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Master the executive summary of a business plan: the why and the how
Even though executive summaries are written when the rest of a business plan is finished, it is still included in the beginning of the plan. Because of that, the summary is what people are going to base their first impressions on, and it is how they will decide if they want to read the entirety of the document.
The importance of an executive summary cannot be understated, both to grab the attention of a reader and to provide a short overview of a business plan in another proposal or report.
What is an executive summary in a business plan?
An executive summary is a concise overview of a business plan. It is intended to provide the necessary information to the reader so they can understand the whole picture without having to commit to a long read.
That is why the summary is typically used by decision-makers in the following scenarios:
- Strategic decisions
- Project approvals
- Resource allocation
- Investment decisions
It is very easy to see how important a well-crafted summary can be. It will help the writer explain their ideas in a clear way, as well as inform and influence decisions.
How to write an executive summary of a business plan in 6 simple steps
Having a clear structure to your summary is necessary to ensure its readability, clarity, and conciseness. It will also help you stay on track and not get lost in minute details of what you are presenting. So, start with putting down a plan for your summary first, and only then get to the actual writing.
It is very important to note here, that the structure of your summary should mirror the structure of your business plan. After all, a summary is designed to emphasize the most important points of the already present information, and not make new ones. At the same time, you want to avoid repeating yourself word-for-word because that will make reading the full text feel redundant and may turn readers away from it.
Summarizing information well is difficult without prior experience and that is why using ReadPartner to do this work for you may help you save a lot of time every day. ReadPartner is an AI model that specializes in parsing and summarizing information across different types of content. ReadPartner allows you to configure the type, the length, and the format of the summary you want to receive so you can cater to the needs and goals of your target audience for maximum effect.
Let us take a look at a typical structure of an executive summary. If your business plan needs differ from our advice, do not be afraid to tweak these steps to your liking a little bit.
1. Business overview and mission statement
In this section of your summary, you should include basic information about the business, such as name, location, industry, and mission statement. This will allow you to set the stage for the reader and introduce them to the core purpose and the identity of the business presented.
2. Market opportunity and resources
This is where you show that there is demand for the goods or services you intend to provide and that there is opportunity for growth. Make sure to describe in short the target market, its size, trends, its demand, and what resources you have to meet that.Here you need to start incorporating data. Include main relevant statistics and key data points to support your claims, but avoid diving into too much detail in your executive summary.
3. Goods and services
Make a concise description of the goods or services your business offers. The best thing to focus on here is not describing the product in great detail, but instead explaining how it solves a problem or meets a demand of the market. This will leave your readers with a strong sense that your product is going to be desirable, and will help them understand the core value proposition.
4. Competitive advantage
This part of your summary should be dedicated to outlining your competitive advantage. Summarize what it is that sets your business apart: it could be unique features, superior quality, or better pricing. In the modern competitive landscape of business, this part is crucial to show that your business can succeed. Even if you are starting out in a low-competitive environment, it doesn’t mean that it will stay that way forever so describing the strong suits of your business is an important step.
Generally, you want to refrain from saying that your product is simply strong overall here. Instead, it is much better to mention specific things that set your product or business apart, which could be things like proprietary technology, exclusive resources, unique product design, and so on.
This is true, of course, unless the market situation is that the competitors’ products can only do one thing very well, but others not so much. In this case, being able to create a product that is solid at a number of different things can be its own competitive advantage.
5. Finances
This section is needed to demonstrate the financial viability of your business, as well as its growth potential. Show key financial metrics here such as revenue projections, profitability, or funding requirements. Do not however forget to present this information in a simplified format and not delve into too much detail in your summary.
6. Conclusion
The best thing to conclude your summary with is a call to action, especially if your goal is to attract investors or raise funds. Try coming up with a direct and persuasive statement to encourage the reader to take the next step like reading the entire business plan, investing, or establishing partnership.
Business plan executive summary example
Let us take a look at an executive summary example provided by Texas A&M University[1]. We will split the summary into its parts so that the structure is more apparent, and take a look at how this example implements the steps mentioned. We will also discuss what can be done differently, so you understand your options better.
1. Business overview and mission statement
- The overview with goods and services included
TTAP Enterprises is owned and operated by Thomas, Jr. and Julie Rancher. The operation is located in north central Texas and is primarily a wheat and cattle operation. The base for the operation is the 400 cow herd from which stocker cattle are raised. Additional outside cattle are purchased in order to generate enough stocker cattle to graze the operation’s 1,000 acres of wheat. Each year approximately half of the wheat is grazed out and half is harvested for grain. An additional 200 acres are double cropped each year with sorghum to assist cash flow and aid in weed control.
In 1994, Thomas C. Rancher, Jr. purchased 6,000 acres from his father. Mr. Rancher, Sr. continues to own an additional 5,000 acres which are leased to Thomas, Jr.
The author chose to include the goods they produce in the overview part of their executive summary. This is something you can absolutely do if it is appropriate and it mirrors the business plan itself. Remember that business plans and executive summaries can be flexible, and you do not have to follow the proposed structure to the letter. If you have good reason to do something differently, there is nothing wrong with changing things around a little.However, generally, it is recommended to dedicate a separate section to describe your product. This will allow the reader to quickly identify what the business is offering without having to search for it inside the overview section.
- The mission statement
TTAP Enterprises mission statement is:
To operate a diversified crop and cattle operation that will provide:
1. Financial success through the production and marketing of high-quality products. An important element to achieving this is effective cost control.
2. A working environment that fosters mutual respect among all parties involved with the operation.
3. A rural family living environment with opportunities for recreation and personal growth for all involved. It is our desire to practice good stewardship of natural resources of this operation.
The mission statement clearly describes the purpose and the values of the business. It does a great job at emphasizing financial success, a positive work environment, and sustainability of the operation.
2. Market opportunity and resources
TTAP Enterprises has adequate resources to perform and sustain its operation. Most machinery and equipment is in good to fair condition. No new equipment purchases are foreseen in the near future. Human capital is adequate as long as Catchum Maverick is employed.
This section provides a critical overview of the business resources. It points out the strengths and acknowledges the weakness of human capital. This may feel somewhat uncomfortable to write about, but it can help set an honest and impartial tone for the summary, increasing your credibility.
3. Competitive advantage
The operation draws upon its internal strengths. These include young, knowledgeable and aggressive owners, natural resources of the land, and dependable employees. Many weaknesses have been pointed out. Some of these include the operation’s dependency upon cattle and cattle prices, Julie’s bookkeeping skills, marketing, and the lack of an estate plan for the remaining acreage held by Mr. Rancher, Sr.
This paragraph identifies the advantages of the business well, and it keeps the critical tone established in the previous section, mentioning weaknesses in terms of competitiveness as well.
However, if your summary is aimed at attracting the attention of potential investors, we would recommend providing more detail about the strengths. For example, how do knowledgeable owners affect the business’s performance? Does it lead to increased cost savings during production or does it help increase yields? Giving more information about the effect of strengths on the business itself will allow the readers to understand the competitive advantage clearly, and make it more compelling.
4. Finances
TTAP Enterprises currently has three long term goals. First, TTAP Enterprises will build its net worth to over $2.0 million by January 1, 2015. Given current financial projections, this goal should be attainable. Second, TTAP Enterprises will increase the carrying capacity of the ranch from 481 animal units to 520 animal units by January 1, 2005. This goal should be attainable if the rainfall is near normal and the operation continues to address brush management. Finally, the Ranchers will have a new four bedroom house built by January 1, 2015. This coincides with their personal family plans of having children.
This section defines the financial goals, and includes clear financial projections. A possible addition here would be covering the strategy to achieve these financial goals briefly. This will paint a clearer picture for the reader and make these projections more reliable for an outside viewer.
5. Conclusion
No production changes are being planned for the near future. The operation will continue to depend upon its cattle herd, wheat, and stocker cattle to provide income. Likewise, current financial projections indicate that TTAP Enterprises is moving towards its long term goals. Financial weakness is anticipated as the cattle cycle continues; however, the operation should remain solvent during its planning horizon.
The conclusion reassures the reader that the business is stable and is progressing toward its goals at a steady pace. It continues to keep its impartial and critical tone, providing a balanced overview of the business.
There is no direct call to action, but if the summary you are writing is aimed at fundraising or attracting investment, you should definitely include it.
Writing tips
As with any written work, it is crucial to keep the goal of your summary in mind. The business plan executive summary sample we have looked at is most likely not aimed at attracting outside investment, but rather to provide an honest overview of both strengths and weaknesses of the business as part of internal planning or financial assessment.
Who you are writing for affects what you should focus on more. If it is an internal document you may omit certain details that are clear or obvious to your management team, but it would be a big mistake to do this if you are presenting to people who are not part of your business and are not familiar with its inner workings.
Always keep in mind who is going to read the summary and why they are going to read it. This will allow you to cater to the needs of your readers and help your summary to do its job better, whether it is attracting attention to encourage reading the full document, sparking interest in potential investors, or providing a critical overview to help the owners assess the current situation.
FAQ
Where in a business plan should the executive summary go?
It goes at the top. Even though you write the executive summary as a last step, it is put first in business plans because it provides a short and clear overview of the plan, helping people decide if they want to read the entire document, or helping decision-makers understand the situation quickly.
How long should an executive summary be?
1–2 pages long. This limit is not set in stone, but writing shorter you risk not providing enough information for the reader, and writing longer most likely means there is too much detail that can be excluded without affecting the effectiveness of your summary.
Who is the target audience for an executive summary?
It could be partners, stakeholders, executives, investors, or lenders. The target audience affects the purpose of the document you are writing, and you should absolutely adjust your summary based on who is going to read it and why.
References
- The example provided in the “Business plan executive summary example” section of the article:
https://agecoext.tamu.edu/wp-content/uploads/2016/10/A.-Executive-Summary.pdf
