What to Include in Your
Executive Summary
PURPOSE OF THIS SECTION:
Write a compelling Executive Summary which will summarize the key points of your business plan and entice the reader to read the plan in
detail. Writing it last, after the business plan is at least fully drafted, is common practice. Write it first, write it last, just write it well!
SECTION OUTLINE AND INSTRUCTIONS
While there is no firm rule for the length of Executive Summaries, two to three pages is considered ideal.
Business Model Overview and Approach
Describe and quantify the opportunity and where you fit. Explain why you’re in business along with the reasons why you’ll be able to take
advantage of this opportunity.
• Market Summary
Reference credible sources and include the name of your source(s) of information along with the date. How large is the
market and stage of development (early growth versus mature). What are the key drivers, trends and influences in the
market?
• Differentiators
What makes you different? Better?
This section is very often overlooked and yet it is one of the most important points you need to bring out in your business
plan. What is it that separates you from the rest of the pack? Is your product proprietary, patented, copyrighted? Is your
service better, faster, cheaper and if so why. Is your advantage a temporary “window” and are there steps you can take to
protect your position. Are there barriers to entry that will support your financial projections?
• Low Hanging Fruit” or “Sure Things”
Describe any opportunities the management team brings with them, existing agreements, and imminent contracts. Those
types of details are very important since they provide clarity to revenue potential and the timeline associated with
breakeven and profitability.
• Description of Products / Services
This section should be brief and concise. This is also a good opportunity to use bullet points. Include a very brief overview
and description of your products and services.
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What to Include (Continued)
Management Team
The adage is that investors invest in people not products. Historically, a company’s management team is one of the best predictors of
success and investors will look very closely at the individuals who will be managing the company. The ideal scenario is that senior managers
have previously started and successfully managed companies in the same business. Short of this, you want to emphasize the previous
relevant experience of the management team. Mention the names of companies and positions held and milestones achieved.
Sample John Q. Doe, Chief Executive Officer, and Director since February 1998 and President since January 2000. He has had experience in
the widget field with his own firm, John Doe Co., of Rochester, New York, from 1990 to 1997. This firm was sold to The Widget Factory, Inc.
in 1997. Mr. Doe held a sales position with IBM, prior to that time. Mr. Doe has a bachelor’s degree in Economics from the Syracuse
University and an MBA from New York University.
Proceeds Distribution Table
Investors are typically very leery of using their funds to pay large salaries or previous obligations (debts, loans or personal investments).
How much and what type of funding are you looking for (equity capital, loans). Keep in mind that one of the most common causes of new
business failures is under-capitalization. You should have a very clear idea of how much money you will need to operate your business for
the first full year. An investor or loan officer will also want to know how the funds will be used. While investors are interested primarily in
the first three years of operation, you should also have projections for years 4 and 5.
Key Financials
This table should include a recap of your income statement. Simply copy the amounts from the appropriate line of your Income Statement
Year 1
Year 2
Year 3
Revenue
Cost of Goods Sold
Gross Profit
GM % Of Revenue
SG&A Expenses
Net Income
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Tips on Writing Your Executive
Summary
WRITING TIPS
•
In clear, concise, jargon-free language, write a reader-friendly summary that an executive in any industry can grasp. Besides describing the benefits
of your goods to your customer base, explain clearly the revenue model and value proposition; include information about your market, its size and
demographics so investors can judge the scale of opportunity; pricing issues and competition. Investors know that virtually all companies have
competition, so trying to convince them that you don’t will damage your credibility from the outset. You should explain why you have or perceive a
competitive advantage over your competitors and why you believe you will maintain that advantage, but avoid puffery and bluster.
•
Employ KISS twice: keep it simple, stupid and keep it short, stupid. Avoid highly technical writing because at this early stage, investors are trying to
get a big-picture snapshot of your company, not what kind of alloy you use in your widgets. Technical writing will turn off an investor if he doesn’t
understand the teaser, which should appeal to a broad base of venture capitalists, not just those intimately familiar with your industry. So too will
excessive verbiage; keep the document to four pages at the most.
•
Write in an active voice, not the passive. Be realistic, but avoid negativity of any kind. Avoid empty adjectives that carry no substance. And avoid the
spell-check land mine; triple-check spelling and formatting. Venture capitalists have so many teasers and business plans — and underlying
businesses — to choose from that they are likely to discard those that appear sloppy.
•
Concise length and summary format will enable the potential investors to quickly understand what you plan to do with your business.
•
Preview the main points of an in-depth report; write for nontechnical people who don't have time to read the main report.
•
Create a summary each time you write a business report exceeding four pages. Make sure it's no more than 1/10 the length of the main report.
•
List the main points the summary will cover, putting them in the order in which they appear in the main report.
•
Write a simple declarative sentence that states each of the main points.
•
Add supporting or explanatory sentences as needed, avoiding unnecessary technical material and jargon.
•
Read the summary slowly and critically, making sure it conveys your purpose, message and key recommendations. You want readers to be able to
skim the main report without missing the point.
•
Check for errors of style, spelling, grammar and punctuation. Ask a fellow writer to proofread and edit the document
•
Ask a non-technical person - for example, your parents or your spouse - to read the document. If it confuses or bores them, the summary probably
will have the same effect on other non-technical readers
•
Keep your main points in mind as you write the summary. You needn't include every point in the summary, but ensure that the major ideas are
covered succinctly. Banks and Venture Capitalists are busy people and if their interest is not piqued at the start they will not continue to read your
plan. VCs receive thousands of plans, many of them the size of a book. They will only read a plan if the first few pages indicate that it is worthy of
further exploration, which is why your executive summary is so important.
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