In case you do not know how to write your executive summary, this article will provide you with relevant information. Executive summary is just a brief introduction to your business plan.
How to Write Executive Summary and What to Include?
- Your contact information is a must. Get everything that is important;
- Describe the problem your business will solve. there should be a short description of the service or product you are providing. get your accent on what it is and why it is important.
- Describe your target auditory and target market area. in case your product’s or company’s name identifies the market by itself, you do not need to describe it.
- Do not forget to identify the goal of your business plan. You need to let your reader understand the purpose of your plan and what are you asking for.
- The author should mention and note every important detail to describe your plan and explain everything properly to the reader.
Is It Necessary to Create Executive Summary?
Please note that there is a big difference between a common summary and the executive one. You need to note that it is not always necessary to create executive summaries. Not all business planes require it. Just make it clear that you should create executive summary only in case your business plan will be read by non-experts or people not familiar with your market at all. If you are working in a company or dealing with Lean Plans, you do not need to write any summaries at all. In case you have no time to deal with such as task or need help to make it right, our team of professionals is to your service 24/7.
If you are creating your business plan to present your ideas to investors or sponsors, you will need to create an executive summary for sure. And it should be good. Lots of those people will need to get familiar with your topic and target market so an executive summary is a must. Lots of investors may make their decision just after reading your executive summary. Yes, sometimes even business plan is not as important as the executive summary.
So, what does exactly this piece of writing do? It is a perfect tool to grab your reader’s attention and to present your entire idea in a brief but effective manner. You need to make it short, clear but include all important details to hit the target right from the thesis.
Good Executive Summary Example
- Subject matter - This report provides an analysis and evaluation of the current and prospective profitability, liquidity and financial stability of Outdoor Equipment Ltd.
- Methods of analysis - Methods of analysis include trend, horizontal and vertical analyses as well as ratios such as Debt, Current and Quick ratios. Other calculations include rates of return on Shareholders Equity and Total Assets and earnings per share to name a few.
- Findings - All calculations can be found in the appendices. Results of data analysed show that all ratios are below industry averages. In particular, comparative performance is poor in the areas of profit margins, liquidity, credit control, and inventory management.
- Conclusions - The report finds the prospects of the company in its current position are not positive. The major areas of weakness require further investigation and remedial action by management.
- Recommendations (note that conclusions and recommendations can be bulleted) - Recommendations discussed include:
- improving the average collection period for accounts receivable·
- improving/increasing inventory turnover·
- reducing prepayments and perhaps increasing inventory levels
- Limitations of the report - The report also investigates the fact that the analysis conducted has limitations. Some of the limitations include: forecasting figures are not provided nature and type of company is not known nor the current economic conditions data limitations as not enough information is provided or enough detail i.e. monthly details not known results are based on past performances not present.
Facts to Note
There is a difference between standalone executive summary and its connection with the rest of the plan. It should be great in both ways. Here are few main tips you should keep in mind while creating your executive summary:
- In most cases investors and sponsors read summaries to see their opportunities. They do not want to read the entire business plan. They want to see their positive results right from the introduction.
- The entire business plan matters, but investors need to get to the main point as soon as possible. So, the executive summary is very important for your success and defines if the investor will read your entire plan at all. They need to understand what you are talking about and they want to get to the point right from the start.
- Do not hesitate to mention your previous experience. It does not matter if your previous startups and projects succeeded. Any experience is important. Let them know that you are not a beginner (if you really are). And do not forget to make it brief as the fuller information will come later.
- Do not hesitate to mention your real numbers. Tell your investors the truth and make all calculations fair and clear. Do not try to make your price lower than it is for real. The real numbers will come to the surface sooner or later anyway. So, be open to your readers as they are willing to become your partners in the future.
- You need to explain your plan B or exit strategy. You need to explain to your readers if it is possible for them to get their money back in case something goes wrong.
- Be focused on real facts and clear goals. You need to keep reader’s attention and being persuasive is the best strategy in this case. Please not that facts do not mean wordiness. You still need to be brief and focused.
- Do not try to impress your reader with any cliches or common phrases. They do not want to read the same standard phrases about guaranteed success. If you have that perspective in your plan, they will see it for sure. They want to make decisions by themselves.
Executive Summary Writing Tips
You need to note that usually investors do not even read business plans as they do not like to take risks. But it is your executive summary that needs to grab their attention and make them to proceed with reading. Your paper should cover all important points. It should be brief but clear enough to understand what your plan is all about. You should state all the risks clearly. Sometimes it matters even more than your promises of success.
Also, you need to clear up all the instructions and requirements from the bank you are trying to cooperate with and involve into your project. Please understand that bankers ask for your executive summary as they want to be aware of your project potential. Please note that there is some difference between executive summary for bankers in case you want to get a loan and summary for investors. Their risks are different just as like their interest in your project.
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