Everything you need to write a killer executive summary for your business plan
Keep reading for insider tips from a professional business writer on how exactly to write a captivating executive summary that will maximize the impact and success of your business plan.
No matter how excellent your business idea, it is the executive summary alone that persuades a reader to spend more time with the plan to find out more about your venture.
Some financiers receive hundreds of business plans every month. Understandably, they do not read them all. Instead, they can tell in a couple of paragraphs if it is something they may be interested in.
The Executive Summary is so important, in fact, that some investors and lenders prefer to receive just the summary and financials before requesting the full business plan. So if you can hook your readers here, they will ask for more.
Similarly, senior decision-makers on many company or bank boards and committees will often read nothing else than an executive summary when approving a decision to back a business.
In other words, your Executive Summary is the first impression many readers will get of your business. Make sure it is a great one. Only a clear, concise, and compelling summary of your business right up front twill persuade readers to wade through the rest of the plan.
When completed, your executive summary will answer these questions for your readers:
Executive summary is an introduction to your business, which provides a brief snapshot of your plan as a whole. To that end, concisely highlight the most important concepts and impressive features from each section of your completed plan, addressing the following areas:
|Business plan sections:||What readers look for:||Products and services||What you sell||Your basic business concept makes sense|
|Your audience and ideal customer|
|The problem you solve for customers|
|Market opportunity||Opportunity in the market||A compelling market exists for your product/service|
|Future of the industry|
|Competitive advantage||Your business has significant competitive advantages|
|Financial Projections||Funding requirements||Backers have an excellent chance to make money / get money back|
|Financial forecast, growth plans and expected returns||Your financial projections are realistic|
|Strategy||Mission||Your business has been thoroughly planned—you know where you are going and how to get there|
|Company description||Management team||The management is capable|
|Track record to date|
Essentially, you should make it crystal clear to the that a compelling market opportunity exists for your product/service and demonstrate that your business is well-positioned to exploit it.
Remember to be brief and concise. Organize the information in a way that gives the best impression of your business to your target reader. Combine related topics if that improves the flow of the document.
If the readers of your executive summary conclude that the above elements exist in your business, they are likely to commit to reading the rest of your business plan.
So, let’s examine each of the key elements in more detail to make the reader excited about the potential of your business plan and interested to read further:
Answer this question for your readers:
Aim: Convince the reader that your basic business concept makes sense.
Give a concise overview of your business idea, purpose and goals. Summarize why you have created this company and what your business is all about in one or two sentences, but no more than a paragraph.
Answer these questions for your readers:
Aim: Demonstrate to the reader that your product/service solves a real problem in the market and that the problem is worth solving.
Briefly describe the products and services your company provides and what problems you solve for your target customers, making the case for why your product will be successful:
List the products or services your company sells or plans to sell.
Explain the need for the products or services:
Outline why your product or service will be valuable to your customers and the advantages that will make it compelling enough for them to purchase.
Answer these questions for your readers:
Aim: Convince the reader that large and compelling market demand opportunity exists for your product/service.
List the target market you intend to reach and explain why you chose it:
Provide a brief description of your ideal customers and how do they break down into recognizable types or segments.
Indicate that you have done thorough market analysis by providing a summary of your market research results, including:
Answer these questions for your readers:
Aim: Convince the reader that your business has a significant competitive edge to succeed in your target market.
This section is where you describe the gap in your target market, how your solution can fill it, and the competitive advantages that will enable you to exploit this market gap.
Hence, include information about your competition and what differentiates your business:
Who are you up against?
What other options do your customers have to address their needs?
Indicate the nature of your competition and how the market is currently divided.
What comparative advantage does your product/service have?
Show your conclusions on your company’s competitive position and why your company will be able to compete successfully. Remember to list any important distinctions, such as patents, major contracts, or letters-of-intent.
What unique selling proposition will help your business succeed?
What makes your solution better for your customers compared to the competition?
Is competition going to get tougher?
Summarize your conclusions on whether competition is going to intensify going forward.
Answer these questions for your readers:
Aim: Convince the reader that your business has the right structure and capable management team in place to succeed.
Your goal is to demonstrate that you are well-positioned to exploit the market opportunity by highlighting the positive factors in your company’s management, structure and history.
Include a short statement that covers the basic company details, such as the company name, when your business was formed, the names of the founders and their roles, number of employees, business location(s), and legal status.
State whether your company is a startup or continuing business, when it was founded, how far along the product or service is in its creation, and if you’ve already made sales or started shipping.
Briefly describe the bios of the key members of your management team, particularly those of company founders/owners, as well as the key professional advisors.
What do they bring to the table that will position your company well to take advantage of the market opportunity and make the business a success?
Highlight management’s vision and passion, along with the relevant skills, experience, qualifications, subject-matter expertise, business acumen, industry connections and other capabilities as they relate to the venture.
Showcase the key operational features that will give the business a competitive edge.
This could include anything from an advantageous location, through innovative manufacturing technology and processes, to preferential supplier and distribution agreements – and anything in between.
Outline the strategy to achieve the company’s goals and continuously strengthen its competitive position.
Next, indicate the keys to success that you intend to use in order to implement that strategy, such as:
Address your plans for where you would like to take your business in the future.
Spell out the objectives you have for the company, what you plan to do:
Make an educated projection for the expected performance of your business, including:
Summarize the expected financial outlook and performance for your business, answering the following questions for your readers:
In general, it is customary to indicate financial information for years one through three or five, depending on the requirements of the business plan reader. Typically, this includes Year 1 and Year 3 / 5 results; and Year 10 / long-term goals.
However, your readers can find the detail of the projected financials further on in the plan. In this section, only provide the highlights of your forecast and encourage the reader to keep reading to learn more about your company.
How will you fund your business to get it started and grow it to the next level?
If the business does not require any outside financing, you can note that here or just remove this section from your plan altogether.
When you are using the business plan for financing purposes, explain how much money is needed, from whom, and how you will utilize it to grow your business, hinting at an exit opportunity:
Writing an executive summary is arguably the most fun – and important – part of writing a business plan.
You have already completed all the research, thinking and writing about market demand, competition, strategy, operations and financials.
All that is left to do now is to summarize the key conclusions into a coherent narrative, answering the million-dollar question:
Why is your plan worthy of backing?
Here are 7 tried and tested tips to prepare a compelling summary of your business that will convince the readers to read through the rest of your plan:
Ask yourself: “Who will be reading my business plan?”
Since the summary is what the reader reads first, and may be the only section read at all, you can significantly improve your chances of a positive reception if you know the answer to that question before you prepare your executive summary.
Remember, your reader is only going to spend a few minutes, or even seconds, on your executive summary. This is especially true if you are targeting busy investors or lenders for whom it is not unusual to review more than 1,000 each year.
Naturally, the readers are going to focus on the issues that interest and concern them most. If you understand their priorities, you will be better able to craft the summary to “push the right buttons”. For example:
Do your homework to discover the interests and concerns of your most likely business plan recipients, and then write and organize the summary in a way that most appeals to your target audience:
If you are not able to identify the specific person who will read your plan, just focus on the general type of a person that is most likely to receive it and their concerns.
However, it is not a good idea to tailor the executive summary for just one specific person or organization, especially if your plan is likely to end up in the hands multiple and/or unknown recipients.
To be on the safe side, target your summary to address general institutional concerns rather than individual preferences.
The Executive Summary enables the readers to quickly understand the highlights of your business and decide whether to commit more of their time to reading the full plan.
To that end, you need to motivate and entice the readers by your own optimism about how well-positioned your business is to exploit a compelling market opportunity, conveyed in a dynamic, positive and confident tone.
Your executive summary will be the last chapter of the business plan that you prepare.
Even though the executive summary always appears first in the completed document, it is usually crafted last after you have had a chance to carefully consider all key aspects of your business throughout the rest of the plan.
The executive summary is the place where you bring all your planning together and sum up the separate parts of your business proposal to provide an overall outline and highlight the strengths of your entire plan.
Therefore, you will find it much easier and faster to come back and produce this section once you have completed the rest of your business plan.
That way, you will have thought through all the elements of your business, work out the details, and be prepared to summarize them. This approach will not only increase the consistency and accuracy of the plan, but also help make it more compelling.
So, if you have not yet finalized the other sections of your plan, proceed to the next section, and return to the executive summary when you have completed the rest of your plan.
Once finished, the executive summary will become “Chapter 1” of your business plan document.
A good summary contains highlights from all of the subsequent sections of the business plan.
To achieve that, select the key points from each section of your completed plan by summarizing conclusions you have reached in each area. Remember to focus only on the most important and impressive features of your business.
What sets your business apart from the competition? Early on in your summary, showcase your distinguishing qualities and make sure you describe your winning concept in a way that any reader can easily grasp.
Use logical writing to tell a story, freely changing the order of sections and combining related topics if that helps to improve the flow and make a good impression.
The executive summary provides a brief snapshot of your business, casting a spotlight on the most important facts and concepts from your entire business plan.
As a result, this section should be clear, concise and to the point. Make each word should count.
In case the summary read by people unfamiliar with your industry, avoid any technical jargon or provide sufficient explanatory notes.
By the time you reach the executive summary, you may be tired from all the planning and writing. However, remember that this really is the most important section of the business plan.
The best investment you can make is to spend sufficient time to perfect the summary, including ruthless editing. There are professional editors who can help you make it flawless.
Looks matter. Your business plan will be well researched, analysed and written, but it must also be well presented. While your plan will ultimately be judged on the quality of your business concept and strategy, you also want to make sure it gives the best first impression possible.
And nowhere is presentation more important than in the executive summary, because for all readers it will be the first page(s) they read – and some will read nothing else.
The key advice here is: Break it Up. Large, dense blocks of text intimidate readers.
Dividing the Summary text with paragraph headings, bullet points and white space makes the information on a page more inviting and appealing:
Because you are limited to so few pages, it may seem counterintuitive to give up space for visual considerations, but these effective techniques make your Summary much more accessible to the business plan readers.
The way you prepare and present the executive summary is an indicator of your professionalism. A polished Summary sheds a favourable light on your business. A sloppy one works against you.
The executive summary in a business plan should be no more than 2-3 pages in length, with 1 page being perfectly acceptable and often preferable. The advantage to the busy business plan reader is that they are able to skim through this short summary in a few seconds and read it in full in less than 5 minutes.
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