When writing a business plan, readers will first see the executive summary. If your plan is being used to go after funding, it’s crucial to carefully craft the executive summary to capture the reader’s attention. How do you write an excellent executive summary? Read further to find out!
What is an executive summary?
The executive summary is essentially the cover letter to your business plan. Executive summaries are the first part of your business plan but should be the last thing written. The executive summary aims to quickly and briefly summarize the highlights of your business plan so a potential investor or lender can quickly decide whether your project is one they will continue reviewing.
An executive summary is generally a one-page wrap-up of your entire business plan, similar to an elevator pitch. This may seem easy; however, condensing your whole business concept in a short space can be challenging.
What are the key elements of an executive summary?
Every executive summary is unique, but some key components include making it more effective and focused. A standard outline includes:
Business Summary – Include the name, location, overview of the business idea, and what the business does.
Products and Services – What problem is your business solving, what is the business opportunity, and how do your products or services meet the customer’s needs?
Marketing Plan – Who will buy your product and services? Be sure to include information on your potential target market’s size and how you plan to reach them. You can also provide an overview of the market analysis and sales strategy.
Competition – Who are your competitors, and what sets you apart from them?
Management Team – Summarize the background of the owners and any relevant key employees. A major factor in small business funding is the experience of the people running the business.
Financial Projections– Provide a financial summary with the projected sales and profits over the next three years.
Funding Requirements – How much funding is being requested, and how much are the owners investing? If the plan is being used to go after business loans, banks expect owners to invest at least 15% of their own money.
Tips for writing an executive summary
When you write an executive summary, here are some tips to keep in mind.
- Write the summary after completing the full business plan. Even though the executive summary is located at the beginning of the business plan, it should be the last thing written to include all the relevant high points.
- Keep it short. The executive summary should be no more than two pages for more complicated businesses; however, some companies will only need a couple of paragraphs. In general, the shorter, the better.
- Write clearly and concisely. This goes for the entire business plan but is especially important in the executive summary. Unnecessary rambling or overly complicated wording will turn off a lender or investor quickly. Use Grammarly (it’s free!) to clean up any mistakes and help make your writing more comfortable.
- Avoid using industry jargon. Assume your reader knows nothing about your industry. If your readers can’t understand what you are trying to do, they aren’t going to fund the project.
- If your business will need a Small Business Administration (SBA) guarantee, the resumes of the owners and key employees will be needed.
