What Does the Executive Summary of the Business Plan Entail?
The executive summary of a business plan condenses some of the most important information contained in the body of the plan. As a writing tool, the executive summary is a key factor in keeping the attention of the reader. As a business tool, the executive summary is partly a business pitch for current and potential stakeholders in the business. Therefore, it is helpful to consider the executive summary as a much smaller version of the business plan.
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Identification
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A thorough executive summary should include the name and location of the business. This is important to consider because it is helpful to establish the identity of the new business for investors and lenders who are likely to examine the business plan to assess risk. In addition, discuss the product or service the new business intends to deliver to customers and the process used by the business to ensure delivery.
Goals
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The executive summary of a business plan also summarizes the goals that guide business operations. A business plan establishes the operations of a current business, but also works as a planning tool to guide growth and measure progress. Briefly discussing goals in the executive summary shows readers that the management team is oriented toward growth and in meeting established benchmarks.
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Management
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Discuss the management team in place to carry out the work of the new business. Summarize the qualifications of each member of the management team, and highlight specific skills that contribute to the competitive advantage of the new business. Remember that a detailed description of the leadership and responsibility structure of the business is discussed fully later in the business plan. The executive summary should merely be an overview of this section.
Projections
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Financial projections are important for perspective lenders and investors who look for an accurate basis to judge potential returns on the investment. Since the executive summary is typically the introduction to your business, include a realistic and reasonable overview of the likely scenarios for revenue, costs and break even analysis for three years in the future. If the executive summary is part of a business plan for a business plan already in existence, include the past three years of financial performance to lend credibility to projections about future earnings.
Clarity
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Writing clearly makes balancing all the information in the executive summary easier for readers to understand. Clear writing also enhances the ability of the executive summary to communicate key pieces of information to readers unfamiliar with certain industries. A business plan written for peers or colleagues in a highly technical industry is less likely to be understood by anyone else. Ensure that the executive summary is written for an unfamiliar audience.
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