Company history in a business plan? Yes, it’s a good addition to some business plans, but not all.

For this article, I want to look at how to decide whether or not you include company history, and if you do, what to include and where to put it in the plan.

The purpose of the business plan

When considering what to do with company history for your business plan, first consider the use of your business plan.

  • For the traditional business plan to be used as a business summary for potential investors, bank loan managers, partners, or legal requirements, a short summary of company history is usually appropriate.
  • For lean business plans, operational plans, and strategic plans to be used by startup founders, owners, and management team, company history may be overkill. Include it in your plan only where it relates to actual future business. That might be with strategy, tactics, milestones, metrics, or projected sales and spending. In those cases, there should be some direct connection between history and future business.

Focus business history on what matters to planning

As soon as history is relevant, of course, you cover the basic information. That includes when and where the business started and who started it. If the business has changed its formal legal entity, such as going from fictitious business name to LLC or corporation, that should be included.

Beyond those essentials, you use your judgment about what matters to the specific business purpose. Not everything does. Some details matter more than others. Businesses that have been around longer accumulate history as they go. They have their founders, their early days, initial launches, changes in strategy, milestones such as new products or new locations, investments, and partners joining and leaving. Some businesses moved from one state to another. Other businesses have changes in ownership, big investment moments, awards, problems overcome, and so forth.

Don’t assume that a brand-new startup has no history. Startups don’t typically have long histories, but even a startup has its history of who came up with the idea, how that person came up with it, and how and why other people joined. This can matter to investors.

Stay flexible as you describe history. Always keep your specific business purpose and your target reader in mind. If you have a longer history, then you probably have highlights you want to include, and some key points you want to make. Never bore people with information that has no connection to business decisions.

Where to put history in your business plan and pitch

In a business pitch, which is presumably a slide deck that guides an in-person pitch, history comes early or not at all.

If your history adds some differentiation about your commitment, your mission, your unique identification with the problem you solve and how you solve it, then that’s a good starting point. When it’s a good story, you should tell it. But if it doesn’t add power and just distracts, then leave it out.

In a traditional business plan, include your business history in a section that focuses on the business itself. In the classic business plan outline I used for decades, a business plan outline included a company section, usually placed second in the document, right behind the executive summary. It includes details about the legal entity, ownership, history, intellectual property, and important assets.

In a lean plan, for owners and management team, history is rarely relevant. Include only the part of history that might relate directly to strategy, tactics, milestones, or metrics. If it’s relevant, include the history detail in a bullet point related to actions or the future.

Tim BerryTim Berry

Tim Berry is the founder and chairman of Palo Alto Software and Follow him on Twitter @Timberry.