What is the executive summary of a business plan?
An executive business summary summarizes a larger business plan while conveying significant research results and takeaways. As well as suggested next steps.
It describes the company’s business model and outlines the main facts and strategies that support the company’s development.
If the business plan is being submitted for funding, the executive summary gives the lender or investor a quick overview.
It helps them decide if they want to read the remainder of the plan.
It should let the reader quickly identify your company’s main competencies, strengths, prior accomplishments, strategic emphasis, and direction.
As well as an explanation of how these aspects differentiate your business.
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Why Do I Need an Executive Summary?
As previously mentioned, your business plan is a lengthy document that should be reviewed carefully.
Capturing the reader’s attention with an intriguing, brief summary of your strategy saves them time. And indicates which sections of the business plan should be reviewed in depth.
This increases the likelihood of your business plan being read. This is why you need an executive summary that is well-written.
Importance of an Executive Summary
The executive summary’s main goal is to present a shortened version of the larger document and to attract the reader’s attention.
Investors, lenders, and C-level executives rarely have time to read all of the long documents they get.
But, a well-written summary may help you capture their attention and, as a result, achieve your business goals.
It will make or break opportunities for funding, leasing space, and recruiting the best help.
Elements of an Executive Summary
The following are the key elements to include in your executive summary for your business plan:
The statement of the problem or the business opportunity
In most cases, there is a market gap or problem that your company aims to address.
Investors want to know whether the market actually needs your goods and/or services. Thus this is your problem statement, which must be mentioned in the summary.
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Your business concept
What a reader would want to know is how you intend to approach and solve the problem.
This is your solution or business model, and it should outline how your product or service can assist address the issue in a few sentences.
Here you will describe the industry in which you work, its size, and any trends that are impacting it favorably or unfavorably.
This gives readers an idea of the scope of the opportunity you’re pursuing.
If you’re looking for funding from investors or banks, they’ll want to know how you’ll use their money.
A brief financial overview should be provided in the summary, containing key points about how and where you propose to allocate the funds.
You should also offer a history or summary of any historical financial performance.
You must present future financial projections so that investors can assess if they will get a sufficient return on their investment.
And lenders can determine whether you will be able to repay your debts.
You must explain your timeline for key milestones in the future, in addition to presenting important milestones your company has reached.
Include dates for launching goods, hitting sales goals, hiring important workers, and so forth.
The target market and customer
Every business has a target customer base or market on which they focus their efforts.
In this section, you’ll describe the kinds of clients you’re looking for, as well as their demographic and psychographic characteristics.
When you enter a market or an industry, you will almost always face competition from other players.
Knowing your competitors and doing market research are both essential for success.
Your business plan readers want to know who your competitors are, what their strengths are, and where you’ll have a competitive edge.
A good executive summary must include a discussion of the competitive landscape.
You will introduce the key members of your team in this part. Your company’s success or failure is largely determined by the people involved.
As a result, any reader will be curious as to how well-equipped your staff are.
In the executive summary, mention important staff members and the expertise and skills they bring to the table.
Past achievement is the strongest indicator of future success.
The reader will have a better understanding of how your business has evolved and grown through time. As well as what you’ve been able to achieve.
Even startups have generally completed milestones such as naming their business, developing goods, locating a site, testing, and so on.
Outlining the company history can be a valuable tool. that is, if you intend to include the executive summary of a business plan in your fundraising efforts.
Keep in mind that in fundraising, storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
How to Write an A Executive Summary
When you are writing an executive summary of a business plan, you should:
- Include supporting research
- Write the summary last
- Capture the reader’s attention
- Make it stand out on its own
- Simplify things
- Keep things positive, but realistic
Let’s take a closer look:
Include research to support your claims.
Research should back up the statements you make in your executive summary and business plan. And you should mention this research in your business plan using footnotes.
The summary should be written last.
The executive summary should be written in a similar order to the detailed business plan.
As a result, it’s critical that you create the summary only after you’ve completed all of your research and your full business plan.
This helps ensure that only the most important parts of your business plan are included in the summary.
Grab the attention of the reader.
While an executive summary should be informative, it should also capture the audience’s attention right away. It should pique their interest, and entice them to read the rest of the document.
Even when you’re putting up an objective presentation of your research findings and the business’s planned future, keep in mind that you want to elicit enthusiasm from your audience.
At the start of your summary, include a thought-provoking statistic or an inspirational and relevant quotation to grab the reader’s attention. And get them thinking along the lines you want them to.
Succinctness is one of the most important qualities of an executive summary.
You should try to keep your summary as simple as possible, with the objective of fitting all of the important details into one page.
The briefer you are, the clearer your message will be, and your readers will have greater faith in your strategy.
Maintain an optimistic attitude.
Only highlight the positive aspects of your research and business strategy in your executive summary.
Risks, impediments, and problems should be addressed in the body of your strategy.
In your summary, maintain a cheerful tone and utilize uplifting language.
An executive summary may be thought of as a simplified version of your business plan.
The remainder of your larger business plan should be directly aligned with your executive summary.
Read over your business plan and extract the most important information from each section as you write your executive summary.
Your executive summary should match the numbers, facts, and objectives in your business plan.
Someone with no previous understanding of your business or industry should be able to read your executive summary.
And understand the key findings from your research, as well as the fundamental parts of your business plan.
Your audience, whether an investor, banker, advisor, or executive, should be eager to read more at the end of your executive summary.
Your executive summary should be comprehensive, but not all-inclusive.
If your audience wants to learn more, the summary should persuade them to read the larger business plan.
Example of a Startup Executive Summary of a Business Plan
The best example of a startup executive summary is formal yet friendly.
It invites the reader to participate in a great opportunity. Here’s an example of an executive summary for a teaching center.
The company began as a tutoring service at a High School. After completing their teaching qualifications at the University of Washington, the co-founders went on to form the company. On September 16, the company relocated off-campus and into its first office at 14 ABC Road. As a result of the move, the company is now able to serve the greater community.
Despite the fact that the national average high school graduation rate has improved to 84 percent in recent years, Area schools have continued to decline. It has a graduation rate of 68.6%, according to USA Today, with just 41.7 percent of students holding a high school diploma. In addition, the crime rate has risen by 15.47 percent in the last year. There are now just two places for students in middle and high school to work on homework after school. These are the YMCA and Boys and Girls’ Clubs, neither of which employ full-time teachers.
Low-performing students can use our site after school to work on their homework. Our teachers are local students who have completed high school and are currently enrolled in college or post-graduate education. We hope to start a teaching process that will boost overall graduation rates by putting recent graduates in teaching positions.
Our Target Market
The company aims to help students in middle and high school who are struggling, especially those who have had run-ins with the police. In an ideal world, these students would also bring their friends to the center. The ultimate objective is to educate these students until they graduate, and then return as mentoring teachers. and, that’s our target market.
Key to Success
Although we are new to the community, we have a number of advantages that will ensure our success. This includes low competition, marketing expertise, local business, and government partnerships.
We were able to serve 78 children last year thanks to several grants and investments. In the next year, we aim to reach out to more students and grow our network. We expect to cover our costs in three years with additional funding from investments and small membership fees from students.
Opportunities for Investment
We are now seeking investment partners from local business owners who are worried about the city’s future. Within the calendar year, we expect a financial and educational return on investment. After all, investing in a child’s future is the most important investment of all.
Are you ready for some more in-depth information about how to create an executive summary? Check out this video I have created outlining little-known nuances. You’re sure to find it helpful.
Best Practices For Writing an Executive Summary of a Business Plan
Even though it will be the final component you write, place the executive summary in the first section, before or after the table of contents.
- Be positive, well-articulated, and well reasoned
- Explain how you came to your conclusions
- Identify the goal and extract the most important suggestions or requests
- Organize it in the order as the information presented in the overall business plan
- Don’t add anything to the executive summary that isn’t included in the business plan
- Create the summary by rephrasing information rather than just copying and pasting
- To guarantee consistency, use terms from the main business plan
- Keep it brief, concise, and to-the-point
- Include all key fundamentals, including financials
- The length of an executive summary should be between one and three pages
- Describe the use of investment funds and their benefits
Remember to end with a captivating line or two that addresses the reader’s main question: “Why is this a successful business that I must be a part of?”
The purpose of the executive summary of a business plan is to entice readers to flip the page.
Make sure the rest of your business plan lives up to what you promise in the summary.
Though often, it is the executive summary that will entice them to invest, partner, or lend you money.
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