What is an executive summary & why you need it?

What is an executive summation?

An executive summary is an introduction and an overview of the business strategy. It should outline your company and the problem it addresses, the target market, and the financial highlights.

A well-written executive summary will grab readers' attention and inform them about what you're doing and why they should be reading the other parts of the business proposal or plan. It's not uncommon when investors take their initial decision solely based on an executive summary. Therefore, it's crucial to write it right. We'll help you create an executive summary that will set your business plan apart from others.

Do you need an executive summary?

Are you making a business plan to present to bankers or investors? You need an executive summary. A lot of people read just the outline, regardless of the content. Some will first read the overview before deciding whether or not they will read the remainder of the plan. Executive summaries are crucial when plans are created for people who are not inside the program.

If you're writing your business plan only for internal use, creating the executive overview is unnecessary. However, some internal plans, such as an annual plan for operations or a strategic plan, can utilize a summary to present the essential information and provide an easy-to-read version of the program in its entirety.

It's not easy to create an excellent summary, so if you don't have any business purpose for presenting the outline, don't bother.

How long should an executive summary be?

The rule of thumb suggests that the executive summary must be as brief as is possible. Your target audience is limited in time and attention span, and they'll want to learn the specifics about your business plan as fast as they can.

Make sure to keep your executive summary to less than two pages. If you can, however, it is possible to make it more if needed.

1. An explanation of the service or product and the issue your business is solving

Please give a short description of the service or product you provide and why it's essential. Your company doesn't have to address a more significant social issue, but it should be addressing an issue for customers or an opportunity on the market.

2. A description of your intended market

Your market of choice is who you believe your potential customers will be. Sometimes, the product's name is the key to determining the market, like "Peoria's Best Thai food" or "Mini Cooper Dashboard Accessory." If not, an outline of the leading market you want to target or those you believe will buy on your product is sufficient.

3. Competition

If your company competes (every business has competition! ), briefly explain how your business can stand out. Do you compete concerning price, quality, or other factors? Would you please describe in detail the things that distinguish your business from others here?

4. Financial Overview

If you're a current company, it could be as easy as highlighting your annual sales and the growth in the past year. If you're a new company, this could be an overview of your goals, including the sales forecast goals for the coming year and three years the present. I usually suggest a basic highlights chart or a bar chart showing gross margin and sales for the coming three years.

5. Your Team

It is essential, especially for companies that are just starting. Investors are interested in knowing who is driving the business concept and why you, your staff, and you're the ideal individuals to develop the company. It could also be beneficial to identify any weaknesses within your team and the ways you will fill these gaps. If you've got prospective partners or candidates you are thinking of, you should mention them briefly and provide more details about their experience in your business plan.

6. Need for Funding

If you're using your business plan to raise funds to fund your business, the executive summary of your project should describe the amount you're looking for. Investors want to know this information in advance and not have to sift through your business plan to locate this particular detail.

Other areas your executive summary might require to be covering

Early evidence of success

If you're a new business and developing a business plan to raise funds shortly, it is essential to add evidence to show "traction" in your executive summary. It could be a result of consumer surveys, pre-order figures for your product or service, or early sales figures when you released a soft opening or a limited-time release. It doesn't have to be a lot. However, any initial achievement is proof that your business's model and your product/service and market research are based on solid evidence.

Future Milestones

It is also possible to discuss the future milestones your company is hoping to achieve. It is essential for companies operating in a complicated or saturated business, as manufacturers of medical devices and pharmaceutical companies. They should clearly state where they are in the process of receiving regulatory approval and the following steps to take.

The evidence of financial stability

If you're looking for an advance from a bank, they will be looking for proof of your financial stability, such as the number of your assets, net worth, and economic background. Learn more about making an executive statement for each one of these situations.