Growthink presents—How to Write a Compelling Executive Summary.
Most investors are annotative with business plans and often give them no more than a cursory review. Therefore, it is critical that the first page of the executive summary stimulates and motivates the investor to learn more about the company.
The first page of the executive summary must include the following—a concise explanation of the business, a description of the market size and market need for the business, a discussion of how the company is uniquely qualified to fulfill this need.
Believe it or not, after reading the first page of most business plans, investors often do not understand the business in which the company is operating. This is particularly true when a company is involved in a complex, highly technical business. It may seem obvious but it is critical to remember that investors cannot invest in what they do not understand. The executive summary must simplify the definition of the business to develop interest and promote a clear understanding. The rest of the plan can tell the full complex story.
Clearly defining a business often requires simplification. For instance, in online book seller could also be presented as a firm involved in procurement and distribution of written materials across a wide geographic spectrum. Obviously, the former description is more effective in setting the stage for the investor to learn what is unique about the company.
It is critical to show investors that the company is positioned in a large and growing market and that they are easy clear and compelling need for the product or service. As such, it is important to define the market by referencing credible sources as to its size and projective growth. It is especially critical that the plan proved the customer’s ability and willingness to pay for this need.
Once the investor understands the business and agrees there is a need for the company’s products and services. The final step is demonstrating that the company has not unfair competitive advantage in the market. Examples of unfair competitive advantage is could include a world class management team, proprietary technology, proven operational systems, key partnerships, and long term contracts of major customers as well as other successes today. The plan must document and detail these compelling advantages.
Investors have varied opinion regarding the best length of an executive summary. Some prefer a one-page summary while feel that a three to four–page summary is more appropriate. Including these critical elements in the first page of business plans satisfies the needs of virtually all-investors. After reading this page, investors can finish reading the executive summary or jump straight to the other sections.
At Growthink, we believe that an executive summary should include 1 to 3 additional pages that will down the essential owner to the business plan. This includes paragraphs addressing each of the following—Customer Analysis, what specific customer segments the company is targeting in their demographic profiles? Competition, who the company’s direct competitors are and the company’s key competitive advantages? Marketing Plan, how the company will effectively penetrate its target market? Financial Plan—summarizing the financial projections of the company. And, Management Team—biographies of key management team and board members.
Based on Growthink’s 10 years of business planning experience, if you take this advice in account, you will craft a much more compelling the executive summary.
For assistance with your business plan, please visit us at www.growthink.com.
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