An executive summary can only be described as the entryway to your business plan. It is what defines your business as a whole. It is a summary of what it was, is and will be or has the potential to be. It should be interesting enough to spark the readers’ curiosity as this is what will push them to read through the whole business proposal or plan.
It is a sales pitch for your business but one that that is suitably edited till is it perfect. It should contain an introduction, the business, its products its purpose however is to achieve a difficult sale. It should essentially persuade your reader that they should invest not only their time but their money as well.
Being a summary of the business, it should come last although it is being introduced at the start of the business plan. Any experienced entrepreneur will tell you to write the business plan first then after all is written and done, write the executive summary. By doing this you highlight the points made in the business plan and more to that, it will make your work faster and easier.
The contents of an executive summary depend mostly on its purpose. A standard business plan will vary from an investor ready business plan and also from an internal plan, operations plan, or a strategic plan.
In the case of a typical business plan, the executive summary’s first paragraph would include the name of the business and its locality and the services or products being sold as well as the purpose of the plan. Clarity is essential in this first paragraph. In the following paragraphs, it is important to highlight points which would assist in the sales of the business. Such as project sales, profits, unit sales, profitability and key point to success.
It is crucial to pin point news or information you don’t want the reader to miss. Use it to emphasize the strengths. You can also place highlights charts, graphs or bars that depict the profits and gross margin. It is also advisable to explain the figures in the text.
The summary differs slightly when it is an investment type of executive summary. This kind of business plan should be interesting and keep the prospective investor turning the pages. It should convince them to want to invest in your business. Most important of all it should clearly say that you are looking for an investment. It should specify the required amount in case of investment and the offered equity ownership offered in exchange for the investment.
When it comes to internal plans, the executive summary is not too formal. The idea in such situations is to make the purpose of the plan as clear as possible and ensure that the highlights are covered. There is no need to talk about the service or product description or the business location and things like the biography of the team since the people within the company are familiar with those details already.
Before writing an executive summary, look for examples and read through them to get the basic concept behind them. It would also be helpful to get pointers on how to make yours be exceptional.
Useful pointers to apply
Don’t make it too long
Don’t waste words on the summary. A page or two would suffice. A lot of people differ on the length of executive summary. Some say it should be up to long ten pages long enough to cover the contents of the business plan and even maybe substitute the business plan. Business plans used to be over fifty pages which then make a ten page executive summary understandable however these days’ investors expect a more concise plan. The best and most recommended length is a page which gives your reader enough information regarding your business yet lures them into reading the business plan to get more details.
The executive summary is not to be confused with a summary memo which is in fact used as a substitute for a business plan when the client is not ready to see the whole business plan yet.
Stick to the executive summary format
This is a page of writing followed by subsections which are easy to skim. They mainly highlight the essential points of the business (profit, sales, gross margin) the mission statement as well as the keys to the company success should also be included. There are some common errors made while writing the summary. They include;
1. Market size: your market is not in the $300 billion widget market so it is within reason to keep sales projections within the 1% market share of the market.
2. Attainable goals: when seeking funding it is advisable to focus on the short term goals and after that first mile stone you may proceed to attain other goals. While long term goals are welcome, it is the short term attainable goals that will enable you to acquire the funding.
3. Language barrier: a lot of people make the mistake of assuming the reader is familiar with their work and will often do thing like using acronyms and unique field specific vocabulary in the summary. This is a very common error. While writing the summary ensure you use simple English. There is nothing wrong with that.
By applying these simple pointers when writing the summary it should put you ahead of the curve and bring more business your way.