In this blog post, we are providing you with a guide on how to write an executive summary of your business plan. One that will hopefully help you gain easier investment. Writing your business plan for your target audience is always a good place to start but also remember that reading it needs to be simple. Bullet points and key points throughout will give you a competitive advantage as the investor will need less time to reading about products or services instead of reading the rest of your business plan. Don’t make your pages long when you write and remember your executive summary is an application for investment or a business loan and needs to include:
- A Summary of a Business Products or Services
- The Problem
- Concise Financial Projections
- Target Market
- Competitive Advantage
- Your ASK (How much investment you’re looking for)
Importance of a Business Plan
Companies that use business plans grow up to 30% faster than companies that don’t. So, whether you are using one to land that initial investment or to map out the strategy for your company’s growth, to write a great business plan is to take a big step in helping you succeed.
We’ve decided to write a separate post, just on how to write an executive summary of a business plan, as this is the most vital component to whether your plan gets a look in from investors or not.
Our entrepreneurs here at Alacrity get taught first-hand about the construct of a business plan and what needs to be included to convince investors. This is because our 15-month course concludes in an investment round!
FIND OUT MORE ABOUT OUR 15-MONTH PAID ENTREPRENEURSHIP COURSE THAT TAKES GRADUATES, BUILDS TEAMS AND THEN INVESTS IN THE NEW COMPANIES >
What is an Executive Summary?
Your executive summary is like is a trailer to a movie. The whole film won’t be shown here, but certainly the best bits to make prospective investors want to see more. Your ‘trailer’ must effectively summarise all the important information throughout your business plan in a persuasive manner. The investor should be able to read the executive summary and easily summarise your business plan.
The Importance of an Executive Summary
As we’ve mentioned, the executive summary is the first place investors will look to decide if it’s worth their time reading more of the business plan. So it’s imperative you catch their attention and make sell your proposal as an exciting opportunity to invest in.
Many investors just won’t have the time to read the entire business plan, so will instead use the executive summary as a key insight into deciding whether to make time to read the plan fully. Make sure your executive summary grabs their attention.
How to Write an Executive Summary of a Business Plan
You now realise the importance of an executive summary, but how do you go about writing and deciding which important information needs to be included?
Ask yourself, what is it that will capture the attention of your readers? What information will be important for them to know and how will you address these points right off the bat?
A great exercise to do is to picture yourself coming into a large injection of cash, perhaps from an inheritance. (which is already an emotional thing) A relative stranger comes to you with 1-2 page document asking you to give up that money now for the promise of giving you even more later. How good would those 2 pages need to be? Would your own business plan pass that test? If not, why are you asking someone else to part with their cash?
Usually, you will cover each of the topics throughout your business plan in a short and condensed way. These should include:
- Business overview and mission statement
- Business model
- Target buyers
- Market environment
- Capital requirements
- Use of funds
- Your specialist team
The Layout of the Executive Summary
While you want your executive summary to contain all the important bits of information, you also have to present it in an exciting way. That’s what makes learning how to write an executive summary of a business plan, possibly one of the hardest and most important sections of the business plan. Anyone can waffle on with pages of information, condensing it is far harder. One of the exercises we do at Alacrity is to get the companies to condense what they do in the form and length of a tweet; it consistently proves far more difficult then it sounds.
We’ve helped support and design our fair share of business plans here at WCIC tech- which, might we add have all received investment! So we know a good business plan when we see one.
While they are all unique in their different ways, we’ve noticed you can’t go wrong with the following suggested layout for the executive summary. Typically, this order falls in line with the same order in the full business report, but instead, these are condensed neatly for the executive summary.
1. Company description (Business overview and mission statement)
One way to turn heads is to deliver your company description in an interesting way.
This could be your company journey thus far in your industry, with the new opportunities presented in front of you. Or even your expert team and how you are the right people to invest in with specialist experiences, skills and motivation.
2. The Problem
When highlighting the problem in your market, be sure to include evidence and references to back up your findings. Investors will be looking for accuracy and reliability into the information your providing. Always include references and links to evidence whenever possible. Investors need proof to see that the problem you’re highlighting in your market.
3. Solution (Your ‘secret sauce’)
This is your moment to shine and really demonstrate to investors that you have an exciting opportunity that really is unique in the market at solving the problem.
Be sure to include how you differ from the competition already in the market and how you see off any new entrants to the market.
4. Why now
You want to create a sense of urgency and a feeling of needing to act NOW. If your investor feels this opportunity is here to stay around, there will be no fire lit to commit them to invest.
However, an opportunity presented that it’s too good to miss, can persuade investors to act quickly.
5. Financial summary
Don’t forget to include the really important financials in the executive summary. The investors will want to be able to know what capital you’re asking for and the expected return on investment at a quick glance. They will want to see an easy snapshot of the growth potential.
This is your opportunity to showcase what it is that you want from the investors and how you’ll deliver in return. Clearly state what you’re asking for here in the executive summary. Remember to keep it short. Don’t waffle on in unnecessary detail. Your investors will have little time so will require the details of your business plan in a short time as possible.
Remember you’ll have dedicated sections to expand on each of the headings throughout the business plan.
Loosely, your executive summary will showcase where you are today, and where you’re heading once you’ve secured investment. Your points need to be compelling but concise. Generally speaking, less is more, hitting key points quickly and effectively matters.
How Long Should the Executive Summary Be?
The key to remember is the executive summary is a snapshot of the business plan. Therefore, it should be no more than 2 pages long. You need to have concise writing that’s easy to pick out pieces of information from.
You want investors to know what they’re getting with a glance. Once their interest is peaked they can discover the critical details further on in the business plan.
Extra Tips for How to Write the Executive Summary for a Business Plan
We have covered enough detail in this post to get you well on your way to producing a persuasive and compelling executive summary, but here are a few extra tips to help you on your way.
Complete the executive summary last
Even though the executive summary will be the first page looked at in your business plan, it’s far easier to write, or complete last. You’ll have an idea as you go along writing, but you will need to revisit this section many times to update it and get it correct. You already will have all the financials and other details completed for other sections in your plan, so you’re really drawing up a conclusion on all your compiled information.
Use positive and strong language
Using strong language gives investors certainty. Instead of writing ‘we hope’ or ‘we’d like’ you should say ‘we will’. Write with confidence and provide that surety that you are the right team for this opportunity.
Write for your intended audience
As you write and read of your executive summary, imagine you’re the investor. Would you like to invest in this opportunity and company? Does this 1-2-page snippet of a business plan make you feel excited and want to read more? If not, keep working at it.
Space out your text
You want investors to be able to see what’s on the page easily, and it needs to look attractive.
If your executive summary is an entire two pages of condensed tiny text, then you’ll put off your reader in an instant.
Make the summary attractive, use images where possible to break up the text. Use clear headings and short paragraphs.
Draw attention to your end-goal
Your investors should easily conclude what it is they’re investing in, and where the company is going in the next few years. This should be presented as an opportunity not to miss, with great potential for the future of the company.
Good luck on your executive summary, and if you need more information on writing a business plan, check out our last post here.