If you’re concerned with how to write an executive summary for your business plan, you’re probably an entrepreneur looking to secure funding for your small business. After all, without some sort of seed money, you won’t get very far.
One key document you’ll need—and be asked by investors to produce—is a business plan. In general, a business plan is a blueprint that outlines every aspect of your business: your mission, your target audience, your product or service, market research on your area, and your financial projections. Once a potential investor reads your business plan, he or she should have a good sense of not only you and your drive, but the direction of your business and whether it is set up to succeed.
That’s a lot of weight to put on one document, but business plans are almost universally recognized as that important. And one of the most important portions of any business plan is its executive summary.
What Is an Executive Summary?
An executive summary is normally at the beginning of the business plan and clearly outlines the following:
- Your Mission Statement.
- Company Information. Include the business owners’ names, when it was formed, number of employees (if any) and location(s).
- Growth Highlights. Detail any instances of growth and, if possible, illustrate that growth with graphs or charts. The more detailed you can be in regards to an increase in revenue or market share, the better.
- Description of Your Products and Services. These should be brief, because you’ll go into more detail on your products and services later in the plan.
- Financial Information. This is especially important if you are seeking financing. You’ll need to list any information about your current financing, including your banks and investors.
- Summary of Future Plans. This doesn’t have to be too detailed, but you should give anyone reading your plan an idea of where your business is heading and how you intend to get there.
How Is an Executive Summary Written?
Your executive summary’s tone and content will depend greatly on who you intend to read it. If you plan to approach banking institutions for loans, your summary should be a bit more formal. You won’t want to take too light of a tone when describing your business or future plans, as it may be construed as cavalier.
If you are planning to present your business plan to angel investors or other individual investors, your plan might benefit from a more conversational or familiar tone. But remember, you are asking these people for money—a lot of money. You should treat that request with the respect it deserves. Your summary’s tone should be upbeat and positive, but not so rosy that your goals appear unrealistic.
Executive summaries should typically not be any longer than one or two pages, especially if you include charts or graphs. You can include bulleted lists, but be sure to provide some level of detail for most sections.
Where to Begin When Writing Your Executive Summary
You’ve probably heard of an elevator pitch: the one to three minute version of your company plan and mission that is meant to intrigue investors or customers enough to want to know more. Think of your executive summary as the most perfected elevator pitch ever. It’s the pitch you’ve had time to hone and whittle down to the most salient points while having a little more room to breathe.
If writing is really an uncomfortable task for you, you might consider outsourcing the writing of your business plan to a firm or freelancer, or consider taking a class on how to write one.
Here’s the biggest tip for writing an executive summary: write it only after you’ve written the rest of your plan. This way, you’ll have the benefit of knowing what exactly you should include when writing it. You’ve already done the research, so use that when pulling together the salient points for the executive summary. If you feel that you need to write the executive summary first in order to focus your thoughts, that’s fine too, just be sure to revisit it before declaring it final. It may evolve.
After You’ve Written Your Summary
Lastly, you have to check, double-check and triple-check your executive summary, and the entire business plan, for any errors. Grammatical and spelling errors should be eradicated. But more importantly, your financial projections should contain absolutely no errors. Just one slight financial error will make you an amateur to any savvy investor.
If you don’t trust your own eyes—and truthfully, you’re probably too close to the document to be totally objective—ask someone you trust to read it through. Ask a few people; your business plan and executive summary should be absolutely pristine when you present it to potential investors and financiers. It makes a difference.
If you’re truly stuck when trying to start your executive summary, first, ask this question: why did you want to start your own business in the first place? Or even better: why is it so important to you to offer your product or service to others? That will hopefully spark a thought that you can build off of.
Don’t be afraid to let your passion or excitement for your business come through in your executive summary. Investors are looking for entrepreneurs that are committed to their business and have a clear focus, so capitalize on your commitment to get the backing you need.
To learn more about how to get the funding you need for your business, continue to our next article to see the best ways to get noticed by investors.