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:
Who you are and what you are offering.
What product/service you offer and what the adjoining benefits.
Include your business’ name, where your business is located, and where it was established.
Make sure it's compelling. Remember, this is the first thing the reader encounters, so grab their attention.
What is the problem your company solves?
What is the value of your products/services to the customer?
What is the market and growth opportunity?
Why now? Here you need to address why investors should invest now and why the timing is appropriate.
Who is your customer? Be sure to include data about the total size of the market and the opportunity within it.
What is your unique selling proposition?
What separates you from your competition? What is your competitive advantage?
How innovative and unique is your business idea?
How does your business “solve” the problem you identify?
What products/services do you offer?
What is your business model?
Be sure to detail how you will take your product to market and generate revenue (for the business and for the investors)?
Make sure your business model is sustainable and set up for long-term growth. It should do/explain the following:
Provide value to select customers through addressing a problem with a value proposition or unique selling position.
Price point (and proof it's competitive based on market research)
Proof of net profit gains (be sure to show expenses)
Opportunities for lead generation through marketing (and consistent lead acquisition over months)
Evidence of customer satisfaction and retention
Key metrics and performance indicators
Proof of Solution: Why is your team the right fit for this endeavor? What financial proof or projections do you have to prove it?
Financial Projections: you should summarize your financial plan for the next three to five years, including specific values and metrics like:
What are the financing requirements and profitability?
What are the risk analysis and mitigation measures?
Include evidence of your management team’s competencies
Include the professional background of you and your team
Remember: investors invest in the team behind the startup, not just the startup’s idea.
What has your company already accomplished? For example, revenue increase, awards, recognition, lead generation, increased market share, etc.
What do you need from readers (capital, advising, etc.)?
If it’s investment:
How much money do you need and how are you going to spend it? Investors want to know immediately if your startup’s financial plan falls within in their normal funding range. How you allocate funds makes a huge difference depending on risk.
Exit strategy: You do not have to provide all of the details, but briefly summarize how and when investors will receive their return.
Be sure to consider all elements of your company that should appeal to investors.
If it’s a bank loan:
Bankers need to see the net worth of business owners
Be transparent regarding your financial history and bankable assets
Provide evidence of economic stability and financial longevity
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:
An executive summary should be concise. This means no more than two pages (ideally a single page). A common formula for an executive summary is 5%-10% of the length of the entire plan.
Style and language guidelines:
Avoid jargon and overly technical language
Use an active voice and active verbs
Avoid generalizations or assumptions about your reader. For example, avoid phrases like “It is well known that…”
Use the present tense whenever possible
Numbers: Round numbers off wherever possible to make them easier to understand. You should also use charts or graphs to simplify the data to make it easier to comprehend.
Don’t spend too much time on the history of the company. You will cover this later in the plan, so keep your company’s history short.
Write the summary after completing the rest of the business plan. Doing so will make the section easier to write and ensure you include all relevant information.
Capture the reader's attention: this is your chance to grab your reader’s attention. Make sure you demonstrate a clear path to success and support your claims with facts. The summary should appeal personally to the audience and should be adjusted based on the interests of the audience.
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:
A section that discusses the background and history of the research, including:
What was the impetus for the research?
Did you partner with universities, agencies, organizations to gather research?
Is this project novel?
Who were the primary team members?
Is this research part of a greater (national) research program?
Market research process
How did you conduct the research (briefly)?
How long did the research take place?
Was this process compatible with other research?
What findings do you want to highlight?
How did you collect the research data?
Where was it collected (include all methods--online, offline, etc.)
Briefly mention collection techniques (surveys, testing, etc.)
Be sure to frame this in a manner that generates interest in how you arrived at these findings.
Demonstrate the benefits of the research and outline the associated costs of completion (and possible savings of the outcome)?
Benefits to the customer, before and after comparison, costs, investment, productivity and how you will quantify the results.
Communication: How and where will the research results be distributed or published?
Solution: What issue does this research solve?
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:
Your personal net worth
Whether you have a small business or a large company, bankers like to see the personal net worth of business owners. This not only gives them an idea if you can pay back their loan but also shows your financial management.
Transparent financial history and bankable assets
While investors may be interested in potential growth, bankers like to see your financial history to gain insight on how you’ll manage the funds they loan you.
Evidence of potential stability and longevity
Bankers like to see stability, as it ensures they’ll be paid back.
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.