Executive Summary of a Business Plan
The Executive Summary is the most important part of your entire business plan. This is because it’s the first section in your plan, and if it doesn’t excite readers, they won’t continue reviewing it. Importantly, there is a way to ensure your executive summary is compelling and includes the key information readers expect. In this article, you’ll learn how to craft the perfect executive summary for your business plan.
Table of Contents:
- What is an Executive Summary?
- Why Do I Need an Executive Summary?
- How Long Should an Executive Summary Be for a Business Plan?
- How To Write an Executive Summary for a Business Plan + Template
- Sample Executive Summary
What is an Executive Summary?
An executive summary of a business plan gives readers a high-level overview of your business plan and highlights its key points.
The executive summary should start with a brief overview of your business concept. Then it should briefly summarize each of the key elements of your business plan: your industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan and funding needs.
If presented for funding, the executive summary provides the lender or investor a quick snapshot which helps them determine their interest level and if they should continue reading the rest of the business plan.
An effective executive summary is a quick version of your complete business plan. You need to keep it simple and succinct in order to grab the reader’s attention and convince them it’s in their best interest to keep reading.
Why Do I Need an Executive Summary?
As mentioned above, your business plan is a detailed document that requires time to read. Capture the attention of your intended audience with a concise format that provides an compelling overview of your plan to save them time and indicate which parts of the business plan may be most important to read in detail. This increases the odds that your business plan will be read and your business idea understood. This is why you need a well-written executive summary.
How Long Should a Business Plan Executive Summary Be?
When structuring your business plan executive summary, the first thing to keep in mind is that it should be short and comprehensive. The length of your executive summary should never exceed 3 pages; the ideal length is one or two pages.
How To Write an Executive Summary for a Business Plan + Template
To write a compelling executive summary, follow the steps below and use this free executive summary template as a guide:
1. State the Problem and/or Business Opportunity
Generally there is a gap or a problem in the market which your business aims to solve. This is your problem statement and it must be included in the summary, as potential investors want to understand if the world truly needs your company’s products and/or services.
2. Briefly Describe Your Business Idea
The next thing a reader would want to know is how you plan to approach the problem and solve it. This is your business model and it should briefly describe how your product or service can help solve the problem.
3. Provide Key Information About Your Company History
The best indicator of future success is past success. Your company’s history helps the reader understand how your business has evolved and grown over the years and what you’ve been able to accomplish. Even startups have generally accomplished milestones like choosing a business name, conceiving products, finding a location, etc.
4. Conduct Market Research About Your Industry
Conducting thorough market research will help you detail the industry in which you are operating, it’s size and if any trends are positively or negatively influencing it. This gives readers a sense of the size of the opportunity you are pursuing.
5. Identify the Target Market or Ideal Customer
Every business has a target customer base or a target market on which they focus. Here you will detail your target customers including their demographic and psychographic profiles.
6. Explain Your Competitive Advantage
When you venture into a market or an industry, there are generally other players with which you compete. Knowing your competition is crucial to your success. Readers of your plan want to know who your competitors are, their strengths and in what areas you will have competitive advantage. Discussing the competitive landscape is a crucial component of a strong executive summary.
7. Establish Relevant Milestones For Your Business To Achieve
In addition to showing relevant milestones your company has achieved, you need to explain your timeline for milestones or essential points in the future. Include dates you hope to launch products, achieve sales milestones, hire key employees, etc.
8. Develop a Financial Plan
If you are requesting funding from investors or banks, they will want to know how you are going to their funds. Include key financial information regarding how and where you plan to allocate the funds should be included in the summary. For existing businesses, you should also provide a history/summary of past financial performance. Finally, for all businesses, you need to provide future financial projections so investors can determine whether they might get an adequate return from investing in you and lenders can ascertain whether or not you will be able to repay your debts.
9. Describe the Qualifications of Your Management Team
In this section, you will introduce the key members of your team. The success or failure of your company depends largely on the parties involved. So, any reader surely wants to know how well equipped your team is. Mention key staff members and the experience and skills they bring, in the executive summary.
Whether you’re a large or small business, your executive summary is the first thing someone reads that forms an opinion of your business. Whether they decide to read your detailed business plan or push it aside depends on how good your executive summary is. We hope this guide helps you craft an effective and impactful executive summary. That way, readers will be more likely to read your full plan, request an in-person meeting, and give you funding to pursue your business plans.
Finish Your Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
Click here to finish your business plan today.
Looking to get started on your business plan’s executive summary? Take a look at the great executive summary example below.
Business Plan Executive Summary Example
Shoutmouth.com Executive Summary
Business Overview
Launched late last year, Shoutmouth.com is the most comprehensive music news website on the Internet.
Music is one of the most searched and accessed interests on the Internet. Top music artists like Taylor Swift receive over 5 million searches each month. In addition, over 500 music artists each receive over 25,000 searches a month.
However, music fans are largely unsatisfied when it comes to the news and information they seek on the artists they love. This is because most music websites (e.g., RollingStone.com, MTV.com, Billboard.com, etc.) cover only the top eight to ten music stories each day – the stories with mass appeal. This type of generic coverage does not satisfy the needs of serious music fans. Music fans generally listen to many different artists and genres of music. By publishing over 100 music stories each day, Shoutmouth enables these fans to read news on all their favorite artists.
In addition to publishing comprehensive music news on over 1200 music artists, Shoutmouth is a social network that allows fans to meet and effectively communicate with other fans about music, and allows them to:
- Create personal profiles
- Interact with other members
- Provide comments on news stories and music videos
- Submit news stories and videos
- Recommend new music artists to add to the community
- Receive customized news and email alerts on their favorite artists
Success Factors
Shoutmouth is uniquely qualified to succeed due to the following reasons:
- Entrepreneurial track record: Shoutmouth’s CEO and team have helped launch numerous successful ventures.
- Monetization track record: Over the past two years, Shoutmouth’s founders have run one of the most successful online affiliate marketing programs, having sold products to over 500,000 music customers online.
- Key milestones completed: Shoutmouth’s founders have invested $500,000 to-date to staff the company (we currently have an 11-person full-time team), build the core technology, and launch the site. We have succeeded in gaining initial customer traction with 50,000 unique visitors in March, 100,000 unique visitors in April, and 200,000 unique visitors in May.
Unique Investment Metrics
The Shoutmouth investment opportunity is very exciting due to the metrics of the business.
To begin, over the past five years, over twenty social networks have been acquired. The value in these networks is their relationships with large numbers of customers, which allow acquirers to effectively sell to this target audience.
The sales price of these social networks has ranged from $25 to $137 per member. Shoutmouth has the ability to enroll members at less than $1 each, thus providing an extraordinary return on marketing expenditures. In fact, during a recent test, we were able to sign-up 2,000 members to artist-specific Shoutmouth newsletters at a cost of only 43 cents per member.
While we are building Shoutmouth to last, potential acquirers include many types of companies that seek relationships with music fans such as music media/publishing (e.g., MTV, Rolling Stone), ticketing (e.g., Ticketmaster, LiveNation) and digital music sales firms (e.g., iTunes).
Financial Strategy, Needs and Exit Strategy
While Shoutmouth’s technological, marketing and operational infrastructure has been developed, we currently require $3 million to execute on our marketing and technology plan over the next 24 months until we hit profitability.
Shoutmouth will primarily generate revenues from selling advertising space. As technologies evolve that allow us to seamlessly integrate music sampling and purchasing on our site, sales of downloadable music are also expected to become a significant revenue source. To a lesser extent, we may sell other music-related items such as ringtones, concert tickets, and apparel.
Topline projections over the next three years are as follows:
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Shoutmouth Members | 626,876 | 4,289,580 | 9,577,020 |
| Unique Visitors | 2,348,050 | 8,390,187 | 18,633,659 |
| Total Page Views (Millions) | 20.7 | 273.5 | 781.0 |
| Revenues | $165,431 | $2,461,127 | $7,810,354 |
| Expenses | $1,407,958 | $2,591,978 | $2,838,423 |
| EBITDA | ($1,242,527) | ($130,851) | $4,971,931 |
Download our executive summary example business plan PDF.
Conclusion
By writing an executive summary that highlights your business’s potential and key strengths, you can entice your target audience to delve deeper into your full business plan. Remember, this is your chance to make a strong first impression and convince them your idea is worth their investment. Take the time to refine your summary, ensuring it’s concise and informative, and leaves the reader wanting more. With a well-written executive summary, you’ll be well on your way to securing the funding or support you need to turn your business dream into a reality.
Finish Your Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
Click here to finish your business plan today.
