An important part of starting or expanding a business is drafting a solid business plan. Each aspect of this plan is crucial in not only charting the projected path of the business but how it is perceived by the public, especially investors.
While each section of your plan is important, the executive summary is considered the most essential, as it gives a brief synopsis of where the company is headed and the well-researched reasons it will be successful. As the first page of your plan, the executive summary carries a great deal of importance and should grab the reader’s attention immediately.
For the best results, your executive summary should be written after the rest of your business plan has been refined. This allows you to support your summary with fresh examples and an informed perspective.
The Purpose of the Executive Summary
If you want your business plan to be read, you have to make the executive summary stand out. Keep in mind that investors, managers and lenders are being pulled in many different directions throughout the day, and a lackluster executive summary won’t compel them to read your plan.
A typical business plan is over 20 pages, and a good executive summary is meant to give the reader an idea of what to expect throughout the plan. To sum it up, the executive summary is the first page to be seen and will influence whether or not the viewer will keep reading.
Your executive summary is meant to excite and compel investors, which will motivate them to set up face-to-face meetings. Without a good executive summary, those meetings may not materialize.
Getting Started on the Executive Summary
The pressure of writing a one-page summary that carries so much weight can be overwhelming, but it’s certainly doable. Start by answering these simple questions, and you will be well on your way to laying the foundation for a solid executive summary:
- Who is your audience?
- What is the goal of your idea?
- What sets your company apart?
- Do you already have a customer base and income?
- Are there proprietary rights or patents that you own or will be able to obtain?
- Why did you decide to start this business?
- How are you qualified for this industry or idea?
- What are your future plans?
- Why are you doing this now?
Unfortunately, there is no strict template for writing an executive summary, as it is dependent on factors like industry, budget and where you are in the process of opening and running a business. Even so, your own writing style and passion will go a long way in determining the tone of your business plan, which might be just as important as any other part of it.
Nonetheless, there are certain questions and considerations that must be addressed before drafting a plan.
What to Include in the Executive Summary
Regardless of whether you’re opening your first business or expanding your existing one, you are attempting to convince investors to give you money. In return for that money, you have to make a compelling case for your venture’s ability to be successful.
There are certain key factors they will want to know before they even entertain the rest of your business plan. The executive summary should include the following information:
- A mission statement: Simply state what your business is all about, and remember to keep it short and sweet.
- Company background: This can include a brief history of those in the business, their roles, location, your projected number of employees and even when the company was formed. If your business hasn’t started yet, focus on the skills and history that you and your business partners bring to the table.
- Projected growth with specific targets: Provide examples of how your company grew or how you project it to grow with extensive market analysis.
- What you offer for the business: Briefly describe what you do, product you provide or services you deliver.
- Existing funding: Discuss current investors, sponsors and other financial information.
- Future plans: Investors want to know what your future goals and plans entail. If you don’t have any, why should they put their money into your business with no real future goals of increasing their investments?
- Be convincing: You’ve done the research and have the passion for this new idea or growth possibility, so let others see your confidence in the executive summary.
The Finishing Touches
Executive summaries can vary in length, but ideally you should be able to tell your story in two pages or less. Even then, you should endeavor to keep yours as short as possible. Keep in mind that it is a summary, a teaser to get the reader interested in continuing their evaluation and subsequently requesting a meeting with you.
Above all, your summary should be a clear and concise explanation of what your company does. It should be simple to understand, but not too unsophisticated as to make investors think that you’re incapable of running a business. Remember to make it descriptive, to use evidence from your research and projections, and to keep it as short as you can. Follow these steps, and you’ll be on your way to writing an informative and effective executive summary.