How To Properly Prepare an Executive Summary
Here's is some key advice when you start to write an executive summary. Keep it simple and be clear. The main objective of the executive summary is to gain attention. When your reader looks at your business plan, they have no idea what to expect. They don't know you and they don't know your business. See examples here.
You want to generate some attention to your business. Once you get the readers attention, you want to generate interest.
How do you do that?...
Analyse Your Business
The summary portion of a business plan is usually one to two pages that captures and presents the essence of a business plan. To write a successful summary, try and put yourself in your readers shoes. A first time reader should be able to read it and know exactly what your business is all about.
The summary portion of your plan is a short and sweetened version of your entire business plan. It is important to note that it is not a background statement, nor is it an introduction.
Rather, it should be a preview to the business plan as a whole, just as a movie preview is to an actual movie. Have you ever seen an exciting movie preview and thought, wow! I have to see that movie! This is exactly how you want to write your summary.
That's what you want your reader to do. You want to captivate your reader's attention. You want you're reader to dive head first into the rest of your plan. Here's a perfect example...
You Want To Tell Your Readers What You Are Going To Tell Them
Huh? I know, that statement is a little confusing but read it over again. In essence, you want to give your reader an inside look into your business plan without going over too much detail. I want to make this point very clear when you write an executive summary: Get to the point quickly, clearly and effectively.
I couldn't tell you how many plans I've had to sift through, just to find out what the business was about. If I can't find it on the first page, the plan is incomplete and usually sets a bad tone for the rest of the plan. This is very important when you write your summary, make sure you're reader knows what the business is, right off the bat.
It must afford the reviewer a good first cut understanding of the material. After reading the summary, the reviewer should have a relatively sound understanding of what will be presented in greater detail throughout the plan.
This way, the reader continues with an open mind and an eagerness to learn more about your business. This is a good thing because if your reader is a potential funding partner, they are more open to recommending your business for contributions, grants or loans.
The Beginning Or The Ending?
Why not do the summary first? While an executive summary appears at the beginning of the business plan, the best time to write it up is after the plan has been completed. It is only after the entire business plan has been thought through and written that one is able to effectively summarize the business. Ever try summarizing a book without reading it? You can do it but your not fooling anyone, espcially for someone who knows what their looking for!
There are a couple of major problems that come about when entrepreneurs try to write a summary before writing the rest of the business plan. One is that it will end up being too vague and shallow, since the entire plan has not been thought through.
The other is that the entrepreneur will often try to force the plan to conform to the assumptions made in the summary portion. Don't let the summary portion drive your business plan, rather let the business plan pave the way for a successful summary.
Once You Get Their Attention, Your Half Way There
In addition to facilitating a quick understanding of the business plan, the summary should get immediate attention. Many investors, venture capitalists, and lenders indicate that it is not unusual to discard a business proposal without reading beyond the executive summary.
I know, it doesn't seem fair but when you think of the stacks of business plans that these individuals have to look at, it doesn't seem surprising at all.
The important thing to remember is to get to the point quickly, clearly, effectively and fluff free. Under no circumstance should you use fluff when you complete the summary, or the rest of your plan for that matter. A good business plan will always be based on facts and results.
Using generalities such as being number 1" or "100% customer satisfaction are not results based on fact. These are general statements with no clear objectives, process or implementation attached.
Remember to keep it broad and it should be able to stand alone without any reference to the rest of your plan.
You will have to be careful to present a concise, factual summary of the plan without being carried away with the hype.
A number of formats and outlines are appropriate when you complete the summary. One that is often effective involves providing highlights of the business plan on a section by section basis. This begins with a few sentences or paragraphs that communicate the basic nature of the company and its current stage of development.
This is important because it will focus on all or most functional areas, including a product profile, marketing plan, operational plan, and financial plan. The objective is to convey only the basic thoughts and highlights of each.
You should provide a summary description of each section only. For example, the financial plan might present the brief sales and profit history on an early stage business, along with projected sales and profit performance.
Never Forget This...
Always state a description of your business in the first couple of paragraphs of your summary. If the reader has to flip through your business plan to look for a description of your business, she will lose interest and more than likely, toss your plan.
If you are using your business plan to raise capital, always state what you are asking for. If you need $50,000 in capital, $10,000 in marketing and $7,500 in business support, state this near the end of the summary. Never leave your reader wondering what your business is about and what you are asking for.
You want to be clear and concise - Your reader should know exactly:
Where it's located;
Who you are and other owners;
What you want in terms of financing;
What kind of market you are in;
What type of industry you are in
I've decided to inlcude two examples. One example is that of a successful summary and how you should be structuring it. The other is a bad example and how you should stay clear of sounding anything like it.