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.
What Is an Executive Summary?
When you’re making a business plan, an important part of work is creating an effective executive summary. This part describes your business, introduces the problem it solves, presents your target audience, and reflects other important financial issues you want to share. You need to spend enough time to make a successful executive summary.
This paper helps to catch the attention of your readers and let them know all the main details about your business. When people start reading your executive summary, they decide if it's worth reading the whole business plan. That’s why you need to write it properly to get new customers, inventors, and new business partners to let your business develop and bring you good money.
In this detailed guide, you will know all the secrets of creating a perfect executive summary. Start reading and feel free to use our hints to make a proper document following the latest standards. Keep in mind that your business’ success depends on how well you will write an executive summary.
How to Write Executive Summary and What to Include?
When you want to create an effective executive summary, it’s important to hook your readers from the very beginning. You should remember that your potential investor will make a decision to read or not to read the whole paper just while reviewing your summary, so you must create this paper perfectly to increase your chances for success. It's like writing an introduction to the essay — you should grab the reader's attention and present facts to motivate them to read the entire document.
If you have got a wonderful business idea, it's time to create a detailed business plan and sell it to the investors to get money. The important thing is creating an executive summary to describe all ideas of your plan in a short and bright way. You need to do your best to make this document professional and perfect because this is the only one paper your potential investor will read to determine if the entire business plan of yours worth their attention to look through.
You need to organize all data in your document properly, so the reader will be able to get your idea and define if they are interested in your proposal or not. When writing your work, you can use a template to organize information in the right order. You can find various templates for an executive summary on the Internet and use them for creating your own paper. The things to be included are:
- 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.
You need to include some important things in your executive summary. Please view the paragraphs below to make sure you have created all the needed parts of this paper.
1. Product Description/Objective
In the first part of this work, you have a chance to tell your readers all about your company. Highlight your advantages, describe your business, grab the reader's attention with formulating a bright idea.
2. Target Your Audience
In this section, inform your readers who will use your product. Prove that production will be successful and people will buy this product.
3. Make a Competition
Put a list of your company's competitors and write reasons and proves why your company is the best on the list.
4. Financial Overview
Put the list of possible challenges and opportunities you can get in this kind of business. Provide readers with a financial plan that contains certain numbers and calculations.
5. Describe Your Team
Provide readers with a short but bright history of your company. Specify where and when it was founded, name of the owner, number of people who work there, etc.
6. Describe Your Finding Needs
If you're seeking additional finances, provide readers with a brief and clear financial summary.
Write down your company's business goals. Make a clear plan of how you're going to use additional funds to increase profits and make your business more successful.
If you are writing the paper for an established business, you need to make an outline before making your document. A good outline is a plus in writing because it helps you to not forget all the important things you are going to put into your work. Here is a list of things a strong executive summary outline should include:
- Company's mission. Write about the main goal of your business, briefly provide information about the company, its principles, and philosophy.
- Main information. Provide readers with details about your company and your team. Introduce your business to readers.
- Highlight your business. Describe briefly your business evolution, and explain how it developed.
- Financial report. If you're looking for additional finances, provide readers with a clear financial plan.
- Company's goals. Write down your company's business goals.
Why It Is Necessary to Create an Executive Summary and Who Needs It
Usually, CEOs, investors, managers, and businessmen are very busy. Your executive summary is like a gateway for the entire business plan to get read. Needless to say, business plans can be huge. Imagine if you had a pile of things to do, and someone would bring you a 70-page paper and say, “Read this business plan to find out if it’s worth paying attention to!”. In this case, you wouldn’t have enough time for reading even if the business plan is great.
The main reason for writing an executive summary is this is the only paper the reader will view. Of course, you can prepare an impeccable business plan but your potential investors and partners will not have time for reading it thoroughly. Thanks to an executive summary, people can decide if they’re interested in viewing the whole plan. In fact, investors don’t even read the business plan because they get all the needed information from the summary. Your task is to represent your idea in the executive summary to catch their attention.
When you’re working on a business plan, the main aim in your head must be how to make the investor interested and meet him or her to discuss the details. A successful executive summary will lead you to this meeting when a bad summary will just leave you standing without any business proposals from investors.
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. Qualitative research can be also very helpful for your business.
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.
Executive Summary (Short) 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.
1. Tone of Summary
Watch your language: don't use any kind of jargon or too complicated terms. Remember that your language should be quite understandable for your readers. That's why before doing this we recommend researching your audience.
The style depends on your audience. Make a research on your audience and use the proper style and tone of your language. It's quite understandable that your work would be different for the investor who has a degree in math and for the investor who is very familiar with the philosophy.
2. The Summary’s Length
Your paper length shouldn't exceed 2 pages, remember that you are creating a short document. Of course, depending on your project, the length of this document can be different. We suggest making it no longer than 4 pages because it will be difficult for your potential business investors and partners to find enough time for reading the whole paper.
3. Things to Avoid
Remember that your executive summary’s main goal is to create a successful but brief paper, get an investor to read it, and meet with the potential investor. Some people believe the goal of this document is to get potential investors to give a check for their business plan. This is a mistake because investors don’t check any business plans but look for a good one to make successful investments.
When you’re working on this paper, avoid phrases “the best decision”, “world-class economy”, “cutting-edge technology”, etc. These words don’t make your summary unique and successful. It’s better to define the main advantages of your plan and highlight them to readers.
Executive Summaries by Professionals
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Executive Summary (Full) Example
Faith in Farmers Winter Market Initiative
In recent years several programs have emerged to deal with food deserts and the lack of healthy affordable foods in lower income communities around the city. Organizations like the Philadelphia Food Trust and Farm to City have established different programs and created weekly farmers’ markets in traditionally underserved neighborhoods. However, what happens when winter hits and the markets retire for the season?
Our proposal, the Faith in Farmers Winter Market Initiative, provides low-income neighborhoods access to freshly grown foods within the centerpiece of their community – the local church, synagogue, temple or mosque. After or between weekend services, local farmers will set up indoor markets within the religious facility. Community members, both within and from outside the congregation, can then purchase produce, meats and dairy as they would at a spring or summer market. Participating vendors will have to be equipped with EBT (electronic benefit transfer) devices to accept SNAP (Supplemental Nutrition Assistance Program) and WIC (Women, Infants and Children Program) cards. Fortunately, vendors currently participating in Philadelphia farmers’ markets already have EBT devices, most through the state-administered Farmers’ Market Nutrition Program.
While establishing a new market of any kind bears risk, connecting religious institutions with local farmers to address a public health problem offers several advantages:
- Fresh food access for low-income Philadelphians is broadened with minimal involvement of the city government
- Local farmers are provided new markets during typically slow winter months
- The concentration of residents at weekend services ensures a reliable consumer base for participating farmers
- Farmers’ markets are effective in community building and disseminating nutrition education
- The program would require minimal start-up funding and the mutually beneficial partnership between farmers and the host organization should sustain the enterprise
Similar programs have thrived in major cities like Chicago and Washington D.C. as well as small towns like Dubuque, Iowa. Many successful programs have begun with small handfuls of vendors but grew quickly as residents became accustomed to the availability of freshly grown foods. Both in Chicago and D.C., winter farmers’ markets hosted by churches now boast 8 to 30 vendors per market; meanwhile, new markets are being created each year to satisfy demand. Most importantly, research has suggested that farmer’s markets produce results in lower-income communities. A recent study of farmer’s markets in an underserved Los Angeles neighborhood boasted positive feedback from residents:
- 75% came to market to do more than shop.
- 55% felt the market increased their connection to the community.
- 99% believed the market improved the health of the community.
Such ancillary benefits to the community only strengthen the argument for creating a winter program in Philadelphia. The success of the program depends on piquing the interest of local farmers and host organizations while helping coordinate between the two – requirements that are not only realistic but possible in the short-term.
Scope and Operation
Currently, there are five winter markets coordinated by Philadelphia’s Farm to Table organization, three of which are within the Philadelphia metropolitan area. These markets are located in Rittenhouse Square, Suburban Station and Chestnut Hill. Our initial goal would be to add at least two new markets in lower income areas, as defined by the Census Bureau’s 2011 median annual household income in Philadelphia. These would be small markets, with at least two vendors at each location. Our group would spearhead the project, but aim to work with organizations like the Food Trust in a consulting capacity. It is unlikely that much staffing would be required, as vendors already pay staff to sell at markets and most religious organizations can find members to volunteer for community functions. Initial funding would be used to pay for promotion and any unforeseen incidental expenses. We believe that if work were to begin this spring, the program could launch the new winter markets by January of 2014.
Immediate Plan of Action
Given the limited financial resources required to push forward with the program, we may immediately begin work on the following:
- Contact the ten local farmers currently participating in Philadelphia-area markets to gauge interest in additional business opportunities during the winter
- Contact the Mayor's Office on Faith Based Initiatives for clarity on how public services may be delivered through a relationship with the religious community.
- Target 2-3 potential host religious organizations in two lower-income areas.
- Discuss potential costs and feasibility concerns with the Philadelphia Food Trust and Farm to City
- Evaluate potential funding sources, such as the The Pennsylvania Fresh Food Financing Initiative (FFFI) and the Healthy Food Financing Initiative (HFFI), both administered through The Reinvestment Fund.