So you have a novel business idea and you've written a plan for it — that's all well and good, so long as the start of your written business plan succinctly encapsulates your reason for writing the business plan in the first place. You'll need to convince the reader of what you want to do and why early on, and then prompt them to read on. If they're not compelled to keep reading, your novel business idea won't even matter.
How do you do that? You write a worthy executive summary.
An executive summary is "a nontechnical summary statement at the beginning of a business plan that's designed to encapsulate your reason for writing the plan," according to Entrepreneur.com. It's the first (and, really, most important) section of your business plan that essentially summarizes the longer proposal to hook the reader — the investor, lender, executive, manager or CEO whose time (and money) you're asking to take. If you hand them a super long document and ask them to read it, they'll first want to know why — and that's what your executive summary will explain.
Because the executive summary is summing up the entire report, it's common to write the summary last. This way, you should know exactly what belongs in it. Here's a general guideline of what the executive summary should answer in brief:
Of course, the information you need to include in your executive summary somewhat varies depending on whether your business plan is proposing a startup or making recommendations for an established business. That's because the main goals for startup business plans is, typically, to convince banks, angel investors or venture capitalist to invest by providing startup capital in the form of debt or equity financing. That means that you'll need a solid case for your business idea. For a startup, specifically, you should be sure to answer these questions in your executive summary:
For already established businesses, however, the executive summary should include some different information (think: achievements and growth plans). A typical executive summary outline for an established business should answer these questions:
Of course, not all business plans are looking for funding. You may be looking for a $10,000 loan to remodel or a $30,000 loan to launch or expand a product. Or you may just be looking for a partner to whom to sell a percentage of your business. Make sure that your executive summary clearly delineates your wants and how you plan to achieve them, as well as what's in it for the reader depending on what you're asking of them.
Writing an executive summary can be tough since there's a lot of pressure on you to nail it. It must make an immediate impact by clearly explaining the nature of the business, which means that it must be written well. Here's what you should know about writing an executive summary.
An executive summary should be short and businesslike, generally between half a page and one page. The length, of course, depends on the plan and its nuances, but the summary shouldn't surpass one page (two at the absolute most). In that page, you should be able to cover the aforementioned key elements without boring the reader. You can leave any lengthy analyses, charts and reviews for the report itself — this is your elevator pitch, so you should be able to deliver it quickly.
If you can't explain the essence of your plan in a page, you probably haven't thought through it well enough yet. You can use smaller fonts and wider margins to give yourself some room but, ultimately, it's called a "summary" for a reason."
Like a good novel or news article, the executive summary should be strong and attention-grabbing. You'll want to hook the reader, but you don't want to confuse the reader with some story trying to create excitement (as one might do when writing a book or a newspaper or magazine story). This approach may work for some business plan readers, but it's risky and clarity here takes priority.
Essentially, your executive summary needs an executive summary — you need to write a compelling first few sentences in order for the reader to want to continue through the page and, later, through the many pages of your plan. If you have a compelling aha! moment or if you've identified a void in the marketplace, you might want to open with that and then go into why your plan is worthy of consideration.
If you're having trouble getting started, you may want to ask yourself these questions when putting together your executive summary:
To make the structure of your executive summary as relevant and convenient as possible for the reader, you may want to consider writing it out in the same order as your business plan. Generally, that will look like this:
The "why now" section is easily your most important section because it means that your business plan is timely, and it'll light a fire under investors and lenders who show a pang of interest.
The truth is, however, that there is no set structure for an executive summary, but there are some general guidelines to follow:
The tone depends on your readers, which requires ample research. You want to be sure that the language of your executive summary matches your audience and caters to their backgrounds. For example, if your reader is an investor with a degree in political science, the language you choose to use may be different than if you were writing for a reader who has a doctorate in philosophy.
In other words, use language that will resonate with your target audience. To do that, research the following five questions about them:
There are, of course, some key tips with regards to tone regardless of who your reader is. Those tips include:
Consistency and confidence will go a long way.
There are good and bad executive summaries and, now that you know some general rules of thumb to writing one, you can probably pinpoint both kinds.
Here is an example of a bad executive summary from UniLearning.com:
Now here is an example of a good executive summary from UniLearning.com:
Notice what the summary do differently. The second executive summary is detailed but not boring, confident and relevant, and it merely asks for the reader's time instead of their money right off the bat. From the bad example, you can take away these common mistakes that writers of executive summaries too often make:
Now that you know what should go into an executive summary, how to write one and what an example executive summary looks like, you're ready to move onto writing your business plan — because, remember, writing your executive summary should probably be the last thing that you do. You can't summarize a business plan you haven't yet written.
Here, we explain in more detail how to write a business plan.
AnnaMarie Houlis is a multimedia journalist and an adventure aficionado with a keen cultural curiosity and an affinity for solo travel. She's an editor by day and a travel blogger at HerReport.org by night.