The executive summary of your business plan is the lure to get investors to stick around and really take a look at your entire plan. The most important thing at this point in time is to get them to read your plan because they are accustomed to getting business plans all of the time. Obviously, they cannot read all of them. So make yours stand out and be more informative than the others.
All business plan executive summaries contain one to four pages. Some people claim that the business plan should only have one page. However, others state that it should be much longer than one page.
Growthink, which is a business consulting firm, states that page one of the executive summary should have everything that an investor needs to know in order to determine if your business is a good fit. The remaining pages of the summary should be there to do more to convince a potential investor to go through the entire business plan.
Think of the executive summary as an upside down pyramid, just like in printed journalism. The most important info is placed at the top of the business plan. The rest of the plan provides supporting detail for page one.
The first page of the executive summary for your business plan should have the following things:
- A short summary of the business
- A summary of the market, its size and demands
- The reasons why your business is the one company that can provide these needs
Once the first page is read, investors can further read the executive summary or go to other areas that capture their attention.
The rest of the executive summary must have the following:
- Customer Analysis: Which customers is your business targeting and where are they located?
- Competition: Who is the main competition and the business’ main competitive advantages?
- Marketing Plan: How is the business going to successfully get into this target market?
- Financial Plan: This is a summary of the projected finances of the business
- Management Team: Detailed information of the executive team and board members.
Briefness is very important for page one of the executive summary. You might have to dumb down the actual information. Not only does this make more room on page one, but difficult phrases will only confuse investors and be hard to remember at a later point in time.
When you give evidence about market size and the need for your company, give good examples. Do not provide fluff. For example, the medical industry might have a trillion dollars, but your business will not try to target all of that niche. Exaggerating about what you company can do will ultimately get your business plan trashed by potential investors.
When you explain why your company is the one company that can provide the target market what it needs, you must be able to describe what an unfair competitive advantage is in terms of marketing. This would be things like an excellent executive team, proprietary technology, a credible operational plan, joint ventures, long term relationships with key customers and other pertinent information.