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When writing a business plan, the first thing readers will see is the executive summary. If your plan is being used to go after funding, it’s important to spend some time carefully crafting the executive summary to capture the reader’s attention. How do you write a great executive summary? Read further to find out.
What is an executive summary?
The executive summary is essentially the cover letter to your business plan. The executive summary is located at the very beginning of the business plan, but should be the last thing written. The purpose of the executive summary is to quickly and briefly summarize the detailed sections of the business plan so a potential investor or lender can quickly decide whether your project is one they will continue reviewing.
An executive summary should be, at most, a one-page wrap-up of your entire business plan. This may seem like an easy task however it can be challenging to condense your entire business concept in a short amount of space.
What are the key elements of an executive summary?
Every executive summary is unique, but there are some key components to include to make it more effective and focused. A common outline includes:
Business Summary – Include the name, location and overview of what the business does.
Products and Services – What problem is the business solving and how do your products or services meet the customer’s needs?
Market Overview – Who will buy your product and services? Include information on the size of your potential target market and how you plan to reach them.
Competition – Who are your competitors and what sets you apart from them?
Management Team – Summarize the background of the owners and any relevant key employees. A major factor in small business funding is the experience of the people running the business.
Financial Overview – Briefly explain the projected sales and profits over the next three years
Funding Requirements – How much is being requested and how much are the owners are investing? If the plan is being used to go after business loans, banks expect owners to invest at least 15% of their own money in the business.
Tips for writing an executive summary
- Write the summary after completing the business plan. Even though it is at the beginning of your plan, it should be the last thing written to make sure it includes all the relevant high points.
- Keep it short. The executive summary should be no more than 1 page, however some businesses will only need a couple of paragraphs. In general, the shorter, the better.
- Write in a clear and concise manner. This goes for the entire business plan, but is especially important in the executive summary. Unnecessary rambling or overly complex wording will turn off a lender or investor quickly. Use Grammarly (it’s free!) to clean up any mistakes and help make your writing easier to read.
- Avoid using industry jargon. Assume your reader knows nothing about your industry. If your reader can’t understand what it is you are trying to do, they aren’t going to fund the project.