One of the primary reasons for writing a business plan is to secure a loan. If you think investors will read your business plan document from start to finish, then think again. Most investors don’t have time to read the full text. For this reason, it is essential to leave a good first impression with the first few sections of your business plan. In this case, your executive summary can be your saving grace.
Every business plan begins with an executive summary. It gives readers a tip of the iceberg with regards to all the key components and goals of your business plan. If your executive summary fails to impress, then investors might not be interested in reading the remaining part of the document. So how do you write a compelling executive summary that wows? Keep reading to find out more.
What is an Executive Summary?
An executive summary, as the name suggests, is a summary of information. A compelling executive summary gives a brief overview of the entire proposal beautifully crafted to keep the audience engaged and works to sell. It is, by far, the most vital section of the proposal.
Purpose of the Executive Summary
The primary purpose of an executive summary is to highlight the key findings and components of a larger proposal so the audience can have an overview of what it entails within the shortest time possible. Many times, investors don’t have the time to read the full proposals. However, with an engaging, informative executive summary, most of the stakeholders will be compelled to read the entire document to get more details. This section of a proposal helps managers in the decision-making process.
What it contains
The executive summary should contain the following main parts
- A short statement of the problem to be addressed
- Background information about the problem/proposal
- Reasons for conducting the research
- Results of the research
- Implementation details
The Crucial Elements of an Effective Executive Summary
An executive summary of a proposal can be likened to a movie trailer designed to grab the viewer’s attention. The same applies to your executive summary. It should have an attention-grabbing tone that matches your readers. For example, you wouldn’t feature explicit content for an under-aged movie.
If your targeted market is a younger generation, your executive summary should come in a casual yet professional tone when compared to a business plan geared towards medical professionals. One thing to know is that the toneused matters a lot. It should give a clearer picture of the business you aim to build as well as the target market.
Since it’s a summary, this section of a business plan should be between 1 – 2 pages in length and no more than that. It should cover at most 10% of the entire proposal. A lengthy executive summary will bore your readers.
So what are the crucial elements of an executive summary?
The first paragraph of your executive summary matters a lot, so pay more attention to it. You can get your target audience thinking in the same direction as you by including a quote or statistic. The hook should be attention-grabbing. It should be captivating enough to allow readers not only read the executive summary but stay glued to reading the entire document.
The mission statement will be included in the first paragraph. This is where you will state your business name, services, location and relevant insights about your industry. Don’t forget to mention the primary goals and objectives of your plan. Keep it short and simple. Your primary focus should be on the most vital points of the proposal. These points should clearly state what will make your brand stand out among the sea of competition.
The first thing that comes to the mind of investors while reading through your executive summary is to know whether or not there is a viable market for your business. This should be pointed out in the first few paragraphs.
Provide a detailed description of your target market as well as the problems your business aims to solve. Now that you’ve identified the pain point, then you need to convince your investors that your company has the solution that these customers seek.
When it comes to building a successful business, you can’t do it alone – you need team members. Most readers will show more interest in what your team has to offer. Some of the questions you should provide answers to include?
- Who makes up your management team?
- What do they have to offer in terms of skills and experience?
- Do you have plans of adding more people to the team in the long run?
- What role does each member have to play?
You have to be as realistic as possible when it comes to providing your financial data. This section should include
- Pricing per product/service
- Expected Revenue
- Start up cost
This part of your executive summary should be able to determine your cash flow accurately. The numbers included here should align with your financial projections. This information will help investors make an informed decision.
Common Characteristics of an Executive Summary
- It should be short – a page is just perfect
- Clear, concise and must include only vital information
- Don’t be ambiguous
- Tailored to reader’s interest
- It is the last written piece of a business plan
- Stay positive all through
- Provide verified data and justification
- Consistency – it should maintain a similar order
- Don’t include irrelevant information
Tips on How to Write an Executive Summary
When it comes to an executive summary, knowing where to start can be a major challenge. You may find ithard write a compelling business plan that will grab reader’s attention. Here are some useful tips on how to write an executive summary that marvels.
It’s the last piece
A business plan is incomplete without an executive summary. So writing an executive summary after completing other parts of the plan is the best practice. Research is a key component of every proposal. From the data gathered, you can make informed business decisions. This section of the plan gives a brief insight into other parts of the proposal the best way possible. This is why it has to come last.
This section should not only be informative but also grabthe reader’s attention. This will keep them motivated to probe further into other sections that make up the proposal. The goals and solutions should create an impression. Don’t reveal everything in your executive summary. Only provide tips about what your document covers. Give them reasons to read the full story till the end.
A Standalone Piece
A thoroughly written summary will help anyone including novice and experts in the industry understand what your business plan entails. The introductory part, body and concluding sections should be highly informative. This is why an executive summary must be able to stand on its own. Investors should be able to digest the information provided in the executive summary and understand the key elements of the proposal.
Align with the Entire Proposal
Make sure your summary aligns directly with the full document. It should contain the essential parts from each section including facts, statistics,and objectives of the plan. It is made up of all the highlights of your proposal.
Just as you already know, start the first few lines of your executive summary with captivating words. Use a relevant quote or thought-provoking statistics to keep your readers in suspense.
It should focus on the positive things only. Avoid mention elements like challenges and risks involved. Leave your readers to find that out themselves as they probe further into the business plan. Try as much as possible to keep things positive.
An Identifiable Goal
Remember that investors want to see what you have in store for them. While your primary purpose for setting up a new business is to solve an impending problem, what matters to investors is what the results of these solutions will be. It is imperative that you point out what your investors will get in return. This is where your research and findings come into play. Cite figures and graphs to buttress your points.
Certainly, the outlines mentioned above gives you an insight into the general structure of an executive summary. Keep in mind that no business plan is the same. With this little insight, you can easily customize a compelling executive summary that will wow your readers.