While writing a business plan for outsiders, you must write an executive summary and keep it to the beginning of your detailed plan. Executive summary is the overview section of a business plan which summarize the key points for readers to save time. It’s usually the first thing your readers read.
Business plan is the most important document that you provide to bankers, lenders, financial institutions, large creditors or potential investors to raise capital.
Generally, bankers and investors wants to read the executive summary first before getting into the detailed business plan. Therefore, a good summary is the key to having it reviewed by investors or bankers.
In our last article, we have discussed why to write a business plan. In this article, we will discuss the most important part of it known as “executive summary”.
Executive summary section should be written after writing everything else. We advise you to keep the executive summary section short and simple. A page or two will be enough to summarize the whole thing.
Please note, not all business plans require a summaries section in it.
Executive summary is required when you write to convince banks, venture capitalists, angel investors and for any outsiders to invest in your business by providing capital. Executive summary should have following things:
- Trade name, location, legal structure and contact details
- Describe the business opportunity of your product and/or services you offer.
- Explain why you think there is a opportunity in it and what problem your business will solve. How does it fit into the marketplace.
- What separates you from the competitions.
- Which market you are targeting and what is your marketing and sales strategy.
- Describe your competition and what is your strategy to get market share.
- Describe your ideal customers.
- How you want fund to be invested. Do you want equity investments or bank loan.
- Educational background of promoters, award and recognition received, if any.
- Net worth of the owners.
- Summarize the financial plan for at least 5 years.
- Percentage of ownership you are offering in exchange for the fund you are requesting and how the ownership will be divided?
As per the banking law, a bank can’t offer you loan if your business will not have sufficient assets to cover it. However, you can look for venture capitalists and Angeles for funding.
Venture capitalists and angel investors are high risk takers. If your business plan sounds good to them, then they can fund your startup. To persuade, venture capitalists and angel investors, you should write executive summary section preferably with analysis of the market and how you are going to generate money out of it.
Your executive summary section must be short, simple, clear and concise. It should capture readers attention to read the whole business plan.
Your main motto should be to quickly convince the reader by keeping the best aspects of every part of your plan. You can summarize following sections in executive summary to explain the whole business plan:
- Company and Management
- Market opportunities
- Organization description
- Product line
- Marketing and sales plan
- Competitive advantages
- Funding request and use
- Financial projections