When you’re trying to sell an idea to a potential investor, you’ll need to write the slick executive summary. Investors, lenders, executives, managers, and CEOs are busy and might not have time to read your full business plan without first getting the general idea of your company or goals through a brief review.
This article covers how to write one that will get your business plan read and your foot in the door.
What is an executive summary?
An executive summary of a business plan is an overview. It serves to preface your business plan and to summarize the key points of a document for its readers, saving them time and preparing them for the upcoming information.
The executive summary is also an important way for you, as the entrepreneur, to reveal which areas of your company have the clearest selling points, and which areas may require a bit more clarification. Figuring the vital points of your business, make you think hard, decide what’s essential, and discard things that aren’t essential to the story line.
Most of all, it must be clear and concise, only a page or two. But it also has to tempt the reader to read the rest of the content. If it doesn’t catch the reader’s attention, the plan will be set aside unread – a problem if you’ve written your business plan as trying to get money to start your new business.
What Information is Included in Executive Summary?
The content of the executive summary will vary between startups and established businesses. However, there are certain elements common to both:
- Purpose of Business Plan – Describe the reason for writing the business plan, such as securing funding, internal use, bank requirements or other.
- Background – Explain the purpose of the business, principal activities and clearly articulates the problem or gap in the market.
- Value Proposition – State the value that the product or service offers to target customers. This is often the solution the business offers to a problem faced by customers. What sets your company apart from your competitors?
- Market Opportunity & Size – List the potential markets that the business could enter. Market size is the number of potential customers or transactions in each year.
- Management Team – Introduce the team responsible for executing the business and how each member contributes to its success. Positions, experience, and relevant skills can be included in this section.
- Barriers to Entry – Detail the obstacles to entering the market, such as laws, licencing, high initial costs, patents, strong customer loyalty to competitors, and other factors.
- Financials & Use of Funds – Summarise the financial plan by describing how funding will be obtained and managed, including a forecast of business financials for the next 3 years in a way that is both honest and convincing. If you are requesting money from a financial institution, state the specific amount you want. For investors, state the percentage stake in the company you’re offering for their financial backing.
Tips for Writing the Executive Summary
- Write it last. Executive Summary is best completed at the end, after filling out the rest of the plan (because it is an overview of the entire plan). It may be worthwhile going back into each section to assist with completing each field.
- Keep your language affirmative, positive and compelling but do not oversell. Don’t use weak language to diminish your business goals. Instead of presenting ‘Origin Hardware might be in an excellent position to win government contracts’, put ‘Origin Hardware will be in an excellent position…’.
- Write in concise language using simple terms. A person without knowledge of your business and your operating industry should be able to understand your executive summary and recognize the opportunity it presents.
- Polish your executive summary. Go through it and read it back to yourself aloud. Does it flow or does it sound rough? Is it clear and concise? Once it sounds good to you, have someone else who knows nothing about your business read it and provide feedback for improvement.
- Ensure the content of your summary matches your business plan. The information that you share in your executive summary should match what you have in your full business plan. Make sure that there are no discrepancies between the two.
If you need help with a good executive summary for business plan, Planium Pro has this section laid out for you, all that is left for you is to fill out the details about your business. Sign up to our 14 day free trial to get your hands on experience.
Want some further advice on how Planium Pro can assist you in writing your business plan? Give us a call on 1800 966 081 or email at [email protected], and one of the members of our team will be happy to assist you.