How To Write An Executive Summary
When you have completed making the business plan, it is important in the last part to write an executive summary of your business plan. Here we are going to discuss how to write an executive summary, but before that;
What is an executive summary?
Executive summary clearly explains your business, the problem that you are going to solve in customer’s life, the target audience of your business, and the key financial structures and information of your business.
It is a short summary of your business, and it tells about the important information of the company. It is specially designed to catch the attention of the readers.
Why is an executive summary important?
The primary goal of an executive summary is to have a shorter version of the main business plan. Generally investors, financiers, lenders, and employees don’t have that much time to read the whole document.
A good summary of report can help them in reading and saving time. A good written report can also grab their attention, and simultaneously you can achieve your business goal.
Many people will read the executive summary of your business plan. The others will decide whether to read the whole document or not after reading the executive summary. That makes it essential part of your business plan, so it should be effective and catch the reader’s attention.
What to include in the executive summary for a business plan?
Six must elements to include in executive summary of your business plan;
1. Product description and the problem that you are going to solve in customer’s life
Add details about product, like its features, characteristics, and its necessity. You must reflect in this section that what your product is. How it is going to solve a problem better than the competitor’s product and how it provides better solutions to the customers.
2. The target market, size of the market and its growth opportunities
Here in this section, you must mention who is going to be your target audience. Most of the time product itself speaks about who is my target market. But if not, then you must add a brief description about it and how much people will gain from the price they pay.
You must also add the total size of the market, like number of customers and how many more customers you can cover in the future. What are the growth opportunities of the market and the product in the future?
3. The competition and competitive advantage of your business
Identify and mention the competitors you are going to compete with. Explain how and on what basis your business will make its own identification in the market. It could be on the basis of price, innovation, quality, feature or anything else? Describe how your business is going to be different from other competitors.
4. What is your business model
Here you will tell about the products of the company, what is your target market, how your business plans to sells, and the current and projected expenses of the business. You can also write in which business model you are going to deal, business to business, or business to consumers or both.
It is important for both newly established business and running businesses.
5. The business and executive team of your business
Here you will explain about your business, the idea of the business, business portfolio, and the brief history of the business. You can also write about its employees and you can share statistics like how many employees are working, the location of the business, and can have an introduction of top management.
6. Financial outline and projections of your business
For a startup business, it would be to present sales forecast and goals for next one or may be three years.
For a running business, you can present recent annual growths and sales from past years. This will present trends where your business is going.
How long an executive summary should be?
Generally, executive summaries should be short. As mentioned above, the audience of your business plan doesn’t have much time to read it, and they want to have the information of business plan as quick as possible.
An executive summary should be short, likely to be of 2 pages, if possible. But it can be long, if there is a need for a long one.
Tips to write an executive summary
Before going for a development of your executive summary, you should understand a proper fit between your business and the executive summary. Executive summary, in a sequence, should be the first section of your business plan.
But it should be written in the last so that you cover all the sections you mentioned in your business plan.
Here are few tips to keep in mind before writing an executive summary;
Write it in the last
Even though your summary comes first, but you have to write it in the last. When you write a business plan, you cover many things at the moment. Then, you go for writing the executive summary and cover all those things in it.
If you will write it in the end, it will be quick and easy to cover all the aspects in the executive summary.
Keep it short and simple
Less is more. Be precise, concise and cover all the aspects from the business plan that are important. Write just a page or two, not more than five. Keep in mind that one is better than two pages and two is better than five pages. As much as your executive summary is precise, it will be better for you.
Adjust it according to your audience
If your purpose is to convince the investors from your business plan, write the executive summary according to them. Covering the opportunity, gaps and chances of growth of your business in the market.
If your purpose of writing is get a loan, write it accordingly, like how you will minimize the lender’s risks, how you will generate cash flows, and how you will pay back the amount.
Organize it according to the information provided in the whole business plan. So, that if any one reads the whole document after reading your executive summary, he does not feel any disconnection from the executive summary.
Make it convincing
Include important points that will motivate the reader. You can include your growth rates, competitive advantages, and how you are using new technologies.
Secondly, make use of strong and positive language instead of using weak language that might not motivate the reader.
Here we conclude how to write an executive summary. It is beneficial for both running and startups, because it provide the audience of your business, that what your business is about and how it going to help the customers.
An executive summary will provide a clear view to your business employees, lenders, investors, and financers, about your business. It will be the first thing written in your business plan, if it is poorly written, it could be the last thing they will read.
How To Write An Executive Summary FAQ
1. What do you mean by executive summary?
Executive summary is the first section of the business plan and it is considered to be the most important part of the business plan. Usually, it is of one or two pages, not more than five.
It is written in the last to cover all the aspects from the finalized business plan and cover all the highlights of the sections mentioned in business plan.
2. What are the elements of an executive summary?
Six must elements to include in executive summary of your business plan;
- Product description and the problem that you are going to solve in customer’s life
- The target market, size of the market and its growth opportunities
- The competition and competitive advantage of your business
- What is your business model
- The business and executive team of your business
- Financial outline and projections of your business
3. How can you make an effective executive summary?
You can make an effective executive summary by writing it in the last and keeping it short, precise, concise and to the point. Executive summary should not be more than two pages, but it should cover all the aspects written in the business plan.
4. How do you start an executive summary sample?
You must start an executive summary with the introduction of your business, its products and service, how the products and services are going to solve customer’s problems, its target market, its financial structure and outline, its competitors and how you will compete with them.
5. How long should a executive summary be?
Executive summary should ideally be of one or two pages, but can exceed, but not more than five pages. But keep in mind that one is better than two pages and two is better than five pages. As much short it is, it will be better for the reader to stay intact with it.
6. What is the purpose of an executive summary in a business plan?
The purpose of an executive summary is to provide a short summary of your business plan, like what is your business, what is your product and how your product is unique, your target market, your financial outlines, and your competitors. It covers all the sections and gives a clear view to the reader about your business.