Do you know how to prepare an executive summary of a business plan? The executive summary of a business is the concise version of your business plan. In writing a comprehensive business plan, the executive summary is as well essential as the business plan itself being that it is the first part of the plan and it serves to introduce the whole plan to investors that are willing to finance your plan.
In most cases, the Executive Summary, should not be more than 2 pages, although in some exceptional cases, it could be more and it should include your business’ vision and mission statements, the presentation of your strategies, a brief introduction of what your business is all about and most importantly, your financial status.
Why is the executive summary the most important part of a business plan? The executive summary of a business plan is an avenue for you to create a good first impression on the minds of those that will be going through your business plan, most especially investors, so it is of paramount importance that the critical aspect of the plans should be included. So how do you write an executive summary?
Most business ideas come up to solve a particular solution. The content of the Executive Summary should better explain the importance of your idea and the solution it has to proffer. And also the strategies the idea will utilize to ease the life of the prospective customers/clients. If your idea or its presentation is poor, it will be of no use writing a perfect business plan, you will surely find it difficult convincing investors to finance your plan. So you need to put up a good idea to impress them and present it in the best simple way for a layman to understand.
In the Executive Summary, you have to make a detailed explanation on how you will utilise the financing that you seek in the business. This has to be right from the start (sourcing of raw materials) to the end product or services you have to render. Remembers, no investor is ready to put in their money in a business they have no idea of how you will utilise your funds. And most importantly, don’t forget to include how the investment will bring profit to the company/organization.
The executive summary should include how the investor will get back whatever funds they are pumping into your business idea and over what period of time. You have to consider what every investor will look into in your business. For instance, if you are targeting family members, they will want to retrieve their investment but will be particular about how fast it gets back to them. Bankers will look out for cash flow into the business and the ease at which you can pay back your principal loan plus interest.
Summarily, in an executive summary, it is important to include a three-year to five-year plan of tables showing the key categories as operating costs for the business, revenues and profits.
Don’t forget that you are seeking investors and they will want to know how the business will fare in the nearest future, how big it will become and how soon it will take the management to reach positive cash flow and eventually break even.
The executive summary of your business plan must talk about the ownership the business enjoys. You have to highlight who owns what in the business; you have to mention if you are the sole manager.
Note that if you have a lot of equity investor or maybe a load of creditors, this will surely complicate issues for you and make financing difficult for the business as no one would love to put their money in a red-zone.
SAMPLE EXECUTIVE SUMMARIES
The Executive Summary of the business plan should be written after you have finalised the writing of the whole business plan, which of course must have included the financial projections.