The Executive Summary: the heart of your Business Plan!
The executive Summary of your Business Plan is the document you will be required to show to your investors so that they may decide whether or not to invest their money in your business.
As you see, this is a fundamental step in the growth process of your company, as this will be your cover letter to those who have the money. The executive summary of your company should be brief, and contain the most important aspects of your project. Keep in mind that we want investors to become interested in it, not bored by it. The executive summary comes before the Business Plan introduction, and sometimes it is the only thing investors read (they are all very busy or perhaps there are many other people who are asking them to read their executive summaries as well). The main goal of the executive summary is to foster the reader’s interest in the project, so that he feels like following through with the whole presentation after reading all the summary. You may think this is a truism, but the summary should be well-written and easy to understand. This should be taken for granted, that’s for sure, but still this is something important to consider.
The structure of the executive summary
Several aspects should be included in the executive summary of your business. They are described below. These are not fixed rules, but they will help you structure all the information in the proper way:
• In order to improve the presentation of the executive summary, I would recommend you to write it on a single sheet of paper (at the most). If you see this is impossible to achieve and you know you will need to write more than that, try not to make it a text-only document, add some different content. If you know you can’t make it short, you may add images and charts to make it less hard-going.
• The executive summary should include your goals for the project and mention all the people that are involved in the project.
• Try to introduce your project in the most simple, straightforward manner. The commercial need for your product/service plays a pivotal role in the executive summary.
• Competitive advantage is something that should be clearly stated in your executive summary. Explain why your product/service is better. Make it clear enough, don’t make room for any doubts or for unexplained factors that may create doubts. You will also need to specify the value that your proposal will provide to the final customer. Therefore, you will need to demonstrate that the final consumer will be willing to buy your product/service.
• The executive summary should also specify the current state of the project. For instance, whether the final product is already manufactured (in case you want to sell a product you create), or else if the first product units to be in the market are ready, in case this is a sales business. Another important aspect to be taken into account is intellectual property. The section on intellectual property should include any patents or trademark registration involved in the development and commercialization of a product/service.
• You will also need to provide information on the market you want to break into. Its size, its growth rate… And above all, what your market opportunities are in it.
• Any mention of the project in mass media should also be included in the executive summary (TV, radio, press clips…).
• Without doubt, you should provide a summary of the goals of the company, where both the final goal and the intermediate steps to reach this final goal are specified. It would be advisable to tell apart short-term business goals from long-term business goals.
• Specify the investors you already have, and the company section they are currently funding. If you don’t have any yet, explain the return on investment offered to new investors.
Put your own executive summary to the test
First of all, you may show it to a friend or a relative, and ask them to tell you what they think of it. The feedback obtained by doing so won’t be professional or accurate, but it may help you find out minor mistakes in spelling, in the structure of the text or even in the presentation.
Once they have read the project, ask them to briefly explain what they found was the take-home message. That is to say, which were the ideas they still remember about it. This will make it possible for you to see whether you are making yourself clear enough when it comes to the relevant factors in your company.
Once you have taken the first step, you may take one step forward and browse through your contacts in order to find whether you know a CEO or freelance professional. Great for you if you do, because you may show it to him/her after doing all the changes and ask him/her to give you his/her opinion about it. In this step you will be able to determine what your presentation feels like from another professional’s point of view. Sometimes, given that you are explaining your own project, you may not be as objective as you should be, and getting an objective point of view from another professional may be helpful.
The last step would involve testing your executive summary with a member of an investor community, or with a single investor. If you are lucky enough to know any, show him/her your executive summary. This person will tell you what it lacks to talk somebody in his/her position into your project. It is important for the executive summary to make the investor feel driven to devoting some of his/her funds to the project. “Quite good” is never good enough when it comes to your executive summary. It must be outstanding. Otherwise, it will be very difficult for you to obtain funds.
Some advice to structure your executive summary
From a theoretical point of view, your executive summary should be a written report. Nevertheless, this is not attractive, and sometimes it may even become quite boring. In order to avoid this drawback, I advise you to structure your executive summary in paragraphs that are no longer than 7 lines. Always use simple, clear language. For instance, you could follow the guidelines listed below:
• Divide the executive summary in 4-6 sections. In order to make it more appealing, you may give a title to every section, so that the reader may know what the section is about even before reading.
• Questions and answers: It would be a good idea to provide answers for several questions that may arise. By doing so, you show you have your project under control, as you keep solving all the questions the prospective investor may come up with.
• Add several charts: adding small charts to each section may help you structure your executive summary in a more visually-appealing manner.
As I do with all my articles, I would like to encourage you to join the discussion and leave your comments or opinion.
• Expr.: Electronic certificate
• Expr.: Obligation
• Expr.: Company