<?xml version="1.0" encoding="us-ascii"?><InstanceReport xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"><Version>2.4.0.8</Version><ReportLongName>005 - Disclosure - Note 1 - Description of Business and Basis of Presentation</ReportLongName><DisplayLabelColumn>true</DisplayLabelColumn><ShowElementNames>false</ShowElementNames><RoundingOption /><HasEmbeddedReports>false</HasEmbeddedReports><Columns><Column FlagID="0"><Id>1</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><CurrencyCode /><FootnoteIndexer /><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios><MCU><KeyName /><CurrencySymbol /><contextRef><ContextID>c0_From1Apr2013To30Jun2013</ContextID><EntitySchema>http://www.sec.gov/CIK</EntitySchema><EntityValue>0000892907</EntityValue><PeriodDisplayName /><PeriodType>duration</PeriodType><PeriodStartDate>2013-04-01T00:00:00</PeriodStartDate><PeriodEndDate>2013-06-30T00:00:00</PeriodEndDate><Segments /><Scenarios /></contextRef><UPS /><CurrencyCode /><OriginalCurrencyCode /></MCU><CurrencySymbol /><Labels><Label Key="CalendarSupplement" Id="0" Label="3 Months Ended" /><Label Key="Calendar" Id="1" Label="Jun. 30, 2013" /></Labels></Column></Columns><Rows><Row FlagID="0"><Id>1</Id><IsAbstractGroupTitle>true</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>1</Level><ElementName>us-gaap_DisclosureTextBlockAbstract</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText /><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>xbrli:stringItemType</ElementDataType><SimpleDataType>string</SimpleDataType><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Disclosure Text Block [Abstract]</Label></Row><Row FlagID="0"><Id>2</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_BusinessDescriptionAndBasisOfPresentationTextBlock</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><PreferredLabelRole>terseLabel</PreferredLabelRole><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="c0_From1Apr2013To30Jun2013" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; MARGIN: 0pt" id="PARA670"&gt;

      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;1.&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;Description

      of Business and Basis of Presentation&lt;/font&gt;

    &lt;/p&gt;&lt;br/&gt;&lt;p style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN: 0pt" id="PARA672"&gt;

      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;Sport

      Chalet, Inc. (the &amp;#8220;Company&amp;#8221;), founded by Norbert

      Olberz in 1959, is a premier, full-service specialty sporting

      goods retailer offering a broad assortment of brand name

      sporting goods equipment, apparel, and footwear. As of June

      30, 2013, the Company operated 53 stores including 34

      locations in Southern California, eight in Northern

      California, seven in Arizona, three in Nevada, and one in

      Utah. In addition, the Company has a Team Sales Division and

      an online store at sportchalet.com.&lt;/font&gt;

    &lt;/p&gt;&lt;br/&gt;&lt;p style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN: 0pt" id="PARA674"&gt;

      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;The

      accompanying unaudited condensed consolidated financial

      statements have been prepared in accordance with accounting

      principles generally accepted in the United States

      (&amp;#8220;GAAP&amp;#8221;) for interim financial information and

      with the instructions to Form 10-Q. Accordingly, they do not

      include all information and footnotes required by GAAP for

      complete financial statements. In the opinion of management,

      all material adjustments (consisting of normal recurring

      adjustments and accruals) considered necessary for a fair

      presentation of the financial condition, results of

      operations and cash flows for the periods presented have been

      included in the interim periods.&lt;/font&gt;

    &lt;/p&gt;&lt;br/&gt;&lt;p style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN: 0pt" id="PARA676"&gt;

      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;The

      accompanying condensed consolidated financial statements

      should be read in conjunction with the audited consolidated

      financial statements and notes thereto included in the

      Company&amp;#8217;s Annual Report on Form 10-K for the fiscal

      year ended March 31, 2013. The condensed consolidated

      financial data at March 31, 2013 is derived from audited

      financial statements included in the Company&amp;#8217;s Annual

      Report on Form 10-K for the fiscal year ended March 31, 2013.

      Interim results are not necessarily indicative of results for

      any other interim period or for the full fiscal year.&lt;/font&gt;

    &lt;/p&gt;&lt;br/&gt;&lt;p style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt; MARGIN: 0pt" id="PARA678"&gt;

      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;The

      preparation of financial statements in conformity with GAAP

      requires management to make estimates and assumptions that

      affect the amounts reported in the financial statements and

      accompanying notes. Actual results could differ from those

      estimates.&lt;/font&gt;

    &lt;/p&gt;&lt;br/&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>The entire disclosure for the business description and basis of presentation concepts.  Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity.  Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).</ElementDefenition><ElementReferences>No definition available.</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Business Description and Basis of Presentation [Text Block]</Label></Row></Rows><Footnotes /><IsEquityReport>false</IsEquityReport><ReportName>Note 1 - Description of Business and Basis of Presentation</ReportName><MonetaryRoundingLevel>UnKnown</MonetaryRoundingLevel><SharesRoundingLevel>UnKnown</SharesRoundingLevel><PerShareRoundingLevel>UnKnown</PerShareRoundingLevel><ExchangeRateRoundingLevel>UnKnown</ExchangeRateRoundingLevel><HasCustomUnits>true</HasCustomUnits><IsEmbedReport>false</IsEmbedReport><IsMultiCurrency>false</IsMultiCurrency><ReportType>Sheet</ReportType><RoleURI>http://sportchalet.com/role/Note1DescriptionofBusinessandBasisofPresentation</RoleURI><NumberOfCols>1</NumberOfCols><NumberOfRows>2</NumberOfRows></InstanceReport>
