How to Write the Executive Summary of Your Business
This article will focus on how to write an executive summary of a business plan.
The executive summary, a short and concise summary of the business plan, belongs at the beginning of your business plan. Particularly because, capital providers, such as banks or investors, often only read the executive summary and then decide whether they want to dig deeper into the business plan. The summary should only be written after the business plan has been completed.
It is more advisable to contract the composing of the executive summary to an experienced writer in this field if you want to succinctly convince investors with your summary. But if you intend to do it your own way, this article is your best guide.
In the executive summary, you present the most important points of your business plan on a maximum of two pages. The executive summary is therefore the summary of your business plan and should arouse interest as well as curiosity. The executive summary is particularly important for potential investors and banks, as it enables a good overview of your business model in a short time.
The executive summary is very often referred to as a management summary, as it contains the most important points of a business plan from a management perspective. However, it is not an introduction to the business plan but rather the summary of your business plan. For this reason, it is recommended that you compose the executive summary only after the business plan has been completed.
Executive summary as a business card
The executive summary gives your contact person the first decisive impression. If the executive summary is convincing, the reader usually decides to read through the business plan. consequently, the executive summary is very important.
What should be in an executive summary?
There are some points that must be included in the executive summary. However, all this information is part of the business plan that you should write before the executive summary – because the executive summary is only the summary. You must put the following information together seeing as they are of utmost interest to the investors.
1. The background to the business idea
Which problem of your potential customers do you want to solve?
What is your product or service idea?
An example: Drivers are always annoyed about the time lost in traffic jams. If this time could be used productively, that would be a significant gain.
2. The vision / mission statement
Tell them the solutions to the earlier raised problems.
3. Product or service
Briefly introduce your product and services and explain who your customers are and what the customer stands to benefit and where it lies, in an average of one to two paragraphs.
Record why the market is attractive and which important characteristics the industry has, in approximately one to four paragraphs.
5. Manufacturing / production planning
Here you show that you are further only to a product idea. You know how to make the thing, where and under what conditions.
Finances- the finance plan is of keen interest to investors, so show the financial development of the next 3 years and mention the most important key figures. Do not forget to indicate how high the capital requirements for your business start-up are in not more than two paragraphs.
The founding team is one of the key factors in the executive summary. A convincing business plan can only be put into practice with a strong team of founders. In this regard, you should particularly emphasize the specialist, commercial and operational skills and experience of your founding team, in maximum of four paragraphs.
7. Your audience
The executive summary gives you the opportunity to review and highlight the most important points of your business plan, in this regard you write the executive summary for yourself. However, it is far more important for potential investors because the executive summary is usually the first document that is required and read by potential investors. If the project is then judged to be promising based on the executive summary, the business plan is critically examined and then the first meeting usually takes place.
8. Your unique selling points
Here you display all your cards. Tell them what makes you special, what will distinguish your product and how you will find your way into the market with it.
9. Marketing planning
Proof your professionalism by enunciating what is right for you and note that the most important thing here are not individual actions but a plan. You don’t have to reinvent the wheel, just prove that you know its function and use it optimally.
10. The workforce planning
Remain realistic in telling them how you are going to achieve your goal and show that you have carefully considered the expenses of personnel costs.
11. Risks and opportunities
All risks and opportunities summarized as briefly and clearly as possible and describe the risk strategy in one sentence. Brevity but also conciseness is important here.
What to do
Since the requirements for a highly concentrated summary of the business plan are high, you should consider the following points:
a. Page length
Should not exceed two pages. Since venture capital companies, for example, receive inquiries about financing every day, you should make sure that you keep your summary of the business plan short. On no more than two pages you should try to arouse the interest of the potential investor.
b. No technical jargon
Write your summary in such a way that a person with no knowledge of the subject will understand it. Your contacts on the investor side are usually not specialists, so special technical terms are not helpful. Also, make sure that you avoid lengthy and ambiguous wording.
c. Realistic Assessment
Be realistic when formulating your summary. Sentences like “infinite potential” and “massive increase in profit” seem unprofessional. End the executive summary with a positive outlook.
d. Position in the business plan
Although the executive summary is written after the business plan has been drawn up, the summary is still at the top of the finished business plan. The goal is for you to formulate a short, concise executive summary that convinces investors and makes them want to read the business plan.
e. Test the executive summary
As with any important presentation, you should test the executive summary. This is how you see mistakes and inconsistencies. Gather a group of people whom you trust and who has different professional backgrounds.
Do a mock presentation: Pretend the person(s) is (are) a possible sponsor for your project who does not know you. Give yourself two minutes to explain the essentials to the person. With the aim of presenting so much in two minutes that this person would then want to support you as an investor.
f. Improve and redesign the executive summary
Go over the feedback from your mock presentation and incorporate the findings into your executive summary. A thorough job will be more convincing. It is also expedient to consider the structure and the best possible readability, get creative.
A display of the individual points in subtle colored boxes often ensures a good overview and clearly separates the areas from one another. Play with your own ideas on how you could improve the structure graphically.