An executive summary is a statement located at the beginning of a business plan that highlights its main points and key takeaways of your complete business plan. The information in an executive summary includes a description of your business, the “problem” your company solves, your financial and resource needs moving forward, and what, specifically, you are requesting from readers of your plan.
The name refers to the section's purpose, which is to provide a birds-eye view of the contents of the entire document. The summary works to both introduce the key points of the entire plan and to entice readers to keep reading. It also functions as a quick and easy resource section for readers in a hurry.
A well-crafted executive summary should include the following elements:
Here is our guide to crafting an executive summary of your business plan. This guide walks you through how to craft a strong one. We also cover the differences between a business and research plan and detail the components of a research summary. With this information, we think you’ll have all the information you need to write the proper executive summary of your business plan.
Regardless of whether or not you are looking for investors, a good executive summary is an essential component of any business plan. It takes the strongest information from the various sections of your business plan, and compiles them in a compelling summary. For those seeking investment, potential investors will read this summary to decide whether or not to read the rest of your plan, which will ultimately decide whether or not they choose to invest in your business. Poorly written summaries can discourage potential investors from even reading the remainder of your plan. Your executive summary, in other words, is a written form of your business’ “elevator pitch.”
Even if you are not seeking investors, a strong executive summary can serve as a distillation of your company’s goals and principles that you and your team can return to as needed. The summary can help your company develop and provide a ‘jumping off point’ for future business plans. It can also serve as a course for business summaries, websites, marketing campaigns, etc.
While there are many ways to craft a summary, strong summaries typically have the following characteristics:
If you are writing a summary for a research paper or report, you’ll need to use a modified executive summary formula. A research summary should include:
You will need an effective executive summary if you are applying for a bank loan. You will need to tailor your summary differently than you would anyone else, as banks generally have different requirements than a private investor. Contrary to popular belief, bankers never take risks with the bank's money, as a private investor may risk theirs. According to bank law (with one exception), bankers may not lend money to businesses that do not have enough assets to cover their loan and then some. Bankers view many executive summaries, and to grab and keep their attention, your executive summary must include all of the major points, plus the points listed below:
Although they are typically not very long, executive summaries are probably the most important component of your business plan. Hopefully, this guide has provided you with all of the information and guidance you need to write a strong plan that will entice investors to read the rest of your plan and ultimately fund your business.
Our team at FormSwift wanted to determine the best and worst states to pitch a startup idea to investors. We did this by creating a ranking based on a total score that we calculated by evenly weighing the following factors that contribute to a strong pitching environment: Rate of new entrepreneurs, opportunity share, percentage of entrepreneurs employed before starting their new business, startup density, number of venture capital deals made (in 2015), amount of venture startup money given out per capita, and business survival rate.
The top 5 states for pitching your startup to investors are Massachusetts, California, New York, Utah, and Washington.
The bottom 5 states for pitching your startup to investors are Wyoming, Hawaii, West Virginia, Mississippi, and Alaska.