Why you need a killer executive summary in your business plan
By Brian Hill and Dee Power
Looking for capital for your business or investors for your company? Then you need a killer executive summary in your business plan. The purpose of the executive summary is to entice the reader to review, or request to review, the entire business plan. The executive summary is not a mini version of the entire business plan. Keep it brief. It should be viewed as a marketing tool, a very important marketing tool.
While the executive summary is presented first, it is written after the entire plan has been completed. It should not contain any information that cannot be found elsewhere in the business plan. Don’t write the executive summary first, with the idea you can always expand it later into a full blown business plan, that just doesn’t work. The executive summary could be sent with a personalized cover letter, to potential investors.
What should your executive summary include?
A brief two to three page overview of the company with one or two paragraphs under each of the following headings:
Capital Required: Amount, uses and type of the capital requested.
Business Activity: The company’s products or services.
Business Profile: A very brief description of when the company was established, by whom, number of employees, any recent changes.
Market Opportunity: Define the company’s market base, the customers, where they are located. Number of customers or dollar size of market.
Marketing Strategy: The company’s marketing: advertising, promotions, methods of distribution, and sales force.
Competitive Factors: The competitors, their strengths and
Facilities: Buildings, locations, equipment, machinery.
Staffing: Number of employees and divisions.
Management Team: Brief description of senior management.
Ownership: Who are the owners and their percentage and relationship.
Financial Summary: Brief summary of the financial performance of the company for the last three to five years and what is projected for the next three to five years.
Critical Mistakes You Don’t Want To Make
Forgetting to include your contact information, name and phone number
Not including the amount of your capital request
Not clearly articulating what business the company is in Losing the reader in technical jargon
Too short, one page is not adequate Too long, no more than 3 pages Forgetting to discuss the accomplishments of the management team
Not clearly stating who the customers (market) are
Not including the marketing strategies
No financial projections
Tips For A Better Executive Summary
You need a stand-alone exciting executive summary. Most investors only want to see a 2 to 3 page executive summary as their introduction to your company. If you can’t capture their interest in those 2 to 3 pages, your business plan doesn’t stand a chance of being reviewed.
DON’T go over the 3 page limit, your executive summary starts becoming a mini business plan rather than a summary.
DO include every section in your executive summary that’s in your business plan, just limit it to a paragraph for each section.
DON’T lie or exaggerate, in your summary or in your business plan. Conveying a sense of excitement is okay, hype is not.
DO keep in mind the objective of the executive summary is to entice the investor to request the business plan. The summary doesn’t have to answer every question or address every issue.
DON’T make careless mistakes, math errors, or a sloppy presentation. This is your first, and perhaps the only chance that you get to make a good impression.
DO have someone who is unfamiliar with your company read your executive summary. And make sure they can understand why the company is an outstanding potential investment just from that executive summary.
DON’T send a copy of the executive summary. Print out an original on your letterhead as the first page. That way if for some reason the executive summary gets separated from the cover letter, your company’s contact information is still available.
DO send the executive summary with a one page cover letter that
is personalized with the name of the investor.
Dee Power is co-author with Brian Hill, "Attracting Capital from Angels: How Their Money and Their Experience Can Help You Build a Successful Company," 2002 and "Inside Secrets To Venture Capital," 2001, both published by John Wiley & Sons. They can be reached through her company’s web site
Dee Power is Co-Author of "Business Plan Kit". Packed with
over 70 pages of critical information, examples for Dot.Com
companies, an Excel spreadsheet to forecast 3 years of expenses
and revenues, Business Plan Worksheets and lots more.