Knowing how to write a business plan executive summary is very important in pursuing your business goals.
Sometimes developing a good business idea may be very hard, but sourcing the capital for the business idea may really be more challenging, and always requires some skills.
Though executive summary is highly needed in raising capital for business start-ups, but it can also serve in business expansion or when searching for investors for an existing business.
So, before we talk about how to write a business plan executive summary, let’s first of all understand what an executive summary is all about.
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What is An Executive Summary?
Just as the name implies, an executive summary reflects its name; it is a short, summarized document or part of a document usually meant for the description of a business or business idea. The major purpose of an executive summary is to raise capital for business start-up or expansion, or just to provide an overview of a business to customers, or to investors.
What is the difference between executive summary and a business plan?
Executive Summary and a business plan works hand in hand. While a business plan provides the full details of a business and it’s operation, an executive summary is just a summarized form of a business plan.
Business Plan is usually a comprehensive document that provides the full details of a business or business idea; the goals and objectives of the business and how it hopes to achieve them in a specific period of time.
Both business plan and executive summary are usually prepared for the purpose of securing capital for Start-up or expansion, or to get investors into an existing business.
The essence of having an executive summary is to help the reader easily go through the important parts of your business plan.
It always gives the reader the interests whether to read the business plan or not; and most times the readers may only want to read the executive summary alone because of limited time to read the complete business plan.
This is why an executive summary needs to be carefully written, to be interesting enough to convince the readers should they wish not to read the full business plan.
An executive summary is usually very short, ranging from 2 – 4 pages, and most times depending on the conditions available. While a business plan can run from 10 to 15 pages for smaller Star-tups, and higher for more standard businesses.
An executive summary is usually written last, after you might have prepared your business plan; so that it can cover all the important parts of your business plan.
Though an executive summary can be written last, it is usually at the first part/section or at the front of a business plan. And sometimes, it may even be submitted separately from a business plan, depending on the conditions available.
Importance Of An Executive Summary
Due to the lengthy nature of a business plan, most readers or investors don’t always go through the business plan, but rely wholly on the executive summary for their decision; possibly because they don’t have enough time to read through a number of such voluminous documents.
One mind blowing fact is that most business plans get flipped out after reading the executive summary, this means that the executive summary has the capacity to determine whether your business plan would yield success or not.
So, a well written executive summary can help you to capture the attention and interest of the readers, thereby achieving your business goals.
How To Write A Good Executive Summary For Your Business
While writing your executive summary, it is always necessary to include all the important parts of your business plan; but in a very concise and summarized form.
Knowing that the readers don’t usually have the time to read through these bulky documents sometimes, it would be to your best advantage to keep your executive summary as short as possible while still including all the necessary and compelling information. So, in this section, we shall be discussing extensively on how to write a business plan executive summary. Stay turned!
Important Parts To Include In Your Executive Summary
Description of Your Business
The first impression to arousing the interest of your reader is by presenting an overview of what your business or idea is all about.
You have to specify if you are dealing with products or offering services.
If you are dealing with products, you have to describe the nature and type of products you deal with in your business.
If you are offering services, you also have to describe clearly the type of service you offer to your target audience.
How Did You Come Up With This Idea?
If your business is still at the idea stage, it would be nice to State how you came up with your business idea. What really inspired you to develop such business idea? Is it because of the past experience you had or from the market research you have conducted.
What Problem Do You Want To Solve With Your Business or Idea?
A business or idea that does not have any problem to solve in the society is not worth being a business.
For example: the cost of garri or cassava is really going high on every year, more than it supposed to be. Also some statistics suggest that garri or cassava may soon become very scarce in Nigeria, because people are being discouraged from farming cassava due to pest and animal attacks recorded years back.
Meanwhile this may really brig about hunger especially among the poor generation, knowing that garri is one of the majorly used foods in Nigeria.
So, this may really be an identified problem, which may turn to a business opportunity; trying to solve a problem of hunger possibly by going into cassava farming business.
Another example may be that, in the street where you live; people always have to travel far before they can buy provision goods for their family daily use. You may try to address this problem by striving to open a provision store in that street of yours, thereby saving people from stress, at the same turning it into a business opportunity.
You may keep the description of your business as short as not more than 150 words.
Your Business Process
A business process is a set of activities through which identified business goals would be achieved.
Having stated the problems you identified which you want to address with your business; in your business process, you have to explain how you would address these problems.
You have to explain the strategies you would be using in achieving these business goals of yours.
If your business is dealing with products, you have to explain how you can create or develop your products to be different from others.
If your business is offering services, you would also need to explain how you would equip yourself and/or your team towards giving the required services to your target audience.
Describe Your Pricing
Here, you would need to describe the average price you want to set for your products or services.
But if you have not decided your price yet, you would have to explain what you will consider in setting your price for the products or services offered by your business.
You can keep your pricing as short as not more than 20 words.
Profitability of Your Business
In this section, you are expected to describe how you would make profit in your business.
How many customers do you expect to patronize you in a year inorder to make a specific amount of money?
You can keep this part as short as not more than 50 words.
Here, you are expected to describe the size of your target audience. You have to describe the nature and how many customers your business anticipate to target.
If you are selling baby wears, it would be clear that your target audience are majorly the pregnant and nursing mothers. Then what is the population of the pregnant and nursing mothers living around your business environment?
You have to keep this part as short as not more than 50 words.
Your Marketing Strategies
A marketing strategy is a planned approach through which you want to sell and promote your business.
You have to explain the tactics you want to use to reach out to your customers or more customers; which would be a way of promoting your business.
How do you want to build or maintain customer relationship and trust? How do you want to build customer loyalty?
How do you want to create more visibility for your business?
Is it through offline or online channels?
Then what are these channels?
You can keep this section as short as not more than 100 words.
Your Business Analysis
Business analysis is research approach used to identify the potential problems and challenges a business may likely face either presently or in future; and how to tackle these challenges when they arise.
In scouting for the potential challenges of your business, you can make use of these 2 analytical approaches:
So, in your market analysis, you are expected to highlight the challenges you foresee in your business, and how you want to tackle them if they show up. These may be challenges relating to enviroment, culture, polititcal, and so on… just as outlined above. Also identify the nature of your competitors and the possible opportunity that lie latent in your business, and how you can harness these opportunities.
You should keep this part as short as not more than 50 words.
Your Current Needs In The Business
Here, you are expected to describe the actual resources you need inorder to achieve your business goals. This could be finance, or the type of team you need that would help to achieve your goals.
You should keep this section as short as not more than 100 words.
Describe Your Plan For The Business
In this section, you are expected to explain what present or future plans you have for your business.
What do you hope to accomplish in the next years?
It could be that you want to make a certain amount of profit in a specified period of time; or you want to expand and have more branches; you want to build new house for your business; or that you want to have a specific number of customers.
In this section, you should keep it as short as not more than 150 words.
Business plan executive summary is usually the first section and an essential part of a business plan which always serve as summary of what is contained in the business plan.
Since the readers/investors sometimes don’t have enough time to read the voluminous business documents, they sometimes rely on executive summary to get the major information they need from the business plan.
This is why a well written executive summary is very important for achieving your business goals, as the summary makes first impression to the readers.
There is always need to do everything possible to keep your executive summary very interesting and compelling so that you would be able to capture the interest of your readers.
This was why I decided to make out time to put this article together, hoping that it would really give you all you need for writing a perfect executive summary for your business.