“What is conceived well is expressed clearly,and the word to say it will arrive with ease.”– Nicolas Boileau
Executive Summary
This is a section that must be included in your plan. It is the first and most read section of any business plan and needs to be given great emphasis.
Your executive summary is a summary of your business that answers all the key questions (why, who, what, when, where, how). Though it is the first section of the plan, write it last. If you try to write your executive summary first, it will likely be the hardest thing you ever write. If you write it at the end, after you’ve thoroughly thought through your unique products and systems, built your team of mentors and advisors, researched your market and competition, planned your financial needs and potential earnings and analyzed your business’ strengths and weaknesses, it will come much more easily.
What information does an executive summary include? The basics. Include the name and type of business (including its legal structure) and required investment or loan information (the amount and purpose of money you are requesting and your repayment plan – principal and interest). If the plan will be going to a lender or potential investor, be as specific as you can about the money aspects of your plan, including how you will use the money.
Even a business plan has room for dreams. Don’t be afraid to include a sentence or two about why you want to (or why you wanted to) start your business. After all, “why?” is one of your key questions. This is often best answered with your mission statement and a brief description of the motivation behind your mission.
Remember to keep your executive summary short, for it is sure to be read…
Maria and Paul
Maria had an excellent idea for a new business opportunity. She and a group of colleagues had advanced engineering degrees and were involved in nanotechnology research and development. Nanotechonology is the art of manipulating materials on an atomic or molecular scale to build microscopic devices. It is considered “the next big thing” by many venture capitalists. Nearly $10 billion a year was being invested into nanotech due to its promise.
Marie’s group, now incorporated under the name NanoNow, Inc., had developed a patented technique whereby nanoparticles were added to an automobile’s gas tank. Their unique fuel additive worked as an oxidation catalyst to help the fuel burn cleaner. Their company name NanoNow, stood for Nanotech New Oxidation Winner. Of course, everyone wanted cleaner burning fuel for less polluted air and for the better of the environment. But even more beneficial for Maria and her colleagues was that venture investors were currently quite interested in nanotech. Just like biotech and the internet in previous years, simply by mentioning nanotech doors were opening.
Maria was in charge of writing the business plan. NanoNow was seeking to raise $50 million in a first round of funding to begin commercializing their patented technology. The plan discussed the market, their competitors and their unique patented position in the industry. It was a 300 page well supported and convincing scientific argument for investing in NanoNow.
Paul was a business consultant who helped entrepreneurs shape their business plans. While he liked all the work Marie had put in on such a detailed business plan, he also knew that not only is brevity the soul of wit, it also defines the soul of many venture capitalists. They want the brevity of a hot business area times dollars invested to equal huge quick gains. Demonstrating that magic, vault-opening equation in 30 or even 300 pages was one task. But condensing the equation into a one page Executive Summary was an art.
Paul knew that the venture investors didn’t have time for a long and detailed narrative. Their assistants could wade through all that. Instead, they wanted one persuasive page, which after reading, they could snap their fingers and bark, “Check it out.’
This is why Paul was so focused on getting Maria and her group to write an effective Executive Summary. One page meant the difference between $50 million or continued polluted air. It was an important page. But Maria and company were engineers. They weren’t used to brief persuasion. Everything had to be proven and re-proven. Maria said she couldn’t possibly summarize and persuade in one page.
Paul had seen it before. Many of his clients could write a brief and winning Executive Summary in their sleep. But for engineers and other technical types it was nearly an impossible task. They just weren’t trained to write that way. As a result, Paul had a previously utilized solution to the problem. He hired a copywriter to write the Executive Summary. The copywriter was used to writing short, persuasive copy. He knew which buttons to push and where in the copy to push them. He was the expert they needed.
As it turned out, with a persuasive one pager for the venture guys and voluminous material for the underlings to check out, NanoNow was funded. Maria and her colleagues went on to great technical and financial heights without ever fully appreciating how influential the art of an Executive Summary was to their success.
Again, it is important to remember that an Executive Summary should do what it says: Summarize the business plan. It should be very short (one page is ideal), and should highlight the most important sections of the plan. Beware, it may be the hardest thing you write during the planning process. Condensing 30 to 40 pages (or in Maria’s case many more) down to their very essence takes an intense understanding of the subject matter and considerable writing skill. It is best left until you have written all other parts of the plan and have come to a thorough understanding of all the subjects. Your plan should be well conceived before you start writing the summary.
If you are using your business plan to attract funding, you might think of the plan as a resume for your business. Your business plan sets out all the reasons why someone would want to give you money. And just as an employer has to look at dozens, sometimes hundreds of resumes in a short period of time in order to narrow down the prospects to that hopeful few who will be called back for an interview, so do potential investors need to sift through piles and piles of business plans in order to find that hopeful few who will get a closer reading and even an interview. The timeline for potential investors is similarly short. Some investment decision-makers must go through as many as one hundred plans a week. Obviously they can’t do that without getting good at quickly separating the wheat from the chaff. You need to be able to summarize all the essentials in a way that will entice readers and back up that enticement with confidence. This, in a nutshell, is the job of your executive summary.
One way to compose the executive summary is to summarize each section of the plan in no more than a paragraph per section. If you find you can’t do that, your plan (or particular sections) may not be sufficiently focused or you may not thoroughly understand the components you have put into the plan.
Try to make your executive summary a concise selling tool. Leave out sections that do not show the company in its best light – such as the weakness portion of the Strengths and Weaknesses subsection. Your executive summary may be one section or you might want to break it down into briefer subsections. If tables or bullet lists will save you space without losing clarity, consider using them.
Timelines
Writing a business plan can take as little or as much time as you let it. There is no right amount of time other than exactly how long it takes you to get it done. Try to work with advisors and mentors to set goals for each section. Have them hold you accountable to get them done as an added incentive to stay on track. The reality, however, is that if you have to be held accountable by others to get the sections done you should ask if you have true entrepreneurial spirit.
If you need someone to push you along to write a plan, ask yourself who will be there to push you along when you’re in the midst of a crisis. Listen closely to your inner voice while you write your plan. Indicators like how well
