A business plan can help you secure a startup loan, attract partners or find investors. People who read business plans often have other correspondence, offers and proposals to sort through, so it’s important that your introduction makes people want to keep reading. Providing the payoff of associating with your business, while leaving the details for later, is key to creating an effective intro.
Analyze Your Audience
Knowing your audience will help you determine what you should emphasize in your business plan introduction, more commonly known as the executive summary. You start by knowing what your audience wants from you. This allows you to create different introductions for difference audiences. For example, a lender might be more interested in knowing you are financially stable enough to pay back a loan, while an investor will want to know the profit potential. Knowing your audience will help you understand the main benefit(s) you'll start your introduction with.
Determine Your Key Benefits
Research the potential benefits your business plan might bring to your audience. For example, you might ask a contact in banking what makes an attractive loan prospect for a bank, or ask a potential investor about other investments that have worked for him. You might also ask a partner what other business ventures he's found that are successful. The benefits of getting involved with your business might include:
Part ownership for a partner Interest for a lender Profits for an investor An association with your company *Long-term income potential for a silent partner
Find the Sizzle
Entrepreneurs start companies because they believe they have a product or service for which there’s a strong demand, and that the product or service has a unique selling benefit over the competition. Find industry research, test-marketing results, sales histories and other objective data that show you have a potentially hot business idea. Don’t focus on your belief in the company. Instead, focus on convincing potential lenders or investors that you have a product or service that meets a need and has an available market. For example, if you’re starting a landscaping business, you might include statistics that show new home construction is increasing in your service area and is expected to continue to grow for the next decade.
Begin your introduction with a fact that will interest your audience the most. This makes people want to read more. For example, you might start your introduction by saying, “Despite a 10 percent annual increase in dog licenses issued in Smithville for the last five years, the city only has four professional pet sitting companies serving its nearly 25,000 residents.” Without promising a specific dollar payoff, you’ve told readers there’s a money-making opportunity in Smithville.
Provide General Support
Don’t provide detailed support numbers in your introduction, advises Eric Markowitz, a senior writer for Inc. magazine. That’s what your business plan sections are for. Readers understand that unsupported claims in your intro will be addressed in more detail in your plan. For example, you can state how long it will take for the business to become profitable in the intro, and then provide financial numbers in the main part of the plan. You might state that the marketplace is currently underserved in your product or service category. In the body of your plan, you’ll list your potential customer base and the number of competitors.
Tell What’s to Come
Touch on the following information about your business in your executive summary, which readers will then want to examine in more detail in the body of the plan.
Product or service description Marketplace overview Profit potential Opportunity you’re offering
A business plan executive summary should be no more than one page long, suggests the U.S. Small Business Administration. Provide a general description of your product (primarily its unique benefit), show a demonstrated need in the marketplace (a problem you solve), discuss the profit potential and tell the reader what you’re seeking.