A business plan is a written document that you draft outlining the goals of your firm and your strategy for achieving them. Key aspects like marketing and management are found in every business strategy. An executive summary, which is a one- to two-page explanation of each plan part, should also be included. This article will assist you in writing a persuasive executive summary for your business plan.
What is an Executive Summary?
An executive summary is a section that provides readers with a synopsis of your full strategy as well as the company’s potential. It describes the nature of the business the company runs and enumerates the salient details and growth-promoting tactics.
When a business plan is submitted for funding options, the executive summary gives potential investors or lenders a fast overview that helps them decide whether to proceed with reading the full proposal or not.
Your comprehensive business plan is condensed into a succinct executive summary. To capture the reader’s interest and persuade them to continue reading, you need to keep it brief and straightforward.
Why Is an Executive Summary Necessary?
An executive summary from an effective business plan writing is a thorough document that takes time to read, as was already said. By giving the reader a succinct, engaging synopsis of your plan up front, you may save them time and let them know which sections of the document should be carefully read. This makes it more likely that someone will read your business plan and comprehend your concept. This is the reason an effective executive summary is necessary.
How long should an executive summary be?
The length of your business plan and the level of comprehension required by the reader to completely understand your request will determine how long your executive summary should be. These summaries have no prescribed length.
That being said, it should be as brief and unambiguous as feasible. Generally speaking, an executive summary should be one to two pages long.
By adjusting the font size and margin, you can change the length to some extent, but keep in mind that readability is just as important as length. An easy-to-read font size and plenty of white space are essential components of every executive summary. If your executive summary is hard to read, your reader will be less likely to read your business plan.
Essential Components of an Executive Summary
The executive summary of your business strategy should contain the following essential components:
- The business opportunity or problem statement
Typically, your company operates to fill a void or address an issue in the market. Your issue statement is what you need to put in the summary since investors want to know if the world needs the goods and/or services that your firm offers.
- Your company concept
The reader would then want to hear how you intend to tackle and resolve the issue. This is your business plan, and it must to succinctly explain how your good or service may assist in resolving the issue.
- Company background
The most accurate indicator of future success is past performance. Reading about your company’s history can help the reader understand how your business has grown and developed over time, as well as the achievements you have made. Even startups have typically reached milestones like deciding on a name for their business, coming up with items, locating a site, etc.
- Industry
Describe the industry you work in, its size, and whether any trends are having a good or negative impact on it. This helps readers understand how big of an opportunity you are going after.
- The target market or customer
Every company has a target market or consumer base that they aim to focus on. The consumer types you target, together with their psychographic and demographic profiles, are described in depth here.
- Rivalries
When you enter a market or an industry, you typically have competition from other participants. Understanding your competitors and conducting market research is essential for success. The people who are reading your strategy are interested in learning about your competitors’ names, advantages over them, and areas where you will excel. An executive summary in business plans must include a discussion of the competitive landscape.
- Benchmarks
You should outline your roadmap for important future milestones or points in addition to showcasing the key milestones your business has already attained. Add the dates you want to introduce items, hit sales targets, appoint important personnel, etc.
- Financial plan
Banks and investors will want to know how you plan to use their money if you are asking for investment. Included in the summary should be a succinct financial overview that covers the essential details of how and where you intend to use the money. You want to include a history or synopsis of previous financial performance for companies that are already in operation. Last, but not least, all businesses must submit future financial projections for startups so lenders and investors may assess your ability to repay debts and whether or not they might receive a sufficient return on their investment.
- The Management Team
You will introduce the important players on your team in this part. Your company’s success or failure is primarily determined by the individuals who work there. It follows that any reader would want to know how capable your team is. In the executive summary, highlight important employees and the qualifications and experience they offer.
Writing a persuasive executive summary
Since it is the first thing lenders, investors, and/or other readers will see in your business plan, your executive summary should be considered the most crucial section. You’ll lose them for good if they’re not impressed. When writing your executive summary, adhere to these guidelines to maximize your chances of success.
- Complete the rest of your business plan
Highlights from every component of your business plan are included in your executive summary. You must therefore compose those portions first. Next, go over each section and determine which details need to be included in the executive summary. For example, an exciting statistic and potential that should be included in your executive summary is if your market analysis section states that your industry is currently valued at $100 billion and is expected to increase by 90% annually over the next five years.
- Provide a succinct, one- to two-line synopsis of your business.
An overview of your business should be the first section of your executive summary. Readers must be able to quickly and easily comprehend what your business does for them to decide whether or not they are interested in the opportunity. If you can’t immediately make your work understandable to readers, you won’t be able to engage them with your business and they’ll stop reading.
- Create your executive summary structure
Make headings for each part of your business plan first. You ought to have a headline for your marketing strategy, your consumer study, etc. Next, highlight the key points you made in each of the section’s headers. For instance, you would list your top three promotional strategies under your marketing plan. You would produce a thorough one- to two-line description of your target customer under customer analysis. Next, decide how to structure your executive summary. You have two options: either leave the headers alone or make new headers like “business overview” and “unique success factors,” chopping and pasting the previous sections where necessary.
- Make it shorter
“If I had more time, I would have written a shorter letter,” said Mark Twain once. Your executive summary will be more successful if it is more succinct. Go over your executive summary and make drastic edits to make sure you get your main points out in the fewest possible words.
- Invite other readers
Get your executive summary read by at least five individuals. Request that they do this for no longer than five minutes. Next, probe them about it with questions. Did they know what your business does? Can they repeat the value proposition of your organization back to you? You should continue working on it if your executive summary fails to captivate and enthrall the audience.
How to Write an Excellent Executive Summary: Dos and Don’ts
When drafting an executive summary, certain common errors are made. Writing a faultless executive summary for your business plan is not hard if these little errors can be avoided. Here are some crucial pointers and advice for you to keep in mind.
- Use a positive and confident tone
The reader’s perception of any document is greatly influenced by the language and tone you choose to use when writing it. The executive summary needs to persuade the reader that your plan will succeed, thus you need to use powerful, direct language. For example, use the word “will” in place of words like “might” or “could.” Don’t let your poor writing style or language cause the readers to question your abilities.
- Don’t give away everything in the summary
We frequently commit the error of providing excessive background information or specifics in the synopsis. Specifics belong in the complete business plan. Avoid giving away too much in the summary itself; the purpose of your executive summary is to point readers toward the comprehensive strategy.
- Make sure everything is covered
The executive summary needs to address the key queries that your business strategy poses and attempts to address. “What is the definition of the business you are in?” “What is the size and need of the market?” and “How is the company uniquely qualified to succeed in that market?” are the three most crucial questions.
- Reduce complexity
Define your company such that it fits into a brief executive summary. You must be able to define this using just one or two phrases and simple terminology. The executive summary is not the place to discuss extraneous aspects of the company that go outside its core competencies or become future possible avenues you may pursue. Produce
- Make sure the logic flows
Both the executive summary and the plan as a whole support this. It should be clear and unequivocal why your particular team and resources are appropriate for the particular market opportunity you have identified, as well as why you have selected the marketing strategies you have. Readers won’t stick around to find the solution to that issue in the plan’s body if there is a logical leap, such as when it is unclear how the management team’s experience is appropriate for the business in question. Instead, they will go on to another plan. Even in the executive summary, this reasoning should be evident while being condensed and reduced.
- Make sure your summary’s content aligns with your business plan.
Your executive summary and your complete business strategy should contain identical content. Verify if the two are in agreement with one another.
- Don’t rewrite anything in the executive summary.
There isn’t nearly enough room in your executive summary for everything you should. Content that is repeated takes up valuable space.
An overview of creating a strong executive summary
Your executive summary is the first thing a potential customer sees when forming an opinion about your company, regardless of size. The quality of your executive summary will determine whether or not they choose to read your entire business plan. We hope that this executive summary guide will assist you in creating a compelling and successful executive summary. Readers will be more inclined to read your entire plan, ask to meet with you in person, and provide you with funds to pursue your company goals if you do this.