What is An Executive Summary?
An executive summary, in essence, is a type of summary that outlines the key aspects of your business plan. An effective executive summary will compel the reader to go through your more detailed business plan and set up a meeting with you.
This summary will highlight the proposal or problem discussed in the business plan, along with background information, a brief analysis, and end with a conclusion.
Since a business plan commences with an executive summary and helps executives determine whether it is worth going forward with the proposal, it is perhaps the most crucial element for every business plan.
In this article, we offer some tips that will help you nail your executive summary and create a lasting impression.
Tips for Preparing an Executive Summary:
1. Write it yourself
This does not mean that you cannot obtain assistance.
However, you need to remember the importance of crafting a business plan and how the entire exercise will benefit you.
When you boil down your business to its core, you can identify the areas of strength as well as any vulnerabilities for your business.
Even though writing an executive summary might feel a bit complicated, you will eventually bear the fruit of doing it yourself and not pawning it off.
2. Keep it short and sweet
The hint is in the word ‘summary’.
Anyone reading your executive summary is not expecting to go through comprehensive details and research, so make sure that the summary is not more than a few pages long.
However, instead of thinking that you need to restrict your summary to a certain number of words or pages, you should find ways to cut down on immaterial information and just stick to the key messages.
Your summary should make sense to a layperson, and to check how it comes across to a reader, you could ask someone not belonging to your circle to go through the executive summary and provide a review.
If they tell you that they found it hard to grasp the material, you should go back to the drawing board and try simplifying things further.
3. Start explosively
You want your readers to be captivated from the get-go, and hence, you need to ensure that you are beginning with a bang.
Including a relevant yet mind-boggling statistic or an inspirational quote might be a good way to get things started.
It is also important that you make your business stand out right from the start – highlight things that make your organization unique.
4. Capture the readers’ attention
Although capturing the readers’ attention is something that we will discuss throughout this article, it is such an important factor that it deserves a slot of its own.
You should ensure that your research findings and business direction incite excitement within your readers – whether they are bankers, advisors, investors, or executives.
By the time they are done reading the executive summary, they should be more than eager to get started with your business plan.
5. Problem, solution, and opportunity – in that order
These three elements will form the chunk of your executive summary.
You should briefly discuss the problem that your company will be solving, followed by how your company is going to solve that problem and whether a market for that solution exists or not.
6. Focus on the aspects that make you different
As we mentioned previously, you need to make your business stand out right from the very beginning of the executive summary.
This is where you highlight things like any novel technology that your business might be introducing or if you are already generating a substantial amount of revenue.
Your company’s uniqueness should be the crux of your executive summary – that is the only way you will be able to retain the readers’ attention all the way to the end.
7. Work more on selling instead of telling
See an executive summary as a promotional brochure rather than as a report.
You are trying to convince your reader that your business is the real deal and to make that happen, you need to highlight everything that your business plan contains and make sure that the reader simply cannot resist the temptation of going through your business plan.
8. Add a financial summary
Once again, the hint is in the word.
You do not need to present all the financial details, but do include things like revenue history, valuation, profit and loss, expenses, and cash reserves.
These details will help the investors determine whether they can expect a return or not.
Your financials should be strong enough to convince these investors that they are going to be better off investing in your business.
9. Be yourself
There is no correct style, tone, or approach for an executive summary.
What is important is that it is your business, and hence, the summary should reflect you and your business.
Own your summary by writing it in the first person or first-person plural.
By adding personality, you can make the readers feel that they are talking to you
10. Be clear about your needs
If you are looking for funding, you should be clear about the amount you will require, the length of time you will require it for, and the project that the money is going to be used for.
Also, if you expect future rounds, you should also mention the amount that you might want in the future.
An executive summary is so much more effective when your requirements are tied with your expected landmarks, and your expected landmarks are backed by forecasts and other relevant information
11. Keep it positive
An executive summary should serve to pinpoint the positive areas of your business plan and research.
The risks, vulnerabilities, and challenges can be discussed in the actual business plan.
Make sure that you are using positive, confident, and optimistic language throughout the summary.
12. Remember the ultimate goal
Keep in mind that an executive summary is just a tool, and it will not get you what you want all on its own.
An executive summary is just a way to get potential investors interested in your business.
Every sentence that you put down should serve to develop an interest in potential investors.
If you have prepared a top-notch executive summary, but do not have the business plan to back it up, you can hardly expect to receive a call, let alone a cheque for your startup.
This article covered the elements that you should focus on while writing an executive summary for your business.
If you want to learn more about drafting business plans or have some valuable insights on the subject, please feel free to contact us.