Whether starting a business or transforming one, it’s important to have a written business plan. A business plan should start with an executive summary that briefly describes the business’s products or services, its market and competition, and its management. The executive summary can make or break a business’s pursuit of investors.
Although it’s the first document in the plan, the executive summary should be prepared last—it covers the whole plan in concise form, so it can’t be drafted until all of the other elements of the plan have been developed.
Here’s what you should know about writing an executive summary:
Make sure to include key elements. Here’s a checklist of the essential elements of an executive summary:
__ Provide a very brief description of the company’s history.
__ Briefly state the company’s objectives.
__ Provide a brief description of the company’s products and services.
__ Identify the market in which the company will compete, including a persuasive statement identifying the company’s competitive advantage.
__ Provide a brief description of the key management team.
__ Describe the projected growth of the company and its market.
__ Provide a brief description of funding requirements, including a timeline and how the funds will be used.
Highlight the company’s prospects. The executive summary shouldn’t just describe the key elements of the plan, it should also show how these elements indicate that the company will be a success. For example, the description of the management team should briefly note how the team will help the company achieve success; this can sometimes be done with a brief mention of other successful business ventures in which the business founders have been involved. But in your predictions of success, stay rational and reasonable. Ensure that the summary of financial information is realistic and includes projections covering at least two or three years.
Be interesting. Investors see thousands of business plans every year and often read no further than the executive summary. So the executive summary must capture the investor’s interest and entice him or her to read on and learn more about the opportunity presented. Keep it short—the summary shouldn’t be longer than a couple of pages or so.
Once you’ve written a strong executive summary, it can be sent on its own to people you may not end up sending the whole plan to. If it’s carefully prepared, the executive summary can be distributed without compromising the confidentiality of the plan. Distributing only the executive summary is efficient when the entire business plan is lengthy, cumbersome to read online, and costly to duplicate and mail.
For practical advice on preparing a business plan, including the executive summary, turn to CEB’s Financing and Protecting California Businesses, chap 2.
Other CEBblog™ posts you may find useful:
- Using a Retirement Plan to Start a Business
- Just Passing Through: New Deduction for Business Income Expires in 2026
- 10 Ways to Finance a Business
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