As the name implies, an Executive Summary is a summary of your entire business plan. It should be prepared on the basis of a well-thought business strategy stemming from a comprehensive study of the external and internal business environment.
Unfortunately, most start-ups try to put the cart before the horse by preparing an executive summary as a weak alternative to an actual business plan. These summaries tend to look more like marketing brochures and do not, or rather, cannot exude the confidence of a well-researched and well-rounded business plan.
The executive summary is the first (and often last) thing read by potential investors. As I wrote in my previous article covering the business plan basics, this is your one chance to get them to read the rest of the plan.
That doesn't necessarily mean doing hand-stands and back-flips or giving away your plan lock stock and barrel - but it should entice readers to pour into the juicy details that the actual plan will reveal. There's only so much you can talk about in a one- or two-pager anyway - since that's the maximum anyone wants to deal with at this stage.
A lot of executive summaries start off with some random market facts. This is a rather defensive approach and does not play well with investors. Providing a straightforward definition of the business is the only way to start your executive summary.
In a few simple yet effective words, tell your potential investors about your business and its potential before they divert their initial gaze. For example, try "XYZ Inc. promises corporations that use social media more loyal fans than any other channel by using our patented technology."
Keeping in line with that argument, this is also not the time to bring out your knowledge of Shakespeare and verse, or use guerrilla tactics to 'grab' your reader - investors like to see no-nonsense from start to finish. So leave out the clever language and get straight to the point.
Another problem with a lot executive summaries is the use of adjectives: try keeping them to a minimum. Use the extra space to fill in some relevant arguments rather than force-feed the idea of how fantastic, amazing and super your business is. Having said that, try not to sound like the town mortician either (not that they're any less enthusiastic by any means).
Now that you have earned a few extra seconds to convince your readers, build up a solid argument using well-researched facts and figures. Don't go overboard with the level of detail though - with the exception of some major creds.
While a dash of color or some well-presented visuals are recommended, leave out any charts, tables, infographics and sources of information that digress from the main argument.
At this point, you're very close to the jugular so bring out those canines to let the reader sink in to what you've got. You might want to mention your team members, or talk about a host of strategic reasons why you are set to succeed.
Don't forget to mention all that you have actually achieved to date. Investors convinced that you are truly on to something are now searching for clear evidence that you are indeed the knight in shining armour to pull the sword from the stone.
However, try to be subtle, with the promise that there's more waiting for them in the rest of the plan - and also bring out some of the romance from the investors' past lives as start-up entrepreneurs. For example, you could mention "two design patents from years of painstaking research" and leave the finer details for the actual plan.
A healthy serving of numbers that speak to investors in their language is the icing on the cake and needs to make sense intuitively based on a real understanding of the market and how the business operates. If your projected cash flows, revenues or number of users seem improbable or arbitrary, you can discard any notion of investors ever taking you seriously.
Once again, all of this can only be achieved by writing the executive summary after completing your business plan. If there is anything mentioned in the executive summary that hasn't been elaborated on in the extended documentation, then you've failed to make the connection.
We have helped small and medium sized businesses across the globe raise money for new ventures by crafting business plans that speak to investors in the language they understand.
Please visit our website for further information: http://www.qutbull-hoda.com or send us an email at qutbull.hoda@gmail.com
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