Writing an Executive Summary
The executive summary of the business plan really is the focal point of the document given that many people read through these documents many times a day and they're looking for a high impact statement so that can be given to the reader. Most importantly, one of the things that is often omitted by many people that are writing their own executive summary is a table that showcases the anticipated profit and loss statements that are done for the first three years of operation. One of the most exciting aspects of any business is its ability to produce revenue and profits over a substantial period of time. As such, it is important that the document feature information that alludes to how lucrative the potential business or project can be. Usually, this is not a full profit and loss statement but rather a small table that overviews the revenues, gross profits, operating expenses, and EBITDA. The smaller table can provide a very quick overview as to the
financial picture of the business especially as it relates the amount of capital that is being sought by the entrepreneur.
One of the things that should not be included within the executive summary – but is often done so by inexperienced business plan writers – is the industry research. Many people often put way too much information into the executive summary which really needs to be showcased within the entire business planning document and not within the first 2 to 3 pages. The industry research usually runs about two pages to three pages in length and it is more appropriate for the body of the text rather than the introduction.
If the owner-operator or entrepreneur has a significant amount of experience within the industry then a small biography should be included right at the onset of the executive summary. Usually this overview of the senior management should run about two paragraphs or three paragraphs in length for each key member of the management team. For single owner-operator this can just be the 2 to 3 paragraphs that are specific for the owner. This is not need to be the full resume of the individual given that these are usually included as part of the overall business planning package and are not directly put within the document itself.
An overview of the products and services being sold also need to be included within the executive summary, but it is important not to go too overboard with this as the business plan is going to showcase all the products and services that are being offered throughout the entire document. One exception to this is if the company has developed or is developing a very unique piece of technology or other proprietary product that is really going to stand apart within the market. In this case, it may be very important to have a few dedicated paragraphs that showcases the technology and why it will be a highly lucrative business investment once it is applied to the market as a whole. One of the key things to do if you are writing an executive summary specific for a technology business is to keep the technical jargon down to a minimum given that not everyone that is going to be reading this document has a similar background in electronics, computer science, or
any other industry that involves highly complicated technical matters.
Usually the final element to an executive summary is the overview of how the business will grow over a five-year period. This includes discussing things such as organic growth, growth through acquisition, and related reinvestments of after-tax profits in order to further grow the business on a year-to-year basis. This section of the executive summary usually runs that one paragraph to two paragraphs given that the real focus should be on the start up more immediate expansion of the business rather than looking down the road 5 to 10 years.
The executive summary is generally one of the more difficult parts of the business plan to write given that it really is the first thing that a potential funding source or business partners going to see when they open the business planning document. If this executive summary is part of a much larger document and it is usually best to write this section last given a each other element can be included within this 2 to 3 page document. In some cases, many entrepreneurs will distribute the executive summary as a standalone document while referring to the fact that a full business plan exists upon request.