A business plan can be a crucial component of long-term growth. It can help you succeed, whether you are a small business owner or the CEO of large corporations.
A detailed business plan is important, but it’s also crucial to provide readers with a concise and eye-catching executive summary. Managers, investors, lenders, CEOs and executives are all busy. Always. They may not be able to read the entire business plan.
How can you tackle that? We’ll help you write an executive summary in this article.
Let’s get started!
What is an executive summary?
An executive summary, as the name suggests, is a short document that appears at the beginning or end of a business plan, report, proposal, or other documents. This section focuses on the company overview and future goals and captures the attention of the reader.
An executive summary is meant for readers to quickly grasp the key information contained in your business plan. The executive summary, which is usually two pages long, is often written after the business plan has been completed. The executive summary covers the highlights from all other sections.
An executive summary, unlike an abstract, is a concise overview of the content in the business plan. Abstracts are used more often in academic writing. They act as teasers for readers and allow them to decide if they want the full article.
Executive summary: How important is it?
An executive summary is a description of a plan that will be used to seek funding from banks, angel investors, or venture capitalists. The executive summary’s main purpose is to give enough information to make the reader want to read the entire plan.
It is, however, not an introduction. An executive summary that is not a lead-in to the entire plan will not be a good idea. It should be more like a highlight reel.
There are many benefits to writing an executive summary.
- Create a concise description of the what, why and when of your competitive advantages.
- There is the possibility of repeatedly using and repurposing content as part of the marketing process.
- An executive summary is a great way to organize your thoughts and keep all your ducks in order. To create an executive summary, you will need to do some accounting. This will help you determine the value of your practice, how you plan to sell it and the potential growth involved. It also helps you to guide a buyer to make sure they are getting a fair deal.
The good news about creating an executive summary is that it is brief. The bad news is that it can be difficult to write. Because it is at the top, everyone will be paying attention to the executive summary.
Your proposal or plan will be ruined if your executive summary is not clear. The executive summary should be able to identify the needs of your potential audience and pinpoint them with laser precision. What key components should your executive summary include? Continue reading to learn more!
What are the components of an executive summation?
There is no one right way to put together an executive summary. There are some elements that can be used to create an executive summary. An executive summary could include the following elements.
Business description
Identify your company’s name, address, and mission. It is important to clearly state what your company does, and what your value proposition is. Next, give a brief description about your target audience – the people who are most likely to spend money on your solution.
Now it’s time to give some history about your business. You can provide more detail about the date and who launched your business, their backgrounds, roles, and where it stands today.
You should include evidence of “traction” if you are a young company and writing a business plan to raise capital. These can include revenue growth rate and customer growth rate as well as results from consumer surveys. This doesn’t need to be a lot, but early success will show that your market research and business model as well as product/service are sound.
Product or service description
Your executive summary should contain at least two paragraphs that provide more information about the company’s products and/or services, their competitive advantages, and why there is increasing demand for them.
You shouldn’t claim that your products/services are the only ones available. This will damage your credibility. You should at least be able to compete with current methods of doing things. Most likely, readers already have seen similar plans. Therefore, highlight what makes your products/services different.
Your business solves the problem
Your audience needs to know what problem you are solving. While your business may not need to address a larger social problem, it should address a market need or opportunity.
Use simple language to show what you have and how it solves your problem. This could be your success rate, or other languages that show that you are a competent practitioner and that they would profit the most from your practice.
Growth opportunity and market size
Investors are looking for a large market that is growing. Spend a few sentences explaining the market’s size, segmentation and growth. What number of companies and people are involved in your niche? What is the rate of growth? What are the factors driving this growth? Is there a way to improve the situation that you don’t have yet but consumers can? Please be specific.
Financial overview
It might be as easy as highlighting the recent sales and growth in the past year if you’ve been around the business for a while. This might include a description of projected sales, or a goal for the next year, or three years in the future. A simple bar chart or pie chart showing sales and gross margins for the next three year is a good idea.
Your team
Investors fund more than just ideas. Who are the people behind your business? What makes your team unique? What are their past achievements? If you want to explain the reasons why each member of your team is a good fit, name their roles and responsibilities.
You might also want to consider any gaps in your team, and what you plan to do to fill them. If you are looking for potential partners or candidates, mention them briefly and then expand on their qualifications in your business plan.
Needs for funding
Your executive summary should include the amount of money you want if you plan on using your business plan for fundraising. Investors should know what you are asking for and how much. The minimum amount you require to reach the next milestone in your business plan should be included in the request.
Future plans
Where is your company headed? What is your business’s future? What expansion plans are in place? These should be included in your executive summary’s last paragraph.
7 tips to create a powerful executive summary
Keep it simple and short
An executive summary isn’t just a summary. Your audience doesn’t need an in-depth analysis. Keep it short and sweet.
It should not exceed 2 pages, according to many sources. A single sheet with both sides printed is more attractive than a five-page summary. However, business plans can sometimes be 50+ pages long and it is nearly impossible to summarize 50 pages in two pages. The executive summary should be approximately 5-10% of your business plan.
It is a good idea to have someone outside of your circle review your draft and then reflect on what they took away from it. If they don’t like it, you can take a step back to try again. Remember that bulleted lists can be your best friend!
Do your research
Although an executive summary should be brief, it should contain a lot of research. Your summary should include financial considerations and competitive analysis.
Your business plan or report will provide more detail, but it is important to highlight key findings in your executive summary. It’s like an elevator pitch. What information would you add if someone stopped reading your executive summary?
It is important to think about this and do your research.
Tell a story
Investors should understand the purpose of your executive summary when they read it. This is the beginning of your business plan. It should be a clear statement.
Be sure to tell your story in the executive summary. What is your business doing? Why do you do it this way? Who are your key stakeholders? These questions will allow your audience to be more excited about your company.
Modify it to suit the audience
Your executive summary may differ depending on who you are presenting your business plan to. Bankers, for example, are more interested in the financial overview. Therefore, they may expect more information about the company’s finances.
Angel investors may want more information about the company’s vision, and what it is trying to accomplish. Each to his own!
Justify and provide proof
All information in your executive summary must be supported by data and justification. You may not have the space to give the required justification. If this happens, make sure to mention in your business plan which section they should refer to to verify your assumptions and statements.
Last it
Your executive summary should be used as a guideline when you begin writing your business plan. Many entrepreneurs, even though the executive summary is only part of a business plan, prefer to write it after everything else.
It’s simple. If you don’t have a business plan, it can be difficult to write a summary. You should save your executive summary until the end and consider what you want to include.
After writing, proofread grammar
Proofreading the copy should be done at the end. Double-checking the copy to ensure spelling accuracy and avoiding typos or grammatical errors is a good idea. The executive summary writer isn’t necessarily the best person to edit; they are prone to gloss over mistakes.
Find someone who is proficient in copy-editing. Sloppy content can reflect a lack of professionalism and affect the perception of your company.
Avoid these 5 common mistakes when writing an executive summary
Avoid these common mistakes when writing an executive summary.
Using cliche language
Avoid cliches in any type of writing. Avoiding cliches in your executive summary can cause people to be offended.
Cliche language can also be prone to underdeliver and overpromise. Your executive summary should reflect your company’s reality and identity. If you don’t believe your facts, it is time to say goodbye.
Introduce new information that isn’t in your business plan
Each section of your executive summary must correspond to a portion of the main business plan. Don’t confuse your audience by adding irrelevant or new information to your executive summary.
Outsourcing the job
Many business owners find it easier to hire someone to write their executive summary when they are too busy. You really do need to do it yourself.
A compelling executive summary should be used to explain why lenders or investors should invest in your business. It will encourage you to reflect on your value proposition and choose the most important points to highlight. You will also be able to sharpen your selling skills to raise funds.
Graphics not included
The perfect executive summary should be clear and concise. It should explain everything you have to offer, as well as the desired outcome for the audience. Including graphics is a great way to achieve this goal.
Graphics offer many benefits that words cannot.
- They show logical and numerical relationships
- They communicate spatial information better than words alone
- They grab attention and are more interesting.
- These increase the credibility of your message
- They take less time and effort.
Don’t get too deep into your proprietary technology.
Potential investors and lenders will want to learn more about your solution. To give potential investors or lenders a detailed overview of your products/services, and how they work, you can use your executive summary. You can also include appropriate analogies to help make it more tangible. Product demos can be a great way to explain the user experience and generate enthusiasm once you have met them.
The bottom line
This article is over! You may now be more confident in writing an effective executive summary.
As new trends or reporting methods emerge, we’ll keep this content current. We value the opinions of our readers and welcome them to share theirs. We would love to hear from you if you have any questions or comments about concepts and terms. We are happy to assist!
