• Acknowledge that they are participants in a marketing system and, as such, they are responsible for producing a safe, consistent, quality product for the end consumer if the cooperative is to succeed.
• Deliver a specified number of cattle to the processing plant each year according to a predetermined schedule.
• Raise cattle according to prescribed methods.
• Open their cattle raising facilities to inspection.
• Agree to participate in at least one consumer marketing event each year.
• Attend periodic member meetings.

Employment
A beef processing facility will be purchased from Larry and Linda Cutter, owners of Larry and Linda’s Locker Plant, by the members of Marketing Coop. It will employ state-of-the-art technology. Inasmuch as product safety will be a key aspect of their marketing effort, it is intended that quality control methods will exceed USDA standards. The plant currently meets all OSHA and HACCP requirements as well as waste discharge amounts. The plant will be capable of processing 10,444 cattle annually, or 40 per day, single shift, five days per week.

It is anticipated that the processing facility will require 15 employees, including 12 in production and material handling; one in maintenance; three in office and sales; one in management. Larry Cutter, the custom meat processor, will be general manager.

Mission/Vision Statement
The mission of Cattle Producers Marketing Coop is to provide increased and more stable income by raising, processing and marketing high quality beef products to consumers who are willing to pay a premium for these products.

Current and Future Goals
The goals of the company are as follows:

• Provide products to consumers that are consistently high quality.
• Raise cattle using humane and environmentally sound practices.
• Process beef using latest appropriate technology methods.
• Provide safe, off-farm employment at above average wages for rural based families.

Company Products or Services

• The company’s trademark products are available tray ready, guaranteed lean, and certified as 100 percent free of hormones, preservatives, antibiotics or chemicals. This product line also includes diversification into a growing assortment of handmade items ranging from grandfather clocks of native oak and walnut to homespun yarns with natural dyes to original oil and watercolor paintings of local scenes.
• Traditional raised and free-range cooked beef products sold at farmers markets and events and festivals in Iowa and Nebraska.
• Commodity grade live cattle as a means of handling producer overrun and as a method of moving cattle that required antibiotics during the growing process.