For the past twenty years, I have spoken to hundreds, if not thousands of investors. From each conversation I try and walk away with at least one insight that I can pass along to our Biz Plan Builder business planning software customers.
One bit of knowledge that I have received consistently from investors relates to the importance of the executive summary to getting an investors attention. An executive summary will either inspire an investor or will not. It will help open the door to further discussion and exploration or it will not. If an investor wishes to learn more about your opportunity, your business plan will be the tool you use to share the “whole story”. However, it is your executive summary which is the key to opening the door to an expanded conversation.
An executive summary is a synopsis of your business plan, summarizing for the reader where your business has been, where it is going, and what it will look like when it gets there. It is the first section of your business plan and most often the first thing an investor will read. Be sure to get to the point and make it compelling – explain why your business will make money and is a great investment. (For bankers, it should demonstrate common business sense and that you have the ability to pay back their loan.) If you lose readers here, forget having them read any further.
Essentially: Why the product or service, why now, and why you…
In 2 pages or less… summarize the value proposition of your business. (Print on both sides of the paper so it looks like one page!) What is the present situation in the world and how will your business solve a problem or provide what people want? What is the status of your product or service? What management is in place? What do your finances look like today and in the near term? How much money do you need and for what? Who do you need to hire? What is your marketing and sales plan? Do you have any reference customers (a wonderful indicator of viability!)?
Always write the Executive Summary AFTER you have completed your business plan.
Presume that the person receiving your business plan does NOT have time to read your full document. On average, the typical Venture Capital partner receives 3 to 5 business plans per day/week; he/she does not have time to read them all. Your executive summary is the vehicle by which you hook the reader onto your idea and inspire them to want to read on further.
Be sure to touch on at least the following:
- The Business – company background, vision and mission, objectives, products and services
- Market Analysis – trends, size, competition analysis, projected market share, decisions on products and services
- Industry Analysis – trends, demand outlook, barriers to entry and growth, impact of innovation and technology, impact of economy, government and financial health of the industry
- Description of the technology required to develop products
- Summary of the resources needed to develop the product and bring it to market
- Capital requirements and potential performance
Also, remember that your first sentence is the executive summary of your executive summary – your “elevator pitch” statement may work here.
One other tip before you start on your executive summary. Each time you receive feedback on your plan or executive summary, be sure that it makes it into the next iteration of your documents. Incorporating feedback from experts is a key to strengthening your presentation and hopefully winning over your investor audience.
Your secret weapon that builds your business!
BizPlanBuilder writes a professional business plan for your project quickly and efficiently. Its organized system of pre-scripted sample business plan templates in Microsoft® Word, flexible Excel financial models, and PowerPoint presentation example can be downloaded as an app or accessed online where you can collaborate with your team and advisors. Windows / Macintosh.
It’s the fastest and easiest way of turning your ideas into an investment-grade business plan and a successful business. BizPlanBuilder also supplements the “business model canvas” and “lean start-up” ideas to give investors the details they want before writing you a check.
It’s the funding leader evolved and vetted over 25+ years through thousands of deals with banks, SBA lenders, angel investors & venture capitalists worldwide.
As a newly formed business that has raised its first capital I can assure you that every word included in this article is solid advice. The rules have changed in the last two years. Banks are no longer the source of working capital for all of us small and startup businesses. Our business plans are the key to survival.