Executive summaries and this sentence you’re reading have one thing in common: they both act as a hook.
If I’m lucky, that first sentence will intrigue you enough for you to keep reading. And if an aspiring small business owner has the same luck, the person reading their executive summary will continue to review the rest of their business plan.
What is an executive summary?
An executive summary is an overview of a business plan. It highlights the important details of the business being presented and gives the reader an idea of what to expect throughout the rest of the plan.
What is included in an executive summary?
An executive summary is essentially an introduction to a business plan. It should briefly describe your business, the benefits it can provide, the market you will be targeting, and details on finances.
Executive summaries are considered to be the most important part of a business plan. It is the first section the reader is presented with, and if your executive summary is effective, they will keep reading to learn more about your business.
Often, business plans are given to groups that need convincing in terms of a business’ potential success, such as investors or potential partners. Whether or not they are hooked by your executive summary can make or break your business. Needless to say, a lot is riding on the executive summary.
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Elements of an executive summary
Without the right elements, your executive summary will be skimmed over without much thought or excitement about your business. Because it compiles all the elements of a business plan, an executive summary has the same components, it’s just more brief.
Yes, it is strange, but the introduction to the business plan also has an introduction. In this opening statement, introduce the purpose of the document and everything else that will follow. This is your chance to grab their attention.
This part is simple: describe your company. Give the name of the business, background information on founders or investors, the mission, vision, and values, location, and size. Wherever your business stands (physically and historically), explain it.
Product or service
Next, dive into your product or service. Tell readers what you are selling, the problem it solves, and the need it fulfills. Focus on the value and benefits your business will provide. This is the focal point of your business, so if the presentation of the product doesn't impress, you might lose your audience.
Then, you will briefly state the findings from your market research. Talk about how you found your customer base and how you will target them. Discuss their likes, dislikes, pains, buying habits, and demographics. Further explain how you plan on expanding that customer base and the marketing tactics you will use to do so.
The analysis also includes explaining the market opportunity for the product or service you are providing. Identify your competitors and explain how you stand out.
Organization and management
This section should summarize how you plan to organize your business in terms of leadership, as well as who those leaders are. Having solid leadership and organization in place is a good sign that investors will love.
Often, creators of business plans are distributing them to convince investors to contribute to the business’ funding. If this is the case for you, it is important that you be upfront with your funding request and put it in your executive summary. If you wait until the end and the investors don’t like the number they see, not only will they not invest, but they won’t be very happy with you either.
To back up your request for funding, provide a researched and accurate projection of how profitable your business can be. The details and methods you used to get this number can be discussed later in the business plan.
|Note: With all of these elements, it is crucial that you stress what makes your business unique, beneficial to consumers, and profitable. Keep that competitive advantage in mind and apply it back to all of these topics.
Wow. That’s a lot to remember. If you don’t want to draw up an original outline of an executive summary, we put together a great template that can work for all business types. All you have to do is print it and fill it out.
We've done the hard work for you. Download your free template here!
As you go through and write your executive summary, make sure to include anything you think is important enough to place at the forefront of your business plan, whether it is in the template or not. As long as it is relevant and organized, you will be good to go.
What is the purpose of an executive summary?
The main purpose of an executive summary is to brief the reader about everything else in the document. It should provide the main points that will be discussed in more detail later on.
The key points are summarized to make the reader interested and curious for more. Essentially, it is the first selling point of your business. When done correctly, a good executive summary will make it difficult for readers to not make it through the whole document.
While that may be the goal of the executive summary, the goal of the overall business plan, where the executive summary lives, is to convince people about the potential your business has to be profitable, succeed, and grow.
It can be easy to quickly sum up your business plan, call it an executive summary, and slap it on a piece of paper. But that might not give you the results you want. To make sure your business plan is the complete package, polishing up your executive summary and reaping the associated benefits is a good place to start.
Time to summarize
Putting effort into your executive summary will only benefit you in the long run. It provides you with the perfect opportunity to present your business and make your case as to why the readers should care. If you are stuck working on your executive summary, refer back to the provided template above.
Not a fan of the template? You could always have some professionals take care of your executive summary. Check out G2's highest rated business plan consultants.