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The purpose of the Executive Summary is to present a compelling overview of your business plan to entice the reader (typically an investor) to learn more about your company.  It should describe and quantify the opportunity and where your company fits.  It should also explain why you’re in business and why you’ll be able to take advantage of this opportunity.  Writing it after the business plan is fully drafted is common practice.  Write it first, write it last, just write it well!

This is a template (Executive Summary Template) which can be used to guide you through the process of creating an Executive Summary. Feel free to modify this template to meet your company’s specific needs.  While there is no firm rule for the length of Executive Summaries, two to three pages is considered ideal.  Pictures and graphs are a great way to convey your message in a quick, easy to visualize manner. Refer to the section at the end of this document for additional tips.

Market Summary

In this section describe the size and stage of the market (early growth versus mature).  Also include the key drivers, trends and influences in the market.  Be sure to reference credible sources and include the name of your source(s) of information along with the date.

Highlight the types of customers you will target in this market and describe how you will acquire and retain these customers.

Products / Services

Include a very brief overview and description of your products and services in this section. This section should be brief and concise and presents a good opportunity to use bullet points.

Differentiators

What makes you different?  Better?

This section is very often overlooked and yet it is one of the most important points you should highlight.  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?  These are the questions you should answer in this section.

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.
Also list any key external resources holding a leadership position in the company.  All board and advisors should also be listed.

Use of Funds

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 at least a 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.
Investors are typically very leery of using their funds to pay large salaries or previous obligations (debts, loans or personal investments).

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

If there are key operational metrics relevant to your industry, be sure to include those as well in this section.

Writing Tips

Be sure to read through these and delete this section when you are finished with your document.

  • 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 they 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.
  • 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.
  • Check for errors of style, spelling, grammar and punctuation. Ask a fellow writer to proofread and edit the document
  • 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.

Click here for an Executive Summary Template.