What is an Executive Summary?
An executive summary is written to capture the reader’s attention, introduce them to your business idea, and present expected business outcomes within the context of your particular industry.
Because it’s meant to be a summary of your business plan, this section is usually written last.
Why Do I Need an Executive Summary?
An executive summary is used to provide a quick snapshot of your business to readers so they can quickly decide whether they are interested in the opportunity to get involved with your company. It condenses vital business information into a short, easily readable 1-3 page document.
How Long Should an Executive Summary Be?
An executive summary for a business plan should typically be between one and three pages in length; more than that might seem like overkill to the reader, while less may not give enough detail on your business idea.
Key Elements of a Business Plan Executive Summary
The business plan executive summary should include the following points in order to be successful:
- Problem Statement / Business Opportunity. What is the problem that you intend to solve? What business opportunity are you taking advantage of?
- Business Idea. This is what your business wants to do to solve the problem. It should include how it will approach this problem.
- Company History. The business’ history helps describe how the company has evolved and grown over the years (if applicable) and gives an overview of its work so far, even if it is a startup.
- Industry. Here you will detail information about the industry your business operates in, including any trends that are influencing its state right now.
- Target Market or Customer. Every business has a target customer base or a target market on which they focus. Here you will detail the types of customers you are targeting and their demographic and psychographic profiles.
- Competition. This section is where you explain who your competitors are, any strengths that your business has over them, and ways in which you have or will build competitive advantage.
- Milestones. This section is specific to businesses that need funding from investors or banks. It outlines exactly how many milestones have been achieved by the business already with what resources and timeframes are given for future ones.
- Financial Plan. This section includes 5-year financial projections so investors can determine whether they might get an adequate return from investing in you and lenders can ascertain whether or not you will be able to repay your debts. It also details key uses of funding if needed.
- Management Team. Here you will mention key members of your management team and staff along with their strengths, industry experience, skills, etc., so investors can determine how well equipped they are to achieve your business goals.
How Do I Write an Executive Summary for a Business Plan?
The executive summary is the most essential portion of your business plan since it’s the first thing investors, lenders, and/or other readers see. And if they aren’t interested, they’ll stop reading and you’ll lose them for good.
Give yourself the best chances of success by following these steps to write your executive summary:
- Complete the rest of your business plan first. Before you begin writing the executive summary, make sure all of your business plan is complete. If it’s not, your executive summary won’t be accurate and you won’t come across as credible.
- Describe your business in one paragraph. It can be difficult to describe what you do in just a few sentences, but it is necessary for this step. If someone stopped reading after the first paragraph of your business plan, they must have a solid idea of what your business does.
- Create an outline and add the details. Before you start to write the meat of the executive summary, create an outline with headings to help you hit all the highlights of your plan. Your headings may include the various sections of your business plan such as marketing plan and customer analysis. Under each heading, use bullet points to help summarize the information that supports your objective.
- Shorten it. You will find that you have a lot to say, but don’t have the space to say it all. Review the executive summary and remove anything that does not support your key message using the fewest words possible.
- Proofread. Be sure to check your work carefully before submitting your executive summary. Since this document will represent your business, there’s no room for mistakes or typos. If some information seems unclear after you have read through the document several times, rewrite that section for clarity.
- Get others to read it. Have a friend, spouse, business partner, or mentor review your executive summary. Gather feedback from each reader and make edits as needed.
Conclusion
Follow the above steps to write an effective business plan executive summary that will not only gain potential investors or business partners’ attention but keep it as well. Your business’ success might just depend on it!