Why Do I Need an Executive Summary?

As mentioned above, your business plan is a detailed document that

requires time to read. Capturing the reader’s attention with a concise, interesting
overview of your plan saves them time and indicates 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.

Executive Summary Length

When structuring your executive summary, the first thing to keep in mind is
that it should be short and comprehensive. The length of your business plan
executive summary should never exceed 3 pages; the ideal length is 1-2 pages.

Key Elements of an Executive Summary

The following are the key elements to include in your business plan executive
summary:

1. The problem statement 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
investors want to understand if the world truly needs your company’s
products and/or services.
2. 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. 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 company name, conceiving products, finding a location, etc.
4. Industry – Here you will 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. The target market or customer – Every business has a target customer
base or a target market on which they focus. Here you will detail the types
of customers you target and their demographic and psychographic profiles.
 6. Competition – When you venture into a market or an industry, there are
generally other players with which you compete. Knowing your competition
is important and market research is crucial to 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. Milestones – In addition to showing relevant milestones your company has
achieved, you need to explain your timeline for key milestones or key points
in the future. Include dates you hope to launch products, achieve sales
milestones, hire key employees, etc.
8. Financial plan – If you are requesting funding from investors or banks, they
will want to know how you are going to repay their funds. A brief financial
summary covering key points of 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. 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
people 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.

The Dos and Don’ts of Creating a Great Executive Summary

There are certain mistakes often made in writing an executive summary. If these
little glitches can be avoided, writing a flawless executive summary for your
business plan is not difficult. So here are a few important tips and tricks for you to
remember.

 Write the summary last – Your executive summary should follow nearly
the same order as your detailed business plan. Which is why it is important
that you write the summary only after you are done with all your research
and have finished writing your detailed business plan. This ensures that you
include only the most salient parts of your business plan and can write a
clear and concise summary.

 Use a positive and confident tone – The language and tone that you use
in writing any document makes a huge impact on how it is received by the
reader. Since the executive summary must convince the reader your plan
 will work, your language should be strong and assertive. For instance,
instead of using words like “might” or “could” use words like “will”. Don’t let
the readers doubt your capability by using weak language or tone of writing.

 Don’t give away everything in the summary – Many a times we make

this mistake of giving too much background or too many details in the
summary. Details are meant for the full business plan. Your executive
summary is meant to direct people towards the detailed plan, so avoid
sharing everything in the summary itself.

 Cover the bases – The executive summary must cover the important
questions asked and answered by your business plan. The three most
important questions are “What is the definition of the business you are in?”,
“What is the market size and need?” and “How is the company uniquely
qualified to succeed in that market?”

 Simplify – define your business in a way that it can be understood within

the short executive summary. To do this, you must be able to use plain
language and only one or two sentences for this definition. If there are
additional elements to the business which will go beyond its core or become
future potential directions you will take, the executive summary is not the
place to go into those. Make sure the business definition can be summed
up so that anyone with only a very basic understanding of the industry can
understand.

 Make sure the logic flows – This is true within the plan as a whole, and
within the executive summary. The logic of why your specific team and
resources are suited for the specific market opportunity you identified and
why you’ve chosen the marketing methods you have should be apparent
and raise no red flags. If there is a jump in the logic – for example, it is not
clear how the management team has any expertise suited for the business
in question – then readers will move on to another plan rather than read on
to answer that question in the body of the plan. This logic should be clear,
although in concise and simplified format, even within the executive
summary.

 Ensure the content of your summary matches your business plan –

The information that you share in your executive summary should match
what you have in your full business plan. Make sure that there are no
discrepancies between the two.
 Avoid repeating content in the executive summary – You already have
very little space to include everything you should in your executive
summary. Repeating content wastes precious space.