Your executive summary is the portion of your business plan whose function is to get the attention of investors and make them interested enough in your business to read the rest of the plan. What you want to do here is to keep potential investors reading; venture capitalists see business plans every day and they donΓÇÖt have time to read them all.
Your business plan executive summary should consist of no more than four pages, with many experts saying that an executive summary should be no longer than one page or perhaps two. On the first page of your executive summary, you should provide your reader with everything they need to know to decide if your company is something they may want to invest in. The remaining pages of the executive summary should give supporting information which convinces the investor to continue reading the rest of your business plan.
You may want to think of your executive summary as a news story, with the most important information at the very beginning. Following paragraphs and pages recap the facts and expand on them, providing additional details.
The first page of your business plan executive summary has to include:
A brief description of the business
A description of the need your business will meet and the size of the target market
Why this business is uniquely positioned to meet this need
Once youΓÇÖve gotten the attention of investors with the first page, they can continue reading the executive summary or skip ahead to other sections of your plan.
The following pages of your executive summary must contain:
Customer Analysis: Explain your target demographic(s)
Competition: List your direct competitors and your most important competitive advantages
Marketing Plan: Explain how you will gain market share in your niche
Financial Plan: This is a summary of your financial projections
Management Team: Biographies of your board members and key members of your management team
ItΓÇÖs vital to be concise on the first page of your executive summary, so keep it short ΓÇô a company that manufactures birdhouses for instance, should be a ΓÇ£birdhouse manufacturerΓÇ¥, not a ΓÇ£producer of wooden housing systems for avian wildlifeΓÇ¥. Keeping it short and simple saves space and makes your business easier to remember.
Be specific as well as accurate when you provide information about the size of the market you plan to serve and the need that your company plans to meet. For instance, your company may be in the $1 trillion healthcare industry, but if your company manufactures thermometers, it stands to reason that your market segment will be much smaller. If you overstate your companyΓÇÖs revenue earning potential, it will more than likely result in it being tossed without further consideration.
When you explain why your business is uniquely positioned to meet an unfulfilled need in your target market, you have to also explain any competitive advantages your company may have. This might include a top notch management team, proprietary technology, partnerships with major players in your economic sectors and sizable, long term contracts with large-scale customers.